Social safety nets are essential to fight poverty and help the poor deal with crises or shocks stemming from natural disasters caused by climate change, pandemics, or even wars like the one in Ukraine. According to the World Bank, “while poverty rates have fallen in Africa, the number of people living in poverty continues to increase.” As people living in poverty increase in Africa, the need for social safety nets becomes more important. Social safety nets provide support and protection for individuals and families. As such, improving social safety net programs so that they are effective in reaching more people and getting targeted benefits to the right people is imperative.
Safety net may take the form of cash, pensions, child allowances, or transfers in kind, such as food subsidies and feeding programs: or they may provide income support to the vulnerable by providing jobs in an emergency or through a public work program. The various transfer programs are designed to play a redistributive and risk reduction role in poverty reduction. Still, there is a gap between the current program and the impact it could have if governments improve the programs.
Although social programs have increased in Africa, most of the poor are still not covered by social safety nets. Lack of access to social programs is because poverty rates are higher than coverage rates in most countries. Sub-Saharan Africa accounts for two-thirds of the global extremely poor population. Many people lack adequate water and sanitation, and many children are in poor health and lack quality education opportunities. African citizens need more social assistance programs and strengthening of mediums where this assistance can reach those in need.
In low-income countries, safety net benefits as a share of the poor’s income and consumption are at only 13 percent, according to the World Bank. Sub-Saharan African countries spend an average of 16USD per citizen annually. In contrast, countries in Latin America and the Caribbean region spend an average of 158USD per citizen annually. Lesotho and South Sudan are the biggest spenders on social safety nets, with Lesotho spending 7 percent of her GDP and South Sudan 10 percent. Cameroon, Republic of Congo, Ivory Coast, Guinea-Bissau, Madagascar, Sao Tome, and Principe, Somalia, and Togo spend 0.2 percent of their GDP on safety nets.
Across sub-Saharan Africa, systems need to be strengthened to improve the effectiveness of safety net programs.
Nigeria – In Nigeria, the country still faces issues of youth unemployment, high poverty, and low economic growth. Recent governments have demonstrated concern about the high level of poverty in the country by creating various poverty alleviation programs like Operation feed the nation, the Better Life Program, the Family Support Program, and the Peoples Bank Project. Not many Nigerians have benefitted from these programs. The north enjoys the safety net programs more than other parts because low-income families live predominantly there.
An International Monetary Fund (IMF) report notes that Nigeria needs to improve the coverage and efficiency of its social assistance programs. As of 2018, around a fifth of the vulnerable population (the bottom 60 percent of the population) receives some social assistance with a small fraction obtaining cash transfers”.
During the Covid 19 pandemic, the World Bank extended support to Nigerians through the Covid-19 Action Recovery and Economic Stimulus program (CARES). The purpose of the program was to give grants to poor and vulnerable households and small businesses. The funding targeted 2,527,385 beneficiaries, and as of March 24, 2021, only 950,000 people had benefited. This reinforces the fact that social assistance programs need adequate implementation and scrutiny to be effective.
Lesotho – In the World Bank’s review of Lesotho’s safety net programs, it was seen that there wasn’t inclusive growth to tackle poverty in the country, as people who did not need social safety benefits were receiving them. People who were not among the extremely poor received most transfers. The report noted that there is more room for increasing the efficiency and effectiveness of spending on safety net programs. Lesotho can move towards more consolidated safety nets and strengthen her existing, essential, and positive outcome programs.
Cameroon – The World Bank report notes that Cameroon does not have a coordinated system of safety nets but rather has small, isolated interventions which altogether do not address the needs of her vulnerable citizens. The food and fuel price subsidies mainly benefit the rich leaving the chronic poverty and food insecurity situations unattended.
Cameroon’s health sector is among the most underfunded and expensive to its citizens, making most families not seek health care in the country. When the Covid 19 pandemic hit, there was an international urgency to increase funding and support those who lost their earnings. The health minister announced a 58 billion XAF, approximately 105 million US dollars, and the IMF approved a loan of 156 million dollars to the nation to support the country’s health system and help businesses and households affected by the pandemic.
The Cameroon government pledged transparency of funds, but from the start of the pandemic, the government provided no public information regarding the spending of the funds. A while after, bowing to public pressure, the health minister published a circular citing the companies awarded grants from the loans. There were no links to the document to ascertain whether these companies were confirmed.
Mozambique – The government’s resource on social protection goes to untargeted subsidies and pensions that benefit only a few, according to a World Bank report. The social protection system is developing programs that address identified risks, but significant gaps remain. Low-income families with children are not adequately supported, there is no considerable youth program, and subsistence farmers are not properly protected against recurrent shocks.
What can be done?
Build Strong Institutions – Strong institutions are vital to the delivery of safety net programs. Strong institutions ensure orderly processes and ensure programs have continuity. There is a need for institutional capacity and tools to facilitate the selection of beneficiaries, service delivery, and monitoring of both processes and outcomes to implement a social safety system effectively. Strengthening current institutions by fighting corruption and removing unnecessary bureaucracies will ensure that benefits are reaching those who need them.
African countries have one or more ongoing safety net programs that need better-coordinated systems to increase efficiency and guarantee that benefits reach those they are intended for. A coherent and comprehensive safety net system should start with the development of strong institutions, a well-designed plan, and a policy framework to guide multiple social protection interventions for now and in the future.
Expand Funding – Funding is a serious challenge for safety net programs in Africa. On average, African governments spend about 1.3% of gross domestic product (GDP) on social safety nets. This level of spending is very low to tackle the high poverty rates in Africa. During the COVID-19 pandemic, close to $55 billion was committed to helping fight the health and socioeconomic crises. South Africa accounted for 70% of the total announced funding, leaving the rest of sub-Saharan Africa with about $16.6 billion.
The World Bank recommends strengthening fiscal systems to finance safety nets. Reforming the tax system can increase tax compliance. Once tax compliance is increased, the additional revenue can also go towards social programs.
In addition, external funding would help African governments increase the reach of safety net programs, so reaching out for development partners’ financing can also expand funding. Development assistance through bilateral and multilateral organizations represents more than half the social safety net financing in the majority of African countries.
Go Digital – Digitalizing social programs can enable more households and adults to be reached directly. Governments’ social programs can reduce delays and leakage by channeling transfers directly to their beneficiaries’ mobile phones. Millions of people in developing countries received payments during the pandemic, helping cushion the impact of COVID-19 on livelihoods. Reports note that most African countries send relief/social safety net interventions through cash transfers. Digitalizing safety net programs can help improve efficiency and help governments reach more vulnerable citizens.
Moreover, governments should establish a digital-identification system to include more adults. According to David Malpass, president of the World Bank, “establishing digital-identification systems is essential because lack of verifiable identity is one of the main reasons why some adults remain excluded from financial services.”
Furthermore, the African government can use other channels to support vulnerable citizens, like giving in-kind transfers in the form of commodity goods. The provision of commodity goods can help to some extent to ensure everyone benefits from social programs. While cash transfers cannot be disregarded as it has positive impacts, to increase their reach, governments can implement multiple transfer tools and learn the one that works well for their citizens.
Conclusion
African governments must take steps to ensure that social safety nets are effective and are able to reach the right people at the right time. Sub-Saharan Africa has the most need for safety net programs because of its poverty rate. Research shows that social safety nets improve equity and increase household consumption. Since safety net programs aim to enhance the well-being of the most vulnerable, improving African social programs can significantly impact the poor and help fight poverty, especially for women and girls who bear the brunt of the effects of poverty.
By building strong institutions, going digital, and expanding funding, African governments can increase the impact of their social programs and reach more vulnerable households. Additionally, governments must focus on strengthening families and supporting small businesses to face shocks with better resilience. Support can be given by increasing employment opportunities, increasing access to finance and markets, implementing the African Continental Free Trade Agreement (AfCFTA), increasing the girl child’s inclusion in education, and supporting youth skills development.
