Deaf Vendor in Harare CBD - Photo Credit UNDP
Harare – Makanaka Chirima, 44, has been living on the streets since the year 2000, but she is a seller now rather than a homeless child. Her story is one of a multi-tasking individual from airtime, fruits, drinks and any marketable wares. With the exception of the instant card she uses from Steward Bank, she has never held a bank account.
“I’ve never held a formal job in my life. I don’t have much left over after paying my rent and other costs, but occasionally we participate in savings clubs to make large purchases. Even if I live to be 70 years old, I will not be able to retire since I do not have a pension to live on,” Chirima stated.
Like Chirima, thousands of Zimbabweans struggle to make ends meet, and very few are able to save money for the future. They are unable to make monthly pension plan contributions if they are unemployed. According to the International Labour Organization (ILO), over 60% of workers worldwide are engaged in informal work, and the majority of them experience significant work gaps, such as a lack of social protection.
ILO refers to Informal economy as all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements. This includes touts, vendors such as Chirima, and a large number of independent contractors running backyard enterprises. ZIMSTAT (QLFS Q3 2023) reports that 88% of people in employment work in the informal sector.
“Since my business and personal lives are intertwined, I don’t have a set pay date. Therefore, whatever is required is taken care of appropriately. All I have to do is watch out for my floating money for the upcoming orders.”
Thus, both personal and professional lives are impacted when a person becomes ill or needs to attend to important family matters, according to Chirima.
The National Social Security Authority (NSSA) is working to create a pension safety net for the informal sector in light of the difficulties it faces. The project is currently underway. The authority is currently working on the framework and research while collaborating with other stakeholders to map the informal sector.
Social security is a benefit that economically engaged citizens are entitled to, and it helps to reduce the dangers that they may encounter during their lifetimes. NSSA, which was founded by the Zimbabwean government in 1989, is essential to the country’s ability to preserve workers’ and their dependents’ social security.
Speaking on the launch of the the NSSA/IPEC/Journalism Mentorship Programme for the 2024 season, NSSA Acting General Manager Dr. Charles Shava stated thatsocial security is a basic human right intended to lessen extreme poverty and income loss resulting from illness, injury, old age, or death, among other life’s eventualities,
“As a result, NSSA was established to offer a safety net for employed Zimbabweans and their dependents in case any such threats occurs,” Shava clarified, “NSSA benefits are there to complement occupational pension funds, which is why we saw it appropriate to collaborate with IPEC on this program. However, during one’s working lifetime, an individual is expected to join and contribute towards other occupational pension schemes where there is a wide array of packages, commensurate with one’s capacity.”
Through its division of investments, Shava described NSSA as a mass mobilizer of national savings that is essential to promoting economic development, job creation, and job security.
“The investments are intended to support economic growth while generating a decent return for NSSA’s long-term viability,” he added.
Currently, 33% of the labour force is covered by NSSA through two schemes; the Accident Prevention and Workers Compensation Scheme and the Pension and Other Benefits Scheme. The rise of the informal economy, which is presently not covered by social security programs for various reasons, is reflected in these trends.
According to NSSA Deputy Director Marketing and Public Relations Tinashe Mutyeyekwa, NSSA is attempting to create a voluntary program that would include participants in the informal sector as a means of resolving this issue. The program’s creation is in line with the country’s goal of developing into “An Empowered and Prosperous Upper-Middle Income Economy by 2030.”
“A feasibility study has been carried out thus far with technical assistance from the ILO. The findings of the study indicated that the establishment of a social security program for Zimbabwe’s informal sector is doable. Benchmarking interactions with neighbouring nations who have effectively implemented programs for the informal economy revealed the necessity of giving short-term gains priority in order to foster confidence among the participants,” said Mutyeyekwa responding to an enquiry by this publication.
Given their background and experience, NSSA has enlisted the help of the World Bank and ILO to provide technical assistance in coverage extension.
Director of Signs of Hope Samantha Sibanda applauded NSSA in an interview with The Besana Mail for intending to establish a pension plan for the informal sector.
“Many people are in the informal sector. If you look at persons with disabilities, most of them are doing work in the informal sector because of the inequalities that they face. First of all, there’s discrimination in the workplace and they can’t be placed in jobs. I believe, this is a scheme they will be interested to contribute to.”
“A high number of people with disabilities have never been to school, especially the women with disabilities,” explained Sibanda, “So you look at it and see that most of the persons with disabilities they don’t have the qualifications to get into the formal sector.”
NSSA has participated in the Tripartite Negotiating Forum and have received support from it through the Ministry of Public Service, Labour, and Social Welfare. In the first quarter of 2025, a priority needs assessment survey will be carried out in association with ZimStats as the following stage. Subsequently, there will be comprehensive stakeholder consultations while we progress with the design and estimation of the system.
The social security plans offered by NSSA are designed to work in tandem with occupational pension systems. The maximum contribution rate to the NSSA is 9% of one’s income, which is split equally between the employer and the employee. The insurance earning ceiling, which was recently raised to the ZWG equivalent of US$700 per month, applies to contributions.
“Prior to the June review, the maximum contribution one could make was around US$10, divided between the employer and the employee, as the insurable income ceiling was equal to approximately US$111. This payment was made in lieu of a US$50 minimum retirement pension,” NSSA mentioned in a statement.
In light of the fact that many studies indicate that the majority of people will not prefer “9 to 5” formal employment in the future, Sibanda stated that NSSA was being proactive and keeping up with global trends.
“So, I think NSSA being proactive to see such things and acknowledging the informal sector is a sector that is also contributing to the country’s GDP is a very big step. And I am sure that many persons with disabilities are going to benefit from that,” said Sibanda.
