Tanzania –Building a Productive Social Safety Net

Presentation to the DPG Meeting on Nov 12, 2013

Guide to the presentation Rationale Overall Approach Benefits and Costs Institutional Arrangements Challenges Implementation Status Strategic Issues

Why a social safety net in Tanzania?

Good economic growth but not commensurate with poverty reduction…

-50

510

15

Con

sum

ptio

n gr

owth

(%)

0 10 20 30 40 50 60 70 80 90 100

Consumption percentiles

Growth incidence, Tanzania Mainland, 2001 - 2007

High economic growth (7% annual average 2000-2007) but still high levels of poverty and vulnerability (poverty reduction 2000-2007: 2.2% total)

0

10

20

30

40

50

60

70

80

90

Jan

Feb

Mar

ch

Apr

il

May

Jun

e

Jul

y

Aug

ust

Sep

t

Oct

Nov

Dec

% H

Hs

agriculturesmall businesslivestockcommerce/businessdaily w ork

Seasonal shocks deepen chronic poverty and prevent improving wellbeing of the poorest

Seasonality in labor and livestock activities

… however, not everybody is equally poor…

1 2 3 4 5 6 7 8 9 100

10,00020,00030,00040,00050,00060,00070,00080,00090,000

100,000

Distribution of Consumption

Average per capita ConsumptionFood Poverty LineBasic Needs Poverty Line

Tsh per adult equivalent per month

a significant number of people is very close to the poverty line…

Poorest 10% 2nd Poorest 10%

3rd Poorest 10%

4th Poorest 10%

02000400060008000

1000012000140001600018000

Average per capita consumption among the poor

… but there are differences among the poor.

… and a significant proportion of the population is still highly vulnerable

High levels of poverty and food insecurity…

…and unacceptable social indicators

1 2 3 4 5 60

1000

2000

3000

4000

5000

6000

7000Caloric Consumption by Wealth Quintile

Caloric Con-sump-tion

Kcal

per

day

(adu

lt eq

uiva

lent

)

- Primary school attendance (poorest 40%): <80%

-Secondary school attendance (poorest 60%): <15%

- Stunting (poorest 60%): >40%- Births attended by skilled staff

(poorest 20%): 31%- Under 5 mortality: >130 per 1,000

- Life expectancy at birth: 52

How would a safety net in Tanzania look like?

Need for a productive social safety net system approach

To cope with chronic poverty

To mitigate shocks

To reduce vulnerability in the mid- and long-term by investing in human capital of children

To move on to a positive trajectory

Poor and vulnerable households require different types of support –A single intervention is not enough

+

CCTs(HH with children

and pregnant women)

Incl. monthly community

sessions

PWP(HH with adults able to work)Plus savings promotion

The Productive Social Safety Net: A system to support the poor and vulnerable in Tanzania

Income generating activities,Savings,Training

Education, health and nutrition

services

Human capital accumulation and

sustained reduction of poverty

v

Smooth consumptio

n, accumulati

on of assets

v

Participation for several years

*A family could be beneficiary of both programs

Unified registry of Beneficiaries

Common targeting

Who will be supported by the social safety net and how much will it cost?

Benefits and beneficiaries Target population: Population under the food poverty

line 1.2 million households (about 7.5 million people or 15% of

the population) Benefits

From the CCT: Basic benefit: US$5 per month per household Variable benefit: up to additional US$5 per month per household

From the cash-for-work: US$1.35 per day for up to 60 days in three months

Participation in the two programs equivalent to about 35% of annual household’s consumption

Hondu

ras (P

RAF)

Ecuad

or (B

DH)

Jamaic

a (PATH

)

Colombia

(Fam

ilia en

Acc

ion)

Red S

olida

ria (E

S)

Red de

Opo

rtunid

ades

(PA)

Guatem

ala (M

ifapro

)

Tanz

ania

(CCT o

nly)

Nicarau

gua (

RPS)

Mexico

(Opo

rtunid

ades

)

Tanz

ania

(CCT+

PW)0

5

10

15

20

25

30

35

40

It is a generous program…

Size of the benefit as % of pre-transfer consumption among beneficiaries

… with expected significant impacts… Ex-ante simulations indicate:

Extreme poverty reduction of 52% Extreme poverty gap reduction of 43%

… and affordable

Indon

esia

PKH (2

010)

Turke

y CCT (

2008

)

Malawi S

CT (20

11)

Peru

Juntos

(201

1)

Keny

a OVC (2

010)

Guatem

ala MFP

(201

0)

Namibi

a gran

ts (20

10)

Jamaic

a PATH

(201

1)

Colombia

FA (2

010)

Rwanda

VUP (20

12)

Hondu

ras PR

AF (20

10)

Philip

pines

4Ps (

2013

)

Mex Opo

rtunid

ades

(201

1)

Brazil B

F (20

11)

Ghana

LEAP (2

014)*

Tanz

ania

PSSN

(201

6)*

Indon

esia

UCT (20

06)

Ecua

dor B

DH (201

2)

South

Africa C

SG

Ethiop

ia PS

NP

Namibi

a (SP

)**

Leso

tho (S

P)**

Mauriti

us (S

P)**

0

0.5

1

1.5

2

Annu

al b

udge

t as

% o

f G

DP

*Estimated **Social Pensions

Annual cost of cash transfer programs as a % of the GDP

The cost once the program to reach the 1.2 million households: <1% of the GDP

Institutional Arrangements

Options for Scaling Up GoT had in Sept

Option 1: Reaching the 1.2 million households with transfers costing $300m/year by December 2015

Option 2: Having 1.2 million households targeted and enrolled in CCT before December 2015 then phase- in Public Works, COMSIP, nutrition interventions

Option 3: To only conduct the targeting and enrolment processes for all 1.2 million HHs in the program

Government endorsed the first option

Main Challenges for Scaling Up Moving from a social fund intervention

towards a social safety net approach

Capacity at LGA and ward levels to facilitate scaling up of a community-based approach

Ensuring predictable and timely transfers

Constructing and broadening the evidence base to rationalize SP expenditures to ensure sustainability

Implementation Status Short-term Roll out Plan: Nov 2013 – Jan 2014

(In progress now) Reach out to 12 Districts in Mtwara & Lindi Regions To reach 131,332 households Capacity Building for LGA teams, targeting and

enrolling, procedures and processes and tools Assess the roll out by January 2014

Long Term Detailed roll out to 2015 February Mission will incorporate lessons from the

assessment and finalize detailed massive roll plan: changes in processes, timing, costing, ICT/MIS and T/A

requirements

Coverage for Short-term Roll Out Plan

Estimated Number of Beneficiaries in the first 12 Project Authority Areas (PAAs)

  District/LGA Population

Number of H/H Number of Villages

Beneficiary HH

1 Mtwara DC 284,945

68,895 157 13,779

2 Masasi DC 532,199

144,913 222 28,983

3 Newala DC 212,390

56,786 155 11,357

4 Nanyumbu DC 191,750

46,181 89 6,927

5 Mtwara MC 111,454

28,230 91 4,235

6 Tandahimba DC

251,126

82,136 157 9,856

7 Tunduru DC 311,866

77,491 150 15,498

8 Lindi DC 257,325

64,354 132 9,653

9 Lindi TC 103,681

22,787 83 3,418

10 Kilwa DC 214,094

44,377 98 8,875

11 Ruangwa DC 151,536

43,170 89 8,634

12 Nachingwea DC

190,511

50,582 122 10,116

  Total 2,812,877

729,902 1,545 131,332

Strategic Issues Fiscal Sustainability

Option needs US$300m per yr at full coverage Sources of funds Government and donors Initial modeling suggests that fiscal impact of 0.6 - 0.8% of

GDPSpending on Safety Nets in a Selection of Low-Income Countries

Inclusion of PSSN in the Government’s recurrent budget MoF has advised that PSSN is in the budget preparation

guidelines for FY 2014/15 Ministry of Finance preparing Cabinet Paper Need support with policy note to inform Cabinet Paper

Country % of GDP

Per capita income

Approx. US$ per capita Spending

Ethiopia 4.5% $879 $39.54Madagascar 0.9% $768 $ 6.92Malawi 4.4% $577 $25.39

THANK YOU FOR YOUR ATTENTION

Objective of the productive social safety net

Increasing consumption of extremely poor on a permanent basisSmoothing consumption during lean seasons and shocksInvesting in human capital

Strengthening links with income generating activitiesIncrease access to improved social services

Tanzania Productive Social Safety Net Provision of predictable and timely cash transfers

through a combination of : CCTs for poor and vulnerable households (Education, health, nutrition) Participation in seasonal cash-for-work programs during the lean season and

shocks (a labor intensive intervention with 75/25 ratio of labor/capital)The same group of households will be beneficiary of both programs (over 85% beneficiaries will be able to participate in the CCTs and the cash-for-work

Institutional reform At the Social Protection sector level (Coordination, institutional responsibilities,

rationalization of SP expenditures) Implementing agency level (from a social fund to a safety nets approach)

Instruments to support a system approach Common targeting mechanism Single registry of beneficiaries Same payment mechanism Comprehensive and integrated MIS

In all LGAs select villages using a

Village/Mtaa/Shehia Index

Village Assembly

identifies the poorest

households

CMC collects information

from households

TASAF verifies list of beneficiaries applying

a PMT

Village Assembly

validates final list of

households

CMCs collects information to

register beneficiaries in

the URB

URB(administered by

TASAF)

VC sends list of hh via LGAs

Selection and Registry of Beneficiaries

TASAF sends list of hh via LGAs

Decentralized operations and processes Central level (TASAF): Overall management and monitoring, support to sub-national

authorities, disbursement of funds. Coordination with other SP actors (Welfare)

Regional level: Follow up of implementation in LGAs

LGA level: Provision of support to ward level extension staff. Technical support and guidance including training and follow-up of implementation in the villages. Selection of works and activities.

Ward level: Direct provision of technical support to communities and households

Village level: Selection of beneficiaries by CMC under oversight of Village Council, endorsed by Village Assembly, overall support to program

CMCs: Day to day implementation management, collection of information to register beneficiaries and to verify compliance with co-responsibilities

Education and health sectors: Provision of information on compliance with co-responsibilities

Payment Agents: Direct transfer to beneficiary households and reconciliation of payments

Social Protection Policy Environment Draft National Social Protection not yet

endorsed by Cabinet but in principle it is accepted

Cabinet has asked for an action Plan that will operationalize the Framework

Ministry of Finance is working on the plan (timeframe for this work not known)

Implementation Status (cont….) Procurement processes are in progress for:

Unified Registry of Beneficiaries Mobile Payments MIS enhancement Recruitment for staff almost finalized at national

and district levels Procurement of goods in progress International TA is in place assisting with massive

scale-up