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Thursday, May 23, 2024

Informal sector pension scheme to benefit 80% of workforce

Story by Kenias Chivuzhe

GOVERNMENT forging ahead with its thrust on inclusive development with the establishment of the informal sector pension scheme expected to increase the country’s pensionable workforce and expand social security coverage.

The drive to establish an informal sector pension scheme is gathering momentum after the ZIMSTAT 2022 Third Labour Force Presentation indicated that about 1.4 million Zimbabweans are covered under social security schemes against an estimated total labour force of 3.9 million workers.

The news of an informal sector scheme has excited intended beneficiaries who believe the social security initiative is long overdue.

“We support the idea of an informal sector scheme to cushion us when we retire or get old. Those in the formal sector are covered but we are excluded from social security nets,” noted a beneficiary.

Another noted, “As when we get old we anticipate a number of challenges that include health hence the need to have a pension scheme. This will reduce the high burden being shouldered by the social welfare department.”

National Social Security Authority (NSSA) Acting General Manager Dr. Charles Shava revealed that the establishment of the informal sector pension scheme is on course, with the move expected to increase national pension coverage by 80 percent.

“We have already engaged a consultant from ILO and have made their recommendations and now what we want to do is do a data survey to see how this scheme can be run,” he noted.

He added, “I think within the next 12 months we will be somewhere with the scheme. We estimate that 80 percent of our population is in the informal sector, so if we capture the informal sector we would have captured 80 percent of our workforce.

“We are currently covering about 1.4 million and I think about another 1.8 million or so are not accounted for. If only 1.4 is captured it means that bulk is not captured and the role of the informal sector scheme cannot be over-emphasised,” he revealed.

Members of the academia and SME representative bodies spoke on the need to ensure the scheme is attractive to the intended beneficiaries.

A lecturer Willard Madhombiro noted, “Our economy is informal sector driven with the majority of the workers not covered by NSSA. Our worry is on their exclusion from social security safety nets.”

Meanwhile, Zimbabwe National Chamber of SMEs Manicaland province chairperson Moses Mwagura added, “As SMEs we see the establishment of an informal sector scheme as very important to us. This will ensure we have a tailor-made scheme that suits our conditions and needs.”

“The SMEs contribute a lot to national GDP hence the need to support that. There is a need to pay more attention to their needs in order to attract more SMEs. The attractiveness of the scheme will ensure more people join the scheme,” he added.

Social security coverage is one of the strategies adopted by the government to alleviate poverty and vulnerability in line with the inclusive development approach.

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