Social Protection and Pro-poor Growth in Africa Investing in Social Protection in Africa Regional Expert Meeting on Social Protection Dakar, Senegal 9 – 11 June 2008 It’s a privilege to have the opportunity to participate in this workshop. I will discuss the relationships between social protection and economic growth, with a particular emphasis on evidence from South Africa. Before tackling the main question, it’s useful to speak briefly about the problem of poverty that social protection addresses, and how we think about it. Michael Samson msamson@epri.org.za

Overview African approaches to social protection Importance of social solidarity Particular relevance for food price crises Impacts on pro-poor growth Design and implementation matter

African approaches to social protection and pro-poor growth Poverty reduction and inclusive, pro-poor growth Cash transfers Legal protection Social insurance Social services Public works schemes Targeted inputs Subsidies SOCIAL PROTECTION

Use of transfer by type of spending and program Sources: Acacia Consultants 2007; Devereux 2002; Devereux et al. 2006a; Devereux et al. 2007; MCDSS/GTZ 2006; Moller and Ferreira 2003. 1 In the case of Zambia SCTS the figure represents the proportion of overall spending by beneficiaries on health. In the case of Malawi DECT, these spending numbers refer to 3 months of the 5-month program period: January-March 2007. SOURCE: IFPRI 4

Impacts of unconditional cash transfer programs on nutrition Sources: Agüero et al. 2007; Case 2001; Duflo 2003; MCDSS/GTZ 2006; Samson et al. 2004. OAP impact on boys only if pension received by woman (national) CSG impact only if received during 1st year of life and for at least 2/3 of 1st 3 years SOURCE: IFPRI 5

Impact of cash transfers Empowerment Upliftment Health, education Access to markets (nutrition)

Social protection for the life cycle Livelihoods Public Works School fee waivers & vouchers Early Childhood Development Maternal & Child Health & Nutrition Nutrition support Older people Adults High school Secondary Primary 0-5 Prenatal - Social Transfers -Insurance SOURCE: IFPRI

Human capital development promotes pro-poor growth Social protection Human capital Labour productivity Pro-poor growth

Human capital development promotes pro-poor growth South Africa Social protection Human capital Labour productivity Pro-poor growth Increase wages 60-130% more than the cost of transfers

Higher investment and growth Social protection promotes better risk management and encourages investment Higher investment and growth Risk Manage-ment Social protection

Social protection improves labour market participation and employment COMMENT FROM KF 4 there are a lot of slides on CSG - not sure how you're planning to present these, but wonder if it's a bit too detailed, and again could maybe go in a handout, and maybe referred to in the presentation. n=3462 n=1795

Social protection facilitates economic reforms that promote pro-poor growth IMF Working Paper, African Department Who Can Explain The Mauritian Miracle: Meade, Romer, Sachs or Rodrik? Prepared by Arvind Subramanian and Devesh Roy1, August 2001 “In return for guaranteeing the rights of the sugar owners, the political majority did implicitly extract a compromise in terms of transferring some of the rents from sugar to itself. One important aspect of this transfer was a large, relatively well paid, civil service (staffed predominantly by the majority Indian community) and a generous system of social protection,particularly related to pensions, The success of the sugar industry in Mauritius can thus be seen as an example of what can be termed as optimal rent sharing between the political (predominantly Indian) and economic elites (predominantly non-Indian).” MauritiusPensionExplainGrowthMiracleIMF.pdf, page 37 Mauritius

Design and implementation matter National social and policy context Targeting National and local capacity Systems Complementary programmes

Delivery systems Single Registry Admin Rights M&E Payments Another design issue is addressing fiduciary risk. Particularly in fragile states, but wherever there is fraud or corruption or inefficiency—and we’re covering a lot of ground here—there’s possibilities for improper allocation of funds. Good systems help address fiduciary risk, appropriate monitoring and evaluation contributes also. But there needs to be an explicit policy initiative. It’s virtually impossible to eliminate fraud—we’re looking at millions of transactions and information that’s difficult to verify. When the fraud hits the press, if the implementing agency—usually govt—can’t demonstrate a good faith effort to control fraud, the political costs may well exceed the direct costs of the fraud. As mentioned before, civil society can help prod slow progress, and provide an important advocacy role that supports oversight. M&E Rights

Conclusions An evolving model of social protection in Africa focuses on developmental social cash transfers An emerging evidence base documents powerful impacts, increasingly demonstrating support for pro-poor growth But these impacts are not automatic— they depend on effective design and implementation