Sunday, December 5, 2021

Social safety net programmes continue to underline Gov’t expenditure

Despite sluggish economic recovery characterized by huge deficits, the government of Botswana spent P5.3 billion on social protection programmes in the fiscal year 2012/13 from its own resources according to a December 2013 Social Protection assessment study conducted by the Botswana Institute for Development Policy Analysis (BIDPA) in conjunction with the World Bank.

The P5.3 billion accounted for 4.4 percent of the country’s Gross Domestic Product (GDP).

In the period under review according to the study, social insurance spending accounted for 1.2 percent of GDP and consisted of contributory pensions for public sector employees.

To support employment, government further financed a number of active labour market programmes to the tune 0.17 percent of the GDP in the same fiscal period while social assistance spending represented another 1.7 percent of the country’s GDP. The social assistance spending was allocated to a mix of programmes that addressed the most vulnerable groups through programmes such as Ipelegeng, old age pension, cash and in-kind assistance for destitute (indigent) persons and families who take care of orphans, nutrition programmes for infants and pregnant and lactating women as well as school feeding for primary and secondary school children.
The spending extended to sponsorships and scholarships for students in tertiary education which accounted for 1.4 percent of the GDP in the year under review.

Although the spending is by all accounts reasonable, the study notes that the social protection system exhibited a number of suboptimal features.

“While Botswana has many social protection programmes, some of them are rather small relative to the target group they intend to reach or to the number of poor people, which limits their effectiveness. Contributory pensions cover less than 13 percent of the workforce, reflecting the structure of the economy and its small formal sector.

“Targeted programmes for the poor such as the Destitute Persons cover less than three percent of the population. Furthermore, safety net programmes are fragmented. They are implemented by different ministries, diluting scarce administrative capacity”, observes the study.

The study further notes that the current social assistance is skewed in favour of a single programme ÔÇô scholarships and sponsorship for tertiary students ÔÇô which absorbs 45 percent of all social assistance programmes thereby benefitting mostly the non-poor.

Although tertiary students are sponsored by way of repayable loans, the collection system is non-existent with beneficiaries never repaying due to insufficient collection systems rendering the assistance unsustainable in the long term.

Given the high and persistent levels of malnutrition, the effectiveness of the nutrition programme is doubtful. “The current system relies too heavily on in-kind distribution of food (e.g. school feeding programmes, vulnerable groups feeding programme) which requires that a large share of their budget is spent on administration and logistics”.

Additionally, the safety net covers only a small fraction of the absolutely poor because of its reliance on programmes targeted at individuals instead of families and lack of a last resort family-focused anti-poverty programme.

“These weaknesses, however, could be corrected over the next few years and by 2016 Botswana could emerge with a modern effective and efficient social protection system, capable of eliminating absolute poverty. Using the analytical framework of the recently adopted Social Protection Strategy of the World Bank, this report offers punctual suggestions on how to strengthen the social system in Botswana” notes the study.

The report recommends three strategic directions and associated policy measures that would strengthen the social protection system over the next three to seven years which include tightening the safety net for the elimination of absolute poverty in a budget neutral way.

The policy measures are focused on filling existing gaps in coverage, eliminating programme fragmentation and curtailing over-generous benefits.

The BIDPA/World Bank report further spells out a comprehensive but feasible administrative reforms agenda targeted to the administrative and systems that underpin an efficient and effective service delivery across all social protection programmes as well recommendations on strengthening institutional arrangements and coordination mechanisms.

The goal of uplifting 84 000 families from absolute poverty by 2016 is achievable through redirecting 0.4 to 0.6 percent of GDP towards families living in absolute poverty and implementing a targeting system.

“Tactically, this will require a better weaving of the safety net through the introduction of a last resort, poverty targeted programme, a reduction in the wage rate of public works programme (Ipelegeng) to improve both the targeting and coverage of the programme including cost cutting measures to ensure budget neutrality.

To reach all families living absolute poverty, the report recommends designing, piloting and rolling out a Family Support Grant (FSG) by 2016 to cover families in absolute poverty that are currently not reached by existing programmes.

The proposed FSG is such a programme targeted using a proxy-means test toward the poorest and offering a benefit of P85 per capita per month which is slightly more than the average consumption gap of the poor. This is equivalent to P340 per month for average family of four.

Another option would be a complementary FSG programme offering P85 per capita to families identified by the proxy-means as the 24 percent poorest, but only to family members who are not covered by other individual more generous programmes.

Family members that benefit from the Destitute Persons, Old Age Pension or Ipelegeng programmes would continue to get these benefits instead of the P85 offered for the FSG programme. The complementary FSG would cost an additional 0.35 percent of GDP.

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