Study roots for social security coverage for informal sector workers

Dar es Salaam. Researchers have suggested updating laws and regulations to create friendly systems that would allow employees in the informal sector to receive social protection benefits, such as health insurance, pensions and loans from financial institutions.

They have emphasised that the current framework, which includes laws and rules, is oriented toward the formal sector, making it difficult for groups like small business owners, petty traders, bodaboda riders, daladala drivers and construction technicians to operate. This was said yesterday by researchers from Mzumbe University while showcasing their five-year (2017-2021) research findings dubbed; Informality and Social Protection Project, highlighting the participation situation of the informal sector in social security funds.

Their research, among other things, identified three main issues that currently prevent people in the informal sector, such as food vendors, bodaboda, daladala (commuter bus drivers) and hawkers from contributing to security funds as a lack of adequate education about security funds, fraud and a lack of enabling systems.

A researcher and lecturer from Mzumbe University, Mr Aloyce Gervas said entrepreneurs and those in the informal sector have not benefited enough from these services and their challenges were still at an alarming stage. “We are requesting that the authorities and those in charge look into creating user-friendly systems since the current ones prevent them from receiving timely service, such as health insurance, a pension, or a loan when they visit the bank,” he said.

He said that the policy makers and lawmakers should work to revitalise the laws and policies since most of them were centred on the formal sector, and that the enabling organisations should be able to create straightforward and approachable ways to be able to reach them.

“These people do not have a special procedure, starting with how to reach them. So it is the most basic thing if we revive our policies and make them speak the language of this group. This may make it easier to reach out to all as well as the goal we are looking forward to as a country,” he noted.

The research’s coordinator, Dr Godbertha Kinyondo, from Mzumbe University said they started the study in 2017 and it was completed in 2021 where they interviewed 1,485 service providers in the informal sector in Dar es Salaam and Dodoma regions and the results reflects the situation in the whole country. “What we have observed is that 90 percent of construction employees lack health insurance, 100 percent lack pension funds, and if we look at small business owners, more than 80 percent lack health insurance,” she said.

Mr Nickas Msemwa, the city business officer for Dar es Salaam, believes that the research is a catalyst to help policy makers because he believes that they would use it as a decision-making tool, especially in financial institutions.

“This will enable all systems to see what adjustments should be made, Mzumbe has given us great power to speak and act (with evidence) because this group has been left out for a long time,” he noted.

For their part, daladala and bodaboda drivers discussed how they felt about the initiative they were a part of via education and methods they may utilise their revenue to pay into their social security. Social Security, in their eyes, was reserved for government workers. “We didn’t believe the social security funds were for us, we had been considering ourselves to be mere strugglers.

However, this effort has inspired us, and we are now striving to inform other coworkers so that we may join these social protection funds,” noted Mr Said Msisili, the assistant information officer of the federation of associations of bodaboda and Bajaj riders in Dar es Salaam.

Furthermore, Mr. Said Mapande, chairman of the association of lorry and bus drivers, claimed that although being over 45 years old, he has never received instruction on how to enrol in social security funds.

“I find it surprising that I’m ageing and have no idea that I also deserve social security,” he said.

“Now if I don’t go out to drive, my family can’t eat yet I’m getting old. If I had known earlier it would have helped me...,” he explained sadly.