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THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA: CHALLENGES AND

OPPORTUNITIES

Technical Report · November 2014

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THE STATUS OF SOCIAL
SECURITY SYSTEMS IN
UGANDA:
CHALLENGES AND OPPORTUNITIES

Paul Bukuluki
John-Bosco Mubiru
REALITY CHECK

THE STATUS OF SOCIAL SECURITY

SYSTEMS IN UGANDA:
CHALLENGES AND OPPORTUNITIES

Paul Bukuluki

John-Bosco Mubiru

Makerere University School of Social Sciences, College

of Humanities and Social Sciences,Makerere University,
Kampala, Uganda

November 2014

The views expressed in this publication do not necessarily reflect

the views of the Konrad-Adenauer-Stiftung but rather those of the
author.

CHALLENGES AND OPPORTUNITIES i

Reality Check

THE STATUS OF SOCIAL SECURITY

SYSTEMS IN UGANDA:
CHALLENGES AND OPPORTUNITIES

ISBN: 978 9970 477 03 6

Authors
Paul Bukuluki
John-Bosco Mubiru

Konrad-Adenauer-Stiftung, Uganda Programme

51A, Prince Charles Drive, Kololo
P.O. Box 647, Kampala
Tel. +256 414 25 46 11
www.kas.de

© Konrad-Adenauer-Stiftung e.V. 2014

All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
means, without prior written permission on the Konrad-Adenauer-
Stiftung.

ii THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

CONTENTS
Foreword............................................................................. vi

List of acronyms and abbreviations.................................... vii

1.0.Introduction ...................................................................1

1.1.Background about Uganda................................................. 2

1.2.Poverty and Vulnerability Context in Uganda......................... 4

1.2.1.Income inequality in Uganda...................................... 6

1.2.2.Poverty incidence and education level in household....... 7

1.3. Poverty among the Vulnerable Groups in Uganda.................. 8

1.3.1.Older persons.......................................................... 8

1.3.2.Persons with disability (PWDs)................................... 9

1.4.Social Security and Social Protection...................................10

1.5.Conceptual and Analytical Framework.................................12

1.5.1.Conceptual debates in social protection

policy and programming...........................................19

1.5.2.Transformative social protection framework

and social protection in Uganda.................................24

2.0.Global perspective on social security systems..............26

2.1. Industrialised Countries...................................................27

2.2. Communist Countries......................................................29

2.3. Transitional Countries......................................................30

2.4. Developing Countries.......................................................31

3.0.The evolution of social security

Systems in Uganda......................................................34

3.1.Pre-colonial Period...........................................................34

3.2.Colonial Period (1894 - 1962)............................................36

CHALLENGES AND OPPORTUNITIES iii

3.3.Post-independence Period (1962 to-date)............................39

4.0.Institutional, legal and policy

Framework of social security systems in Uganda...............46

4.1.Institutional Framework....................................................46

4.2.Legal and Policy Framework of Social Security

Systems in Uganda (Acts, Policies, Strategies
and Development Plans).........................................................49

5.0.Drivers and opportunities for the

Development of social security systems in Uganda............57

6.0.Analysis of key social security

Schemes in Uganda............................................................61

6.1.Public Service Pension Scheme (PSPS)................................61

6.2.The Parliamentary Pension Scheme....................................62

6.3.National Social Security Fund (NSSF)..................................64

6.4.Reforms in the Pension Sector of Uganda............................65

6.5.Workers’ Compensation....................................................71

6.6.National Health Insurance.................................................72

6.7.Social Assistance Grants for Empowerment (SAGE)...............75

6.8.Public Works Programmes.................................................76

6.9.Private Social Security Schemes.........................................78

6.9.1.Private health insurance schemes....................................79

6.9.2.Community-Based Health Insurance Schemes...................80

6.10.Informal Social Security Systems in Uganda......................83

7.0.Gender and social security in Uganda...........................87

8.0.Financing social security in Uganda..............................90

8.1.Social security spending on the Public Service

Pension Fund (PSPF)..............................................................91

8.2.National Social Security Fund (NSSF)..................................93

iv THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

8.3.Direct income support......................................................94

8.4.Workers’ Compensation....................................................97

8.5.Social security donor financing in Uganda............................99

9.0.Challenges of the formal and

Informal social security systems......................................103

9.1.Challenges in the Formal Social Protection Systems............103

9.2.Challenges of informal social security................................107

10.The future of social security systems in Uganda..........111

11.CONCLUSIONS ...............................................................118

12.REFERENCES ...............................................................121

13.ANNEX ...............................................................137

CHALLENGES AND OPPORTUNITIES v

Foreword
“Everyone, as a member of society, has the right to social security and
is entitled to realization, through national effort and international co-
operation and in accordance with the organization and resources of
each State, of the economic, social and cultural rights indispensable
for his dignity and the free development of his personality.” (Universal
Declaration of Human Rights Article 22)

Social security, a proclaimed Human Right, is a key mechanism to ensure

social and economic equality. Social inequalities are a considerable
strain on any society and economy. Therefore, different forms of social
security systems have been applied by nations, religious institutions, or
private companies for centuries in order to mitigate the many negative
effects of poverty. Internationally, it is now recognized by most countries
that some form of social security mechanisms are crucial to a country’s
healthy and effective social and economic development.

On this background, the Konrad-Adenauer-Stiftung (KAS) is promoting

the concept of Social Market Economy also internationally as a
consideration and inspiration for policy makers and representatives of
the private sector, who influence the economic and social development
of different countries around the world. Sharing experiences in economic
policy drafting and balancing state-led social security schemes with the
preservations of individual and market freedoms is therefore at the
core of KAS’ international efforts to strengthen the global link between
economic growth and social justice.

This publication addresses the situation in Uganda and provides a

comprehensive presentation of the strength and weaknesses of the
Ugandan social security systems. It gives an insight into the development
and situation of both formal and informal security systems in Uganda
and analyses the different available options as well as the remaining
gaps.

We hope, this publication will make a significant contribution to the

complex and thriving discourse on the development of a Ugandan social
security system, and wish for the deep and enriching impact the authors
have envisioned.

Dr. Angelika Klein,

Country Representative KAS Uganda

vi THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

List of Acronyms and Abbreviations
BOU Bank of Uganda
CBHIS Community Based Health Insurance Schemes
CCT Conditional Cash Transfer
CfW Cash for Work
CSOs Civil Society Organisations
DAR Development Assistance to Refugee Hosting Areas
DFID Department for International Development
DRT Development Research and Training
EC European Commission
EPRC Economic Policy Research Centre
ESPP Expanding Social Protection Programme
FfW Food for Work
HDI Human Development Index
ILO International Labour Organisation
KALIP Karamoja Livelihood Programme
Karamoja Integrated Disarmament and Development
KIDDP
Programme
KPAP Karamoja Productive Assets Programme
LEARN Livelihoods and Economic Recovery in Northern Areas
MDG Millennium Development Goals
MFPED Ministry of Finance, Planning and Economic Development
MGLSD Ministry of Gender, Labour and Social Development
MOH Ministry of Health
MOPS Ministry of Public Service
NDP National Development Plan
NGOs Non-Governmental Organisations
NSSF National Social Security Fund
NUREP Northern Uganda Recovery Programme
NUSAF Northern Uganda Social Action Fund

CHALLENGES AND OPPORTUNITIES vii

OPM Office of the Prime Minister
OVC Orphans and Vulnerable Children
PRRO Protracted Relief and Recovery Operation
PSPF Public Sector Pensions Fund
Restoration of Agricultural Livelihoods in Northern
RALNUC
Uganda
SAGE Social Assistance Grants for Empowerment
UBOS Uganda Bureau of Statistics
UDHS Uganda Demographic and Health Survey
UNHS Uganda National Household Survey
VfW Voucher for Work
WFP World Food Programme
YLP Youth Livelihoods Programme

viii THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

1.0. Introduction
This paper aims at examining the social security systems (social
protection) in Uganda. The paper seeks to provide an overview of
the evolution of social security systems in the country from the
pre-colonial era through the colonial period to the post-colonial
with a focus on challenges and opportunities. The trends of social
security development indicate that Uganda has inherited a formal
social security system established by the colonial administration
that caters for both public and private employees. Uganda has a
multi-tier pension system model with contributory social insurance,
non-contributory direct income support and voluntary private
pension schemes. However, the traditional (informal) social
support mechanisms (kinship, extended family and mutual support
groups) are the most important social security providers in the
country, particularly to those who lack or have limited access to
formal systems, such as those in the informal sector. The paper
concentrates mainly on the social security systems in Uganda with
only a few references to other countries.

The paper is divided into 11 chapters. Chapter 1 is the

introduction and consists of the background and context of Uganda,
understanding of social security and social protection concepts, and
conceptual and analytical social protection frameworks. Chapter
2 describes the global perspective of social security focusing on
developed, communist, transitional and developing countries.
Chapter 3 highlights the evolution of social security systems (formal
and informal) in Uganda. It categorises the development of social
security systems into three stages – the pre-colonial, the colonial
and the post-colonial eras. Chapter 4 focuses on the institutional,
legal and policy framework of social security systems in Uganda.
Chapter 5 provides an overview of drivers and opportunities of social
security systems. Chapter 6 analyses the different social security
systems in Uganda. This chapter also describes the proposed pension
sector reforms as well as the predicted challenges that Uganda may
encounter during the implementation of the reforms (transition
period). Chapter 7 highlights gender issues and social security in
Uganda. Chapter 8 examines the financing of social security systems
with a focus on contributions from the government, development
partners and beneficiaries in the case of NSSF. Chapter 9 describes

CHALLENGES AND OPPORTUNITIES 1

the challenges facing both the formal and informal social security
systems in Uganda. Chapter 10 provides an overview of the future
of social security in Uganda. Lastly, Chapter 11 concludes the paper
with a summary of key findings.

The paper was principally based on a desk review of the existing

information on social security systems in Uganda. A range
of documents were reviewed, including national policies and
statements, published papers, operational research and evaluation
reports, workshop presentations, online journals, project documents,
newspapers and relevant websites.

1.1. Background about Uganda

Uganda is one of the East African Community (EAC) countries.
According to the provisional census results, it has a population
of 34.9 million, with an annual population growth rate of 3.03%
(Uganda Bureau of Statistics, 2014). The life expectancy stands at
56 years among men and 58 years among women (WHO, 2012).
In addition, the total fertility rate was 6.2 children per woman; the
infant mortality rate was at 54 deaths per 1,000 women whereas
the under-five mortality rate was at 90 deaths per 1,000 live births.
The maternal mortality ratio per 100,000 live births stood at 438
(UDHS, 2011). Between 2009/10 and 2012/13, there was a slight
drop in the literacy rate by 2%. Furthermore, 18% of the persons
aged 15 years and above lacked formal education, while 8% of the
school-going age of 6- 24 years had never attended school. Literacy
rates for persons aged 18 years and above declined from 71% in
2009/10 to 68% in 2012/13. In addition, adult literacy rates among
both males and females are higher in urban areas than in rural areas
(UNHS, 2012/13).

The Government of Uganda has since 1986 pursued several economic

and governance reforms that have seen a number of changes take
place, including the restoration of macroeconomic stability and
confidence in the national economy; improvement in public service
delivery through a decentralised system of government; improved
functioning of institutions under the three arms of government –
the legislature, the executive and the judiciary; restoration of
political pluralism; and the restoration of peace and security across
the country apart from the insecurity that resulted from the Lord’s

2 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Resistance Army (LRA) war in some parts of northern and eastern
Uganda between 1986 and 2005 (MFPED, 2013).

Over the past two decades, Uganda has established a sound

macroeconomic environment which has contributed to improvement
in some of the key socio-economic indicators of growth. Between
1997/98 and 2000/01, gross domestic product (GDP) growth
averaged 7.2%, between 2000/01 and 2003/04, it averaged 6.8%,
and increased to 8% between 2004/05 and 2007/08 (MFPED,
2012). However, owing to both internal and external shocks such as
the global economic and financial crisis, high commodity prices and
the recurrent drought conditions across the country, the economic
growth significantly slowed down to about 3.2% in 2011/12 (UBOS,
2013; Cammack and Twinamatsiko, 2013). In addition, inadequate
infrastructure and inefficient financial intermediation are increasingly
slowing down economic activity (World Bank Uganda Economic
Outlook, 2014). Despite the shocks, Uganda’s economy has been
growing strongly over the last seven years. Projections indicate that
after a lull through 2013/14, growth is expected to resume at 7%
per annum (UBOS, 2013; Cammack and Twinamatsiko, 2013).

Growth rates have been steadily improving in recent years as a

result of macroeconomic stability, including single digit inflation and
a more stable exchange rate. In addition, real GDP growth has been
much less volatile than in previous years, which were characterised
by large up-and-down swings from one quarter to the next (MGLSD,
2014c). The service sector has continued to be the main driver
of economic growth in Uganda. Within this sector in the recent
years, growth has mainly been driven by the telecommunications,
wholesale and retail trade sub-sectors and, to a lesser extent, by
public administration. The services sector also absorbed the largest
proportion of labour outside the agricultural sector. However, overall,
Uganda’s economic growth has remained below that of some of
the EAC countries over the past five years (World Bank Economic
Outlook, June 2014).

Most Ugandans reside in rural areas, with the majority relying on

agriculture. In addition, the agricultural sector employs the highest
proportion of the poor persons in Uganda (UNHS, 2012/13). The
farmers continue to use non-mechanised farming techniques (such
as hoes) and use few improved inputs, so commercial activity is only

CHALLENGES AND OPPORTUNITIES 3

slowly beginning to pick up. The agricultural sector is increasingly
being affected by an unpredictable climate; a higher frequency of
droughts; limited investment in irrigation; soil depletion resulting
from limited fertiliser usage; and rising population pressures that are
creating additional challenges for the sector (World Bank Economic
Outlook, June 2014).

The unemployment1 rate stands at 9%, with about 817,000

unemployed persons in Uganda. There is also an unemployment
gender gap, with more women (11%) compared to men (8%) being
unemployed. In addition, the unemployment rate in the rural areas
(10%) is slightly higher than that in the urban areas (8%). There
are also regional unemployment variations, where the central and
east-central regions have the highest unemployment rates (14%),
with the lowest (3%) being in West-Nile (UNHS, 2012/13). There
is growing unemployment, particularly among the better-educated
workers, which indicates that the rate of non-agricultural job creation
has been inadequate in Uganda. Despite the fact that fewer workers
are reliant on the agricultural sector, inadequate firm creation and
growth mean that many youth leaving rural areas struggle to make
a living in the informal sector (MFPED, 2014).

1.2. Poverty and Vulnerability Context in

Uganda
Despite the rapid economic growth, as reflected by the growing
government revenues and prudent macroeconomic management
(Cammack and Twinamatsiko, 2013), Uganda continues to rank very
poorly in a number of human development indices. The recently
published Human Development Report of 2014 puts Uganda’s
Human Development Index value for 2013 at 0.484, which positions
the country in the low human development category at 164 out of
187 countries. The same report notes that an estimated 72.3% of
the population suffers from multiple deprivations and an additional
19.5% are vulnerable to deprivations (UNDP, 2014).

Over the last two decades, the Government of Uganda has been
implementing policies and programmes, such as Peace Recovery
and Development Programme (PRDP), National Agricultural Advisory
Services (NAADs), Northern Uganda Social Action Fund (NUSAF),
1 Unemployment refers to total lack of work (UNHS, 2012/13).

4 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Poverty Action Fund, rural financial services such as Savings
and Credit Cooperatives (SACCOs), Social Assistance Grants for
Empowerment, Universal Primary Education (UPE), and Youth
Livelihoods Programme (YLP), among others, to reduce poverty and
vulnerability. In the last 20 years, the percentage of people living in
poverty (income poverty)2 has fallen from 56% in 1992/93 to 31%
in 2005/06 and to around 19.7% (6.7 million Ugandans living below
the poverty line) in 2012/13 (MFPED, 2014; UNHS, 2013). In addition
to the above programmes, poverty reduction over the years has also
been attributed to the general economic development and significant
public investment in physical infrastructures – road networks, rural
electrification, information and communication technology (ICT)
growth and several targeted government interventions (MFPED,
2014).

Figure 1: Poverty trends at national level and by region

Poverty trends (% of population below poverty line)

70
60
50
Population

40
30 2005/06

20 2009/10
10
2012/13
0

National Central Eastern Northern Western

Regions

Source: Uganda National Household Survey (UNHS), 2012/13

The incidence of poverty remains highest in northern Uganda (44%)

and least in the central region (4.7%). At the sub-regional level,
75% of the people in the Northeast (Karamoja) are income poor,
followed by West Nile (42%) and the Mid-North (36%). The high

2 The national poverty line used in Uganda is estimated, at prevailing exchange

rates, to be equivalent to USD 0.53 per person per day. The national poverty line
is derived from a basket of goods that was established in 1993 and, at that time,
was seen to reflect ‘basic needs’. Poverty trend estimates focused on the cost of
meeting caloric needs and some allowances for some non-food (UNHS, 2012/13;
MGLSD, 2014c).

CHALLENGES AND OPPORTUNITIES 5

rates of poverty in northern and northeastern Uganda is partly
explained by the violent and armed conflicts that engulfed those
regions between the 1980s and 1990s. The incidence of poverty in
these regions is much higher than the national average of 19.7%
(UNHS, 2012/13). However, Uganda’s national poverty line is
estimated to be equivalent to USD0.53 per person per day, which is
well below the international poverty line of USD1.25 per person per
day (MGLSD, 2014c). There are also rural-urban poverty variations
in Uganda. The 2012/13 household survey data indicate that the
incidence of poverty remains higher in the rural than in the urban
areas. The rural poor constitute 22.8% of the population compared
to only 9.3% in the urban areas. It is further reported that the
rural areas, with about 77% of the population, constitute 89% of
the national poverty whereas the urban areas represent 22.6%
of the population and constitute 11% of national poverty (UNHS,
2012/2013).

However, despite the reduction in the number of people living in

absolute poverty (19.7%), the percentage of the non-poor who are
insecure3 has increased from 34% in 1992/93 to 43.3% in 2009/10
(MFPED, 2012). According to the 2014 Poverty Status Report, in
2012/13 more than half of the non-poor population was classified
as insecure, living below twice the poverty line. In total, 21.4 million
Ugandans (63% of the population) were either poor or vulnerable
to poverty. Rural households are more vulnerable to falling into
poverty compared to urban households. The drivers of vulnerability
to poverty in Uganda include climatic shocks – drought, irregular
rains or floods –, ill health, crop or livestock diseases and pests and
insecurity – conflict, violence or theft (MFPED, 2014).

1.2.1. Income inequality in Uganda

In addition, the levels of income inequality have decreased to 0.395
in 2012/13, from a Gini coefficient of 0.426 in 2009/10. In addition,
there is a notable reduction in income inequality in the central,
eastern and western regions while there is an increase in income
inequality in the northern region of Uganda (UNHS, 2012/13) as
indicated in the Table 1 below.

3 Uganda Bureau of Statistics calls the ‘insecure non-poor’ those with consumption
between the poverty line and twice the poverty line.

6 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Table 1: Income inequality trends by region in Uganda
Gini coefficient
2002/03 2005/06 2009/10 2012/13
National 0.428 0.408 0.426 0.395
Central 0.460 0.417 0.451 0.392
Eastern 0.365 0.354 0.319 0.319
Northern 0.350 0.331 0.367 0.378
Western 0.359 0.342 0.375 0.328

Source: UNHS, 2012/13

1.2.2. Poverty incidence and education level in household

Nationally, the literacy rates have reduced slightly over the past five
years, from 72% in 2009/10 to 70% in 2012/13 (UBOS, 2013). Access
to education provides opportunities for better-paying jobs, allowing
some to move from subsistence agriculture to other activities, as
well as raising productivity and income. Access to education has
improved dramatically since the Government of Uganda introduced
Universal Primary Education (UPE) in 1997. Forty-nine per cent of
the youth aged 18 to 30 have now completed primary school or
higher levels of education, compared to just 21% of those aged
45 to 65 (UNHS, 2012/13). In 2012, a poverty, vulnerability and
inequality study in Uganda revealed that households with no member
having achieved primary education completion or higher level of
education have a poverty incidence (35%) higher than the national
average (24.5%). Households with at least primary education
have a relatively lower poverty incidence compared to the national
average. However, households with at least primary education have
a slightly lower poverty incidence (22%) and households with post-
primary schooling a much lower incidence, at 12% (Wylde et al.,
2012a).

CHALLENGES AND OPPORTUNITIES 7

1.3. Poverty among the Vulnerable Groups in
Uganda
There are several vulnerable4 groups in Uganda. These include people
with disability, widows, child-headed households, orphans and other
vulnerable children, people living with HIV and people living with
AIDS, internally displaced people, older people, households affected
by natural disasters, and communities recovering from conflict
(especially in northern and eastern Uganda) (Wylde et al., 2012a;
MFPED, 2012). Vulnerable groups tend to have higher rates of
poverty than the national average.

1.3.1. Older persons

Analysis of UNHS 2009/10 conducted by the MGLSD indicates that an
estimated 29% of the households containing older people are poor
and 74% are insecure non-poor compared to the national average
of 67.5% (MGLSD, 2014c). According to the 2012/13 household
survey, the number of older persons has increased from about 1.3
million to 1.6 million from 2009/10 to 2012/13. Out of 1.6 million,
75% of the old persons are household heads (UNHS, 2012/13).
Older persons are vulnerable to poverty as a result of a number of
factors. These include their concentration in rural areas where most
of them are engaged in crop farming that is affected by deterioration
of soil quality and adverse weather conditions; limited access to
pension schemes; widespread chronic ill health and disability; and
continuing care for children (MFPED, 2014).

Similarly, extreme poverty among older people is associated with

‘vulnerabilities stemming from an absence of income security,
inadequate family or social support, and poor health combined with
inadequate health care’ (Gorman and Heslop, 2002). External shocks
and stresses further amplify these vulnerabilities, as traditional
family care structures erode, along with traditional respect for older
people (HelpAge International, 2002). Multigenerational households
with older people are, by and large, poorer than households without
older people (Schwarz, 2003).

4 Vulnerability is a state of being or likelihood to be in a risky situation, where a

person is likely to suffer significant physical, emotional or mental harm that may
result in their human rights not being fulfilled (UNHS, 2012/13)

8 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Table 2: Orphanhood and poverty status, 2009/10

Poverty % of
incidence children
Both parents alive 26.0 87.3
Father is dead, mother
30.7 7.5
alive
Mother is dead, father alive 28.3 2.3
Both parents are dead 31.1 2.3
Don’t know parents 21.4 0.6

Total 26.5 100.0

Source: Wylde et al., 2012a

Orphanhood
The poverty, vulnerability and inequality study conducted by the
Ministry of Gender, Labour and Social Development (MGLSD)
revealed that double orphans and those whose fathers have died
and are living with their mother have a very high incidence of
poverty of about 31%. Children living with their mother only (even
if their father is alive) also appear to be more vulnerable to poverty
than children living with both parents, given the vulnerability
women encounter, such as limited access to employment (Wylde et
al., 2012a). However, according to the 2012/13 household survey,
orphanhood in Uganda has slightly decreased from 15% in 2005/06
to 11% in 2012/13 (UNHS, 2012/13).

1.3.2. Persons with disability (PWDs)

The incidence of disability increases significantly with age, as would
be expected: at age 56-65 only 0.5% of the population has a severe
disability, but this increases by six times for those individuals in
the next age bracket of 66-75. For partial disability, the incidence
increases by 50% between the age groups of 36-45 and 46-55, then
continues to more than double for each subsequent age bracket
(Wylde et al., 2012a). Moreover, households with at least one
severely or partially disabled member have a poverty incidence of
almost 30% (Wylde et al., 2012).

CHALLENGES AND OPPORTUNITIES 9

Table 3: Distribution of age categories across disability
status

At least 1 Partial
Severe
score of disability -
disability
Age No 2 ‘some At least 1
- At least
category disability difficult’ and score of ‘3’
1 score
none of 3 and none
of 4
or 4 of ‘4’

3 to 5 95.29 2.97 1.15 0.6

6 to 10 89.61 7.97 1.51 0.92
11 to 15 91.09 6.66 1.72 0.54
16 to 25 90.4 7.34 1.85 0.41
26 to 35 88.78 9.14 1.86 0.22
36 to 45 78.87 18.08 2.85 0.2
46 to 55 61.93 30.98 6.64 0.44
56 to 65 50.24 36.87 12.41 0.48
66 to 75 32.35 45.24 19.83 2.57
76 to 85 21.24 44.57 30.65 3.53
86 and
18.1 34.84 43.1 3.96
over
Total 87.1 9.74 2.63 0.52

Source: Wylde et al., 2012a

0verall, poor households in Uganda face a range of highly

interconnected risks, including economic, socio-political,
environmental and health-related shocks and stresses that happen
throughout their life cycle (Bukuluki and Watson, 2012). Therefore,
a nuanced understanding of how different social groups experience
poverty and vulnerability is vital for designing and implementing
effective social security and broader social protection interventions
that support pathways out of poverty and contribute to social justice
outcomes.

1.4. Social Security and Social Protection

In many contexts, the terms ‘social security’ and ‘social protection’
are used interchangeably. The term ‘social protection’ is increasingly
taking the place of the expression ‘social security’ that has been

10 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

widely used for decades (Cichon et al., 2004). However, social
protection is considered to be broader than social security in that it
has wider application and can include developmental programmes
and strategies. Social protection covers actions addressing more
than risk such as, for example, measures to address discrimination
and safety at work, and social services such as health and education
(Caracciolo, 2010). A distinction can, however, be made: the
International Labour Organization (ILO) convention 102 describes
‘social security’ as guaranteeing a stable income through medical
care, sickness benefits, unemployment benefits, old-age benefits,
employment injury benefits, family benefits, maternity benefits, and
invalid benefits (ILO, 1952). On the other hand, ILO (2003) mentions
that various authors have considered the ILO standard definition of
social security as being too narrow for the problems encountered by
developing countries. This ILO (2003) further cites Guhan (1994),
who claims that social security in poor countries should be viewed
as part of, and fully integrated into, anti-poverty policies, providing
access to productive assets, employment guarantees, minimum
wage and food security (ILO, 2003). However, Kasente (2006)
reports that a review of formal social security schemes in the African
region indicated that social security is conceptualised on the basis of
the perspective of the ILO definition.

For the purposes of this paper, the two terms will be used
interchangeably. This is basically because social protection comprises
social insurance in the form of contributory schemes for life-course
and work-related contingencies, social assistance for addressing
poverty and vulnerability as well as employment programmes (Videt,
2013). In addition, Uganda has defined the term ‘social protection’
using a similar approach, as seen below.

According to the Ministry of Gender, Labour and Social Development

(MGLSD), the term ‘social protection’ refers to public and private
interventions to address risks and vulnerabilities that expose
individuals to income insecurity and social deprivation, leading to
undignified lives. In addition, social protection is a basic service and
a human right that ensures the dignity of people (MGLSD, 2014a).

In the Ugandan context, the current draft of the Uganda Social

Protection Policy being developed by the MGLSD through the
Expanding Social Protection (ESP) Programme categorises social

CHALLENGES AND OPPORTUNITIES 11

protection into two pillars, namely social security and social care
services. Social security includes direct income support (or social
transfers) and social insurance. Direct income support is a non-
contributory transfer to extremely vulnerable individuals and
households without any form of income security. Social insurance,
on the other hand, is a contributory system to mitigate livelihood
risks and shocks such as retirement, loss of employment, work-
related disability and ill health. Social care and support services
are concerned with the provision of care, support, empowerment
and protection to vulnerable persons who are unable to fully care
for themselves (ibid.). Social care services include the protection
of children from violence and exploitation; care for chronically sick
or disabled children and adults; support in dealing with the social
difficulties of those affected by conflicts and disasters and responses
to gender-based violence (OPML, 2013).

In addition to the two pillars (social security and social care services),
there are complementary interventions which are critical for social
protection beneficiaries to overcome risks and shocks. These include
interventions articulated in policies for the agriculture (National
Agricultural Advisory Services), health, education (Universal Primary
Education, Universal Secondary Education), employment (Youth
Livelihoods Programme) and finance sectors (Savings and Credit
Cooperative Organisations) (MGLSD, 2014b). Given the fact that
the paper concentrates on the social security systems in Uganda,
it focused on the social security pillar – social insurance and social
assistance schemes in Uganda.

1.5. Conceptual and Analytical Framework

Social protection has evolved to become a central subject of
discussion in academic, policy and programming debates. We agree
with the argument made by the Governance, Social Development,
Humanitarian and Conflict (GSDRC) agency that the concept of
‘social protection offers a way of thinking of the requirements of
groups and individuals to live a fulfilling life, the role of the state
in facilitating this, and the vulnerabilities of particular groups or
individuals’. Social protection has also been defined to mean ‘the
public actions taken in response to levels of vulnerability, risk and
deprivation which are deemed socially unacceptable within a given
polity or society’ (see Norton, Conway and Foster, 2011:1). Similarly,

12 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

the International Labour Organisation argues that ‘systems of social
protection enable societies to advance the well-being and security of
their citizens by protecting them from vulnerability and deprivation
so that they can pursue a decent life’ (ILO, 2003:1). Therefore,
the concept of social protection provides a lens that academia,
policy-makers and practitioners can use to think creatively in the
process of designing primary and secondary interventions aimed at
responding to individual, family and community vulnerabilities as
well as the individual and structural factors affecting their capacity
and agency to achieve a good quality of life. Quality of life is a
multi-dimensional concept that encompasses ‘physical wellbeing,
material wellbeing, social wellbeing, emotional wellbeing, and
development and activity’ (Felce and Perry, 1995: 51). As argued
by the International Labour Organisation (2003:1), social protection
contributesd to ‘enhancing the quality of life of individuals and
societies by developing and unleashing human potential, facilitating
structural change, increasing stability, advancing social justice and
cohesion, and promoting economic dynamism’.

Several scholars argue that the formal concept of social protection

originates from the ‘West’, particularly Germany and Britain,
based on the perception that the state is the prime provider and
protector of citizens. This assertion draws heavily on experiences
from Western Europe, particularly during in the post-World War II
epoch (Anderson and Pontusson, 2006; Iversen and Cusack, 2000).
This is reminiscent of the welfare state that designs and implements
programmes through which the state and its apparatus pursue the
goal of social protection against economic and social risks of life and
well-being, including unemployment, infirmity, disability, ill health
and other forms of misfortune or calamity (ILO, 2003; Guest, 1980).

Similarly, some scholars have noted that ‘welfare is the absolute

minimum that society provides to ensure individual survival and
dignity‘ (Kahl, 2014:2). This is conceptualised as the ‘last resort
safety net, is a small and residual part of the welfare state for
those of the poor who have no alternative source of support
whatsoever’ (Kahl, 2014:2). According to the GSDRC, originally
the conceptualisation of social protection was limited to enhancing
people’s coping capacities and enabling them to attain and sustain
their social functioning. This was particularly through measures
(such as the provision of unemployment benefits, food rations,

CHALLENGES AND OPPORTUNITIES 13

referrals, psychosocial support) undertaken to enable them to cope
with and mitigate shocks and heightened vulnerabilities. However,
as noted by Devereux and Sabates-Wheeler (2004) over the last
decades, the thinking about social protection has evolved and
taken a paradigm shift to encompass active mitigation of risks and
vulnerabilities. As these authors noted in their editorial in the Institute
of Development Studies Bulletin, four types of interventions have
emerged and are increasingly becoming influential in theoretical
and programmatic debates around social protection. These include:
protective (recovery from shocks); preventative (mitigating risks in
order to avoid shocks); promotive (promoting opportunities); and
transformative (focusing on underlying structural inequalities which
give rise to vulnerability) (Devereux and Sabates-Wheeler, 2004;
also see GSDRC5 n.d.).

The conceptualisation and analysis of social protection in this paper

leans quite strongly on Devereux and Sabates-Wheeler’s (2004)
Transformative Social Protection model and the Social Protection
Life Cycle approach developed by Cain (2009).

a)Devereux and Sabates-Wheeler’s (2004) Transformative

Social Protection model/framework
This framework first of all acknowledges the lack of a universal
definition of social protection and the consequent confusion that
the concept and subject of social protection ‘remains a term that
is unfamiliar to many and carries a range of definitions, both in
the development studies literature and among policymakers
responsible for implementing social protection programmes’
(Devereux and Sabates-Wheeler, 2004: 3). This model, however,
contends that as much as there are diverse understandings and
definitions of the concept of social protection, the bottom line is
that addressing poverty and vulnerability form its central focus.
Devereux and Sabates-Wheeler in their framework categorise social
protection interventions into protective, preventive, promotive
and transformative measures (2004: 9). Protective measures
aim to provide relief from poverty and deprivation in the event
that promotional and preventive measures have defaulted on this
mandate (ibid.). Protective measures encompass social assistance

5 See http://www.gsdrc.org/go/topic-guides/social-protection/understanding-
social-protection

14 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

for the chronically poor, social services meant for the poor and
groups needing special care such as orphans, abandoned children,
refugees and internally displaced persons (IDPs), and people living
with HIV (PLHIV), among others (Devereux and Sabates-Wheeler,
2004: 10).

Preventive measures aim at shielding individuals from poverty and

deprivation by dealing directly with poverty alleviation. Examples
include social insurance for ‘economically vulnerable groups6’ that
have fallen or might fall into poverty, and hence require support
to help them manage their livelihood shocks. Examples of such
preventive programmes include formalised systems of pensions,
health insurance, informal mechanisms such as savings clubs and
funeral societies, and crop or income diversification (Devereux and
Sabates-Wheeler, 2004: 10).

Promotive measures are tailored towards enhancing households’

and individuals’ livelihood, real incomes and capabilities. The central
objective here is to realise measures that yield income stabilisation
such as micro-finance, village savings and loans associations etc.
(ibid., p. 10).

Transformative measures primarily target concerns of social equity

and exclusion, and promoting social justice through fostering the
rights and empowerment of the poor and vulnerable groups such
as the aged, people with disability, households with orphans and
vulnerable children etc. (Devereux and Sabates-Wheeler, 2004).

Transformative social protection goes beyond income and

consumption transfers to fostering issues of equity, empowerment
and economic, social and cultural rights as well as deliberately
channelling attention towards changing the regulatory framework to
protect socially vulnerable groups against discrimination and abuse,
6 ‘Vulnerability means the risk of being harmed, negatively affected by unforeseen
events’ ( Guillaumont, 1999 cited in Gordon Cordina, 2004: 23). Vulnerable
groups are those that are at risk of being negatively affected by unforeseen events
and whose ability to cope with such events is limited. Vulnerable groups in the
social protection context are those with a diminished capacity to ‘anticipate, cope
with, resist and recover from the impact of a natural or man-made hazard’ (see
the International Federation of Red Cross and Red Crescent Societies website).
Although vulnerability is linked to poverty, it goes beyond poverty to include
isolation, insecurity and defencelessness in the face of risk, shock or stress (see
http://www.ifrc.org/en/what-we-do/disaster-management/about-disasters/what-
is-a-disaster/what-is-vulnerability/) [Accessed on 20 November 2014].

CHALLENGES AND OPPORTUNITIES 15

and sensitisation campaigns such as rights awareness campaigns
(Devereux and Sabates-Wheeler, 2004: 9). It systematically
promotes interventions aimed at creating changes in policies that
cause and exacerbate power imbalances in society and, therefore,
create and sustain inequality and vulnerability.

b) Social Protection Life Cycle approach

This model guides in the analysis of risk and vulnerability across
the life cycle. In this way, it informs the design of social protection
mechanisms in such a manner that it ‘increase[s] their effectiveness
for tackling social exclusion and breaking the inter-generational cycle
of poverty’ (Cain,2009:3). This model identifies different life-cycle
stages, associated risks and vulnerabilities that if not addressed,
make one’s graduation to an acceptable state of well-being highly
unlikely. These are summarised in the Table 4 below.

Age stage Examples of risks and vulnerabilities

• Poor maternal and early nutrition leading to

stunted growth and other lifelong negative
health impacts
• Poor cognitive development if early care
and stimulation inadequate, with lifelong
impact
• Acute vulnerability to disease and infection/
Early years poor access to health services
0-4
• Exposure to hazardous environments
relating to poor housing and/or parents’
work
• High dependency: risk from loss of parent/
career
• Disability through lack of early intervention
• Neglect and discrimination against girls

16 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 • Risk of not attending school because of
domestic or income-earning responsibilities
or lack of household income to pay for
school-related costs

• Inability to benefit from schooling because

of added burden of domestic or income-
earning responsibilities

Children 5-11 • Particular issues for girls: Not prioritised

for investment in education/domestic
responsibilities/vulnerability to sexual
exploitation when attending school

• Insufficient food or poor diets increasing

likelihood of illness

• Dependency: risk from loss of parent/

career

• Vulnerability of (especially girl) children to

early withdrawal from school due to lack of
parents/family income

• Impact of triple burden of work, unpaid

care and schooling

• Risks from early marriage and child-bearing

Adolescents
12-24 • Lack of access to training/formal
employment, leading to entry into high risk
employment categories

• Increased risk of HIV/AIDS infection as

individuals become sexually active

• Increasing vulnerability of girls due to

gender-based violence

CHALLENGES AND OPPORTUNITIES 17

 • Lack of access to credit/asset-building
opportunities

• Lack of employment or further training/

development
Young adults
mid-20s/30s • Loss of employment/reduced income-
earning potential for women through
pregnancy and child care

• Reduced household income relating to HIV/

AIDS prevalence, and other illnesses

• Loss of employment or employment

insecurity through care for younger and
older family members (particularly women)

• Loss of partner’s support through temporary

Middle adults1 or cyclical migration as well as death,
illness, abandonment, leading to increased
responsibility for dependents

• Acquired disability through hazardous

employment or other practices

18 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 • Loss of income when work is lost owing to
age discrimination, frailty/illness etc.

• Work in informal sector throughout life

means that there is no contributory pension
provision

• Poor health in later life due to poor

nutrition, multiple childbirth, poor working
environment and lack of health care in
earlier years

• Continuing to work to support self and

dependents in low-income and often
Older people2 physically disabling jobs

• Discrimination against widows/lack of

inheritance rights for women

• Widow’s loss of access to late husband’s

family resources

• Increased child-care responsibilities where

middle-age adults have been lost to HIV/
AIDS, leaving dependent children in the
care of grandparents

• Increased likelihood of age-related

disability and chronic illness

Source: Cain, 2009: Social protection and vulnerability, risk and

exclusion across the life cycle

1.5.1. Conceptual debates in social protection policy and

programming
Notwithstanding the merits of these theoretical underpinnings of social
protection, several conceptual issues have been noted by a number
of scholars that are influencing ensuing debates in social protection
policy and programming. Devereux and Sabates (2007:1-7) have
done a comprehensive synthesis of the key challenges encapsulated
in their editorial in the IDS Bulletin, Volume 38, Number 3, May
2007. In this editorial, they note that most of the frameworks tend
to conceptualise social protection as a ‘response to the economic

CHALLENGES AND OPPORTUNITIES 19

and social vulnerabilities that poor people face, yet none of these
frameworks seems up to the task of comprehensively describing
the risk environment and proposing a focused and appropriate set
of policy options to mitigate or reduce vulnerabilities’. The authors
observe that a fundamental distinction has emerged between
conceptual approaches that incorporate structural vulnerability
in their understanding of the risk environment, and make social
inclusion an explicit objective of social protection programming,
and those that do not. The question then is: How can we ensure
that we create space for dialogue between protagonists for these
two approaches? This is particularly important, in the context of
developing countries in sub-Saharan Africa, which present a complex
reality for social protection policy and programming decisions.
Could it be that the boundaries between these two approaches are
actually porous borders, areas for mutual exchange and growth
rather than areas of separation? How best can these two approaches
complement each other?

These scholars further argue that the social protection agenda

appears to be equally open to contestation by the ‘right’ (who are
now inviting the poor to participate in economic growth opportunities
with revitalisng injections of targeted transfers) and the ‘left’
(who are hooking their ‘rights-based approaches’ onto the social
protection bandwagon). It is further argued that there is a growing
trend towards the social protection agenda prioritising ‘moving
people from dependency into productive livelihoods’. This in itself
reflects a paradigm shift from the narrow set of purely welfarist
measures, which are just a part of the social protection theory and
practice (Devereux and Sabates-Wheeler, 2007: 1).

Devereux and Sabates-Wheeler categorise arguments/protagonists

of social protection into two relatively broad groups – the
‘instrumentalists’ and the ‘activists’. Generally, ‘instrumentalist’
arguments tend to focus on pointing out the dysfunctionality of
extreme poverty, inequality, risk and vulnerability with regard to
the achievement of development targets that are embodied in the
MDGs. For this group (e.g. the World Bank, International Labour
Organisation) ‘social protection for efficient development’ is largely
about putting in place risk management mechanisms that will
compensate for incomplete or missing insurance (and other) markets.
They argue that this should be done until conditions are suitable for

20 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

poverty reduction and market deepening to allow private insurance
to take centre stage. The assumption is that these conditions are
likely to occur at a time when the country is maintaining a high rate
of economic growth and then safety nets are created for those who
cannot cope or who have not been able to benefit from the trickling
down of the benefits of economic growth. Conversely, ‘activists’ tend
to argue that the persistence of extreme poverty, inequality and
vulnerability is a symptom of social injustice and structural inequity.
Therefore social protection is constructed as a right akin to Amatya
Sen’s entitlement and capability approach. Amartya Sen has been
at the helm of addressing and raising questions of social justice,
especially with respect to gender and poverty. Against the dominant
emphasis on economic growth as an indicator of a nation’s quality of
life, Sen has insisted on the importance of capabilities, what people
are actually able to do and to be. Using the concept of entitlements,
Sen describes formal and informal entitlements. He argues that
identity (femininity and masculinity) determines entitlements to and
use of the factors of production. For example, women and poor men
always sit on the fringes (their voices are not heard because they are
less privileged/less entitled) and ability to use their labour in terms
of entitlements (men can easily use their labour, i.e. hire it out than
women) because of societal entitlements. The capability approach
is premised on the notion of capabilities which refer to effective
opportunities to be and do, and functionings – actual beings and
doings (Sen, 1999; Nussbaum, 2000).

From Sen’s perspective, poverty is conceived as a multi-dimensional

phenomenon characterised by low income, low quality of life, and
the denial of choices and opportunities for a tolerable life. This is
what Amartya Sen (Development as Freedom, 1999) and later
Martha Nussbaum (Women and Human Development, 2000) refer
to as capability deprivation. In this context, poverty reduction or
vulnerability and risk reduction are conceived of as the expansion of
human well-being and agency – capability expansion. The concept
of agency is in line with the philosophy that individuals are subjects
rather than objects through demonstrating that individuals act and
manoeuvre in the world, make strategies and reflect in spite of the
frames, and perhaps the limitations, set by structures of societies
(Samuelson and Steffen, 2004; Bukuluki, 2010).

CHALLENGES AND OPPORTUNITIES 21

For this group (activists), entitlement to social protection is conceived
of as extending beyond cash or food transfers to embody the notion
of citizenship, rather than philanthropy or even enlightened self-
interest (Devereux and Sabates-Wheeler, 2007: 2).The question
again is: Where is the bridge between instrumentalists and
activists? How can we use the experiences of people that reflect
hybridity and pluralism to avoid getting into some kind of identity
politics of ‘we and they’? For example, are the boundaries between
instrumentalists and activists meeting points and opportunities for
exchange rather than areas of separation?

The review of evidence on social protection has also generated some

gaps, particularly regarding what works. One of the fascinating
debates with respect to evidence-informed interventions is the
‘cash vs. food’ debate (some think that food in kind is better
than cash, especially in humanitarian assistance/relief settings,
while others argue that cash is the best because it grants people
more freedom and choice). Drawing from the emerging evidence
from the Overseas Development Institute (ODI) and World Food
Programme, Devereux and Sabates rightly argue that it is important
to base policy choices on a sound analysis of the context, especially
while paying attention to local market dynamics and the expressed
preferences of the heterogeneous nature of beneficiaries (including
age, gender and other important cultural variables), rather than ‘on
resource availability or an untested belief that one form of transfer
(food vs. cash) is always best’ (see Devereux and Sabates-Wheeler,
2007: 5). Similar arguments have been raised in the debates
on conditionalities in social protection policy and programming
discourses. The main argument is that there is need to take into
account the overall context, especially with regard to the ‘quality
and availability of local services on which transfers are conditioned’
and also to ‘assess much more carefully the implications for women’
(ibid.).

Another challenge relates to the evidence on the notion of ‘asset

thresholds’. The premise of ‘asset thresholds’ is that ‘a critical
level of assets exists above which people can invest productively,
accumulate and advance, but below which people are in a “poverty
trap” from which they have no prospects of escape’. With respect to
these assertions, scholars such as Michael Carter and Christopher
Barrett argue that it is critical to reflect on the implications of such

22 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

arguments for social protection policy and programming. They
argue that, for instance, humanitarian assistance that maintains
subsistence consumption does not prevent asset depletion and is
likely to push increasing numbers of people into chronic poverty
and a ‘relief trap’ (Michael Carter and Christopher Barrett cited in
Devereux and Sabates, 2007: 5-6).

The other conceptual challenge relates to the definition and

conceptualisation of some of the key concepts in social protection,
especially the concept of ‘vulnerability’. It is argued that vulnerability
is a defining concept that ‘motivates all social protection, but one
that is often inadequately understood and weakly carried through
into policy design and implementation’ (ibid.). Edström argues for
the need to disaggregate vulnerability into ‘embodied and personal
biological and psychological dimensions of susceptibility/resistance
and sensitivity/responsiveness, with contextual inter-personal
and environmental dimensions’ (see Devereux and Sabates-
Wheeler, 2007: 6). Questions have also been raised regarding
what should constitute the unit of analysis in social protection
policy and programming; for example, Edström (cited in Devereux
and Sabates-Wheeler, 2007: 6) questions the usefulness of the
household as a unit of analysis and response. He argues that this
may be inappropriate, given that ‘so much social protection is a
response to the breakdown of families (e.g. street children) and
access to (or exclusion from) support from extended families and
communities is a critical determinant of individual vulnerability or
resilience’. In the Ugandan context, this becomes an interesting
policy and programming issue, given that most of our households
and families in the rural areas and, to a considerable extent, those
in urban areas are characterised by collectivism and have relatively
strong ties with the extended family. As argued by Susan Whyte,
in her ethnography on the Nyole of eastern Uganda, ‘kinship is like
your buttocks…you can’t cut it off …relations to various kinds of kin
are part of your identity just as your buttocks, for better or worse,
are part of yourself’ (Whyte, 1997: 156). Even with urbanisation,
values of kinship have persisted and remained resilient in the
population. Thus the unit of analysis for social protection has to
mirror the family context in Uganda, which is largely intertwined
with collectivism.

CHALLENGES AND OPPORTUNITIES 23

The other very important concern raised in the literature relates to
the drivers7 of social protection policy and the programming agenda.
The main argument here is that much of the current social protection
agenda is not only designed but is also largely financed by external
actors (e.g. DFID, the World Bank, the World Food Programme,
UNICEF, EU etc.) and rarely driven by domestic constituencies –
national governments, local civil society and the citizens. This
inevitably has profound implications for ‘the ownership of these
processes, accountability for delivery and impacts, and political and
financial sustainability of social protection programmes’ (Devereux
and Sabates-Wheeler, 2007: 6). There is a concern for limited or
lack of nationally owned social protection policies, underpinned
by a ‘social contract’ between the state and its citizens, where
governments acknowledge that social protection is a right for which
they are the duty-bearers, and citizens mobilise to demand that this
right is effectively delivered to them (ibid.: 6).

1.5.2. Transformative social protection framework and

social protection in Uganda
It can be observed that the definition of social protection in Uganda’s
context by the MGLSD draws on the transformative social protection
framework developed by Devereux and Sabates-Wheeler (2004),
which recognises the need for social equity as well as protection
against livelihood risks. According to Devereux and Sabates-
Wheeler (2004), there is need for social protection as a set of public
and private initiatives8, both formal and informal, that provides
relief to extremely poor individuals to cope with risks and shocks as
well as enabling them to access basic social services through social
assistance programmes (direct income support or social transfers).
Social insurance, on the other hand, protects people against risks
and the consequences of livelihood shocks, whereas social care
services play a protective role through ensuring a minimum level
of care and protection for those at risk of abuse and neglect.
Lastly, complementary programmes play a transformative role of
7 Most drivers of non-contributory schemes like cash transfers and public works,
conditional and unconditional transfers have been external donors, including
the World Bank, DFID, UNICEF, ILO, the European Union etc. These draw from
experiences in their own countries and the values they hold about social protection.
They also draw, in some cases, on evidence of what has worked well to address
vulnerability in similar settings.

8 Private initiatives may include private health insurance, school fees insurance, and
community health insurance schemes that are community-owned.

24 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

supporting access to services for poor and vulnerable individuals
and households.

The authors will only focus on social security systems, including

direct income support or social transfers and social insurance
schemes, as one of the pillars of social protection in Uganda.

CHALLENGES AND OPPORTUNITIES 25

2.0. Global Perspective on Social
Security Systems
Social security has been widely recognised in numerous international
legal instruments, such as the Declaration of Philadelphia (1944) and
the Universal Declaration of Human Rights (1948), as a fundamental
human right. However, it remains unfulfilled for the majority of the
world’s population despite the impressive extent of coverage over
the past century (ILO, 2014; Cichon and Hagemejer, 2007; ILO,
2010).

In 2012, the ILO estimated that only 27% of the working age
population and their families across the world had access to
comprehensive social security systems compared to almost three-
quarters (73% or 5.2 billion people) of the world population who
lacked access to comprehensive social security. The ILO report
(2014) notes that half of the population in both middle- and low-
income countries is not sufficiently protected and live in poverty.
In addition, 800 million people are the working poor, of whom the
majority are in the informal sector. The report indicates that lack
of access to social security by such a large population is a major
obstacle to economic and social development. This is so because
limited or lack of social security coverage is associated with high
and persistent levels of poverty and economic insecurity, growing
inequality levels, inadequate investments in human capital and
weak aggregate demand in a time of recession and slow economic
growth.

The World Social Protection Report 2014/15 indicates that about

one-third of the total non-health public social security expenditure,
amounting to 2.3 % of the GDP, is spent on benefits for those of
working age. This includes unemployment benefits, employment
injury benefits, disability benefits and general social assistance.
However, there are significant regional variations, with less than
0.5% in Africa, 1.5% in Asia and Pacific, and 5.9% in Western
European countries (ILO, 2014).

Social security systems that have been widely established globally

vary greatly in their design characteristics. This section of the
paper will highlight the varying features and the evolution of social

26 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

security systems within developed and developing countries. The
ILO categorised countries into four typologies.

2.1. Industrialised Countries

Modern social security systems in industrialised market countries
have evolved over a long period of time. Social welfare was provided
mainly by the family, church authorities and local communities before
the state-sponsored social insurance schemes that emerged largely
in the 19th century as a consequence of European urbanisation
and industrialisation in developed countries. The state assumed a
residual responsibility in most of the countries for the relief of the
deserving poor (orphans, the disabled and widows). The current
social security systems in these countries are a result of interactions
between economic, political and social forces (ILO, 2012).

The social security schemes established in the 19th century were

designed to protect workers against labour market risks such as
unemployment, work-related injury and retirement. In addition,
private charities and state-administered social welfare schemes
provided complementary protection for vulnerable citizens (e.g.
people with disability, orphans) who were unable to work and
lacked other means of support (Institute of Development Studies,
2006). For example, in Germany during the era of Chancellor Otto
von Bismarck in the second half of the 19th century, workers faced
extremely difficult and dangerous working conditions, increasing the
risk of diseases and work-related injuries as result of the industrial
revolution. In response, Bismarck established a social welfare
system through three basic laws – the 1883 health insurance
law, the 1884 work-related accidents law and the 1889 disability-
retirement insurance law. It is further reported that several
European countries – France, Austria, Belgium, Italy, Luxembourg,
the Netherlands, Norway, Portugal and Spain - modelled their social
security systems on the Bismarckian approach (Nicoletta, 2014;
Stolleis, 2013; Adecri, 2008). In addition, social security schemes
developed further after the First World War and were specifically
designed to meet social contingencies, to redistribute wealth and
consumption in favour of lower-income earners. The social security
schemes expanded to include the great majority of workers and
retired people in industrial countries after the Second World War
(ILO, 2012). Prasad and Gerecke (2010), citing Skocpol (2002)

CHALLENGES AND OPPORTUNITIES 27

and Bordo et al. (1998), indicate that the economic depression of
the 1930s in the United States marked the 1935 passage of the
US Social Security Act (SSA), which is considered to be one of the
‘finest social policy’ legacies of the era. In addition, government
spending increased considerably as a result of increased old age
pensions, welfare and unemployment insurance ushered in by
the SSA, in addition to public works. The schemes became more
comprehensive and generous and offered social security against
poverty, unemployment, sickness and injury, and providing health
care, maternity benefits, family allowances, housing subsidies and
old age pensions (ILO, 2012; Prasad and Gerecke, 2010).

The high per capita incomes and adequate capacity to extract

financial resources through taxation underpinned the social security
systems, which were built on an employment structure with the
majority of wage employee workers. Despite the fact that the
majority of social security systems in industrialised countries share
some common features, there is significant diversity with regard to
the scope of coverage, the protected people, the level of benefits
and the financial and institutional mechanisms (ILO, 2012).

Esping-Andersen (1990), cited in an ILO report on social security

priorities and patterns, categorised the social security systems in
industrialised countries into three typologies: The liberal welfare
system (exemplified by countries such as the United States,
Australia, Japan, Switerzerland and Canada), the corporatist model
(Austria, France, Italy, Belgium and Germany) and the social
democratic system developed by Scandinavian countries (Norway,
Sweden, Denmark, Finland and the Netherlands). The liberal welfare
system emphasises means-tested assistance, modest universal
transfers or modest social insurance plans. The corporatist model
considers class and status in access to social security benefits and
is influenced by family and church traditions. Hicks and Kenworthy
(2002) indicate that the characteristics of the corporatist or
conservative model is characterised by not only occupational and
status-based differentiations of social insurance programmes and
specialised income security programmes for civil servants but also
generous and long-lasting unemployment benefits, reliance on
employer-heavy social insurance tax burdens, and extensions of
union collective bargaining coverage. The social democratic model
seeks to achieve equality of highest standards, not of minimal

28 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

needs, and to maximise individual independence. However, most
countries combine elements of the different models and the past
two decades have seen a tendency towards the dilution of some
contrasting elements (ibid.).

The industrialised countries have relatively high per capita incomes

and most of their labour force is in employment compared to other
categories of countries. The public social security expenditure forms
a relatively high proportion of GDP. However, there are significant
variations among the different countries. For example, France,
Germany and the Scandinavian countries allocate more than 28%
of their GDP to public social expenditure. Julien Bechtel and Michel
Duee, cited by Adecri (2008), indicate that in total value of benefits
paid by social protection schemes in France amounted to €505.5
billion in 2005, which represents 29.6% of GDP. Other countries
such as Portugal, New Zealand, Ireland, Canada, Australia, the
United States and Japan spend less than 20%. The proportions in
Australia, Japan and the United States are about half (30%) those in
Sweden, Denmark and Finland9 (ibid.). Furthermore, financing social
security in these countries takes significantly different approaches,
through social insurance or general tax revenue. In most countries,
social insurance is used to finance pensions, unemployment and
sickness benefits, whereas countries such as Australia and New
Zealand finance social security schemes through general taxation.
Other social security schemes, such as family allowances and social
assistance targeting poor and vulnerable groups, are financed
through general tax revenues (ibid.).

2.2. Communist Countries

Social security provisions in communist countries (such as Poland,
Romania, the Czech Republic, Romania, Moldova and Georgia) were
characterised by fairly comprehensive, universal and egalitarian
benefits at relatively low-income levels as a result of the state
owning nearly all the productive assets. The state was also free to
dispose of the output between accumulation, wages, social security
and welfare. These countries relied more on indirect measures of
social security and consumption redistribution than the market
9 http://www.scb.se/en_/Finding-statistics/Statistics-by-subject-area/National-
Accounts/National-Accounts/Social-protection-expenditure-and-receipts-in-
Sweden-and-Europe-ESSPROS/Aktuell-Pong/58116/Behallare-for-Press/372735/
[Accessed on 5 December 2014]

CHALLENGES AND OPPORTUNITIES 29

economies where the governments subsidised a variety of services
and items of mass consumption, and fixed relatively high prices for
non-essentials. In the 1940s, the social security systems in Eastern
and Central Europe resembled those of Western Europe prior to the
communist takeover (ILO, 2012). The schemes were based on the
concept of social insurance though their coverage was incomplete
and fragmented into different occupational groups. These countries
developed a distinctive system of social security characterised by
universality, equality and comprehensiveness after the communist
revolution. The social security systems in these countries were
closer to the social democratic typology. The schemes were financed
through state and enterprise revenues. In the late 1980s, after the
downfall of the communist regimes, the social security systems
in these countries collapsed. They exerted some influence on the
developing socialist countries and also on some other low-income
countries (ibid.).

2.3. Transitional Countries

In the early 1990s, after the end of the communist era, transitional
countries (such as Poland, the Czech Republic, Romania, Bulgaria,
among others) experienced rising poverty, unemployment and
a difficult environment of falling production and incomes, which
compelled them to restructure their social security systems (ILO,
2012; Hirose Kenichi, 2011). The public financing of pensions,
and maternity, sickness and invalidity benefits has been replaced
by separate insurance funds with contributions by enterprises
and employees in most Central and Eastern European countries.
Unemployment benefits, which were practically non-existent under
the previous system, are also being financed from the state budget
or through social insurance contributions. There have also been
efforts to enhance the role of the private sector in health, education
and pensions. In addition, the early years of transition, marked by a
rapid increase in poverty, led to the expansion of targeted, means-
tested social assistance schemes. A significant minority of the
working population in many of the transitional countries fall outside
the social security framework because of the restricted entitlement
to unemployment, sickness and pension benefits and the expanding
informal sector economy. These countries also have relatively low
per capita incomes in spite of a high proportion of their labour force

30 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

being wage employees. The social security expenditures constitute
a relatively high proportion of GDP although the situation varies
between different groups of transition countries. For example, the
Baltic and the Central European states10, on the one hand, and
the East11 and South East European states12, on the other, while
conditions are much worse in the Caucasian and Asian states. The
social security systems that emerged in the transitional countries
incorporated elements of the continental and liberal welfare models.
Most of the explicit or implicit subsidies were eliminated after the
collapse of the communist regimes. Public services such as education
and health care continue to be provided free by the government in
most countries, though the share of the private sector has risen.
In the Czech Republic, Hungary and Slovenia, health care is being
financed through insurance contributions (ILO, 2002).

2.4. Developing Countries

Developing countries have extremely diverse social security
systems, which reflect the differences in the underlying economic,
social and political conditions. Before the adoption of modern social
security schemes, people in the developing countries depended
on their families, communities, religious authorities, employers
and money-lenders to help them in an emergency. The majority of
people had some independent means of production, which provided
a measure of livelihood security. The modern social security systems
were introduced by colonial governments in most Asian, African
and Caribbean countries. These schemes were extended in the first
instance to civil servants and employees of large enterprises and
provided benefits such as health care, maternity leave, disability
allowances and pensions (Midgley, 1984; Ouma, 1995; Barya, 2011;
Kasente et al., 2002).

Despite the fact that many developing countries have attempted to

cover the main social security needs of their people through some
broad-based growth, institutional reform and purposeful use of
10 Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland,
Romania, Slovakia, Slovenia, Turkey

11 Belarus, Bulgaria, Moldova, Poland, Romania, Slovakia, the Ukraine and the
westernmost part of the Russian Federation

12 Albania, Bosina and Herzegovina, Bulgaria, Croatia, Cyprus, Kosovo, Macedonia,

Malta, Montenegro, Serbia, and Turkey

CHALLENGES AND OPPORTUNITIES 31

resources, a large proportion of the population remains unprotected
and lack access to social security (ILO, 2012). Social security
systems in most developing countries adopted from industrial
countries target a small minority of the population. Developing
countries such as those in Latin American – Argentina, Brazil, Chile,
Cuba and Uruguay that had been independent for a longer period –
adopted European social security system elements during the inter-
war period. These countries adopted the social insurance method
with coverage for health care, occupational injury and pensions.
Other countries such as Colombia, Costa Rica, Mexico, Paraguay,
Peru and Venezuela followed suit soon after the Second World War.
These social security systems had certain similar features, including
the contingencies covered usually being limited to injury, sickness,
maternity and pensions. However, there were also significant
differences among the occupations, categories of employees and
institutions, and limited coverage of the population. There was
extremely limited coverage of certain social security schemes, such
as unemployment benefits, family allowances and social assistance
that existed in relatively few countries (ibid.).

Developing countries with a higher per capita income and a larger

proportion of the working population in formal sector employment
tended to have more extensive social security expenditure.
The central priority in most of the countries is to meet essential
needs, including primary health care, basic education, clean water,
nutrition, sanitation and shelter. The priority is given to meeting the
minimum subsistence needs of vulnerable groups such as the elderly,
widows, orphans and the destitute. Most developing countries face
a problem of political marginalisation of the destitute and a lack of
administrative and technical capacity on the part of the government
to formulate strategies and programmes, and to coordinate and
monitor the implementation of social security systems (ILO, 2012;
ILO, 2014).

In recent years, several middle-income countries, such as Argentina,

Brazil, China, Indonesia, India, Mexico, Namibia, South Africa and
Thailand, have significantly extended various elements of their social
security systems, particularly since the early 2000s. However, these
efforts were temporarily disrupted in some parts of the world by the
global financial and economic crisis (2007-2008). Some countries
rebounded after 2010 in terms of economic growth, but still saw an

32 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

increase in vulnerable and informal employment and their economic
positions remain dependent on the recovery of global demand.
Several developing countries which recently graduated from least
developed country status, such as Cape Verde, Ghana, Lesotho and
Zambia, have implemented distinct social security policies aiming at
gradually increasing social security coverage to include larger groups
of the population. There have been many reforms with a focus on
non-contributory social security schemes and programmes, such as
conditional or unconditional cash transfers for children and families,
social pensions, and/or employment guarantee schemes. Many
countries have also rendered their social insurance programmes
more equitable, more effective and more sustainable despite the
fact that many are still struggling to cover the informal sector. In
addition, middle-income countries have significantly increased their
financial resource allocation for social security (ILO, 2014).

However, low-income countries face stronger constraints in

extending social security coverage then middle- and high-income
countries. They face higher levels of poverty and destitution that
have to be addressed with fewer financial resources, through the
weaker institutional capacities and within often fragile contexts.
In recent years, a number of low-income countries have extended
social security systems in various areas. For example, Rwanda has
reformed its health-care system, and Bangladesh, Kenya, Malawi,
Nepal, Mozambique, Niger, among other countries, have introduced
conditional cash transfer programmes. Although the coverage of
these programmes is still limited in coverage and target, they have
generated significant effects in reducing poverty and vulnerability
and improving living standards. Many low-income countries have
also significantly increased the share of GDP that they invest in
social security systems (ibid.).

CHALLENGES AND OPPORTUNITIES 33

3.0. The Evolution of Social Security
Systems in Uganda

3.1. Pre-colonial Period

Social security has evolved over time in Uganda, like in most of
sub-Saharan Africa; it is firmly rooted in the country’s institutions
and traditions. In the pre-colonial period, Africans lived in mutual
support networks of community, extended family and clan groups.
Social security was embedded within the cultural norms as a form
of solidarity and assistance to people within clans and communities,
who were unable to take care of themselves. These normally
included orphans and vulnerable children, widows, older persons,
persons with disability, and the terminally ill (Ssanyu et al., 2013;
Lwanga-Ntale, Namuddu and Onapa, 2008; Ouma, 1995; Devereux
and Sabates-Wheeler, 2004).

Everybody knew each of their neighbours sufficiently and intimately

in society. Clan organisation and authority were reinforced by the
system of extended families in ensuring area-based development
through the exercise of collective responsibility in such areas as
housing, creating and maintaining access roads, farming, food
harvesting and its storage, hunting down wild animals and destroying
vermin that were a potential danger to both human security and food
crops, caring for the elderly sick, consoling and assisting the clan
(Ouma, 1995). Family members in bereavement relied on mutual-
aid assistance and reciprocity. In the circumstances, these acts of
reciprocity, atrium, social cohesion and personal intimacies were
sufficient to guarantee social protection in both good and bad times
to all members of any ethnic community by ensuring equity and
social justice. Social security resulted in extensive local commitment
to culture and tradition and indeed area-based development (Ouma,
1995). Some of the traditional social organisations through which
social security was delivered included Bulungi Bwa Nsi (‘For the good
of the country), which represented the tradition of voluntary work
on public projects and Muno Mu Kabi (‘Friend in need’) representing
the tradition of mutual assistance (ibid.). These community-based
and mutual support networks pooled resources to respond to
emergencies in times of death, sickness and celebrations. In cases
of death, community members contributed food, their labour and
cash for funeral expenses (Synovate Limited, 2011).
34 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA
In most of northern Uganda (particularly the Lango and Acholi sub-
regions), in addition to mechanisms that guaranteed access to food,
clothing and shelter, social security mechanisms were also formed
around labour with cooperative work groups (locally known as wang
tic, awak, akiba) to open up fields, weed and maintain land for
production (De Connick and Drani, 2009).

In general terms, traditional and pre-colonial social security

systems in East Africa, Uganda inclusive, depended upon the social
structure of a particular community. The structure was defined by,
for instance, whether the members of the community were settled
agriculturalists or pastoralists or, as stated above, whether they
were organised in a state – such as the Buganda and Bunyoro Kitara
kingdoms – or whether they were stateless – such as the Bakiga and
Acholi (Barya, 2009). There were no formal social security systems,
but society relied on the traditional family and kinship relationships
to deal with issues of social protection (Barya, 2011). However,
the post-independence political turbulence and state violence of
the 1970s and early 1980s, and the scourge of HIV/AIDS, have
been reported as key factors in weakening the traditional social
security mechanisms, not only owing to the death or displacement
of individuals, families and entire communities, but also because of
the stress and strain which the pandemic has imposed on surviving
individuals and households (Lwanga-Ntale, Namuddu and Onapa,
2008; Ouma, 1995).

While the traditional social security mechanisms have been weakened

and diminished in terms of effectiveness, they nonetheless still exist
in societies, especially the rural areas, in Uganda. Similarly, in spite
of the challenges these mechanisms face, and the extent of their
‘stretch’ notwithstanding, traditional social security mechanisms
remain the main form of support, especially in the countryside.
It is also reported that the modern social security mechanisms
have supplemented the efforts of the traditional social security
mechanisms (Lwanga-Ntale, Namuddu and Onapa, 2008; Connick
and Drani, 2009; Msalangi, 1998; Devereux and Sabates-Wheeler,
2004; Kasente et al., 2002).

The traditional social security systems have also undergone changes

that have seen them either modify the manner in which they cushion
the poor from shocks, weaken this support or cease to exist altogether.

CHALLENGES AND OPPORTUNITIES 35

This has happened especially in areas that have been affected by
conflict, so that both traditional and solidarity mechanisms have
either been severely disrupted or have disappeared. These changes
have also entailed evolving and redefined membership. This has in
turn increased exclusion of the very poor: people who fall ‘below’
the poor peasant group are locked out by some of the mechanisms
that previously accommodated and provided for them (Connick and
Drani., 2009).

3.2. Colonial Period (1894 - 1962)

Formal social security schemes were introduced in Uganda during the
colonial era as a response to the social security needs of expatriate
workers. Social security and social protection were conceived and
laws were made in consonance with the interests and objectives
of colonisation and colonial policy. One of the hallmarks of colonial
labour policy was to have cheap labour. In Uganda forced paid
labour (kasanvu) was used up to 1923, when it became costly and
unsustainable. Not only were wages arbitrarily fixed but, in the case
of Uganda, they were kept low due to the abundant supply of migrant
labour, especially from Rwanda, Burundi and the Belgian Congo
– the current Democratic Republic of Congo (Barya, 2011)). The
result was that because of low wages, administrators were prepared
to use force to obtain African labour for public works and also for
private employers. The wages paid were not enough to maintain
a worker and his dependants and, in fact, could hardly sustain a
worker himself, so that many looked to the subsistence sector to
provide their food. The British colonialists provided social security
essentially for the white settler community, and this excluded the
Africans from accessing social security (ibid.).

The Africans depended on the family, clan members and members

of the community for assistance (Kasente et al., 2002). Therefore,
the majority of the African population was not affected by the social
security systems put in place by the colonialists. The colonial state
assumed that Africans would take care of their own social security.
It is further reported that the colonial economy extracted labour
and raw materials from the people and society generally without
any significant reciprocal benefits for the Africans (Barya, 2011).
The colonial state had been set up to serve the interests of the
colonisers and, as a result, social security for the Ugandans was not

36 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

at the forefront of colonial state concerns. The formal social security
systems put in place were indeed initially meant only for the (white)
settler community or colonial officials and employees (ibid.).

The coming of colonialists was reported to have weakened the

traditional social security systems that are met through family
system based on kinship relations, tribal or clan or village as whole.
The principle of communal responsibility and solidarity was eroded
by westernization and its attendant individualism. Urbanisation,
high mobility as well as European influence caused people to
gradually become more individualistic which eventually resulted into
weakening kinship relations. Urbanisation during the colonial era
separated family members who were detached from their traditional,
social and cultural settings (Msalangi, 1998; Barbone and Sanchez,
1999; Madukwe et al., 2009; Barya, 2009).

In addition, missionaries introduced hospitals and endeavoured to

cure the sick, established a system of care, and looked after the
elderly, the sick, orphans, blind people, and the disabled as well
as the handicapped in institutional care centres. The traditional
responsibilities and family obligations were beginning to weaken,
which left many community members helpless when religious
bodies and other private organisations could no longer cope with
the overwhelming responsibilities. This forced the British empire to
establish social welfare in its colonies (Msalangi, 1998).

In Uganda, social security covered Europeans, Asians and a few

Africans in certain types/levels of colonial government employment
(Barya, 2011). The British government established a public service
pension scheme in 1927 to cater for its employees in the Uganda
Protectorate (International Policy Centre for Inclusive Growth,
n.d.).13 The employees were covered by different legislation from
192114 for Europeans and for Asians from 192715 and for a few
African civil servants from 1929.16 The Government Employees
13 Seehttp://www.ipc-undp.org/publications/cct/africa/
NationalExperienceSocialTransferProgrammesUganda.pdf [Accessed on 20
November 2014]

14 The Asiatic Officers’ Pensions Ordinance 1935 (Cap. 8) and The European Widows’
and Orphans’ Ordinance No. 2/1921

15 The Asian Widows’ and Orphans’ Pension Ordinance No. 6/1927

16 The African Civil Servants Regulations 1929

CHALLENGES AND OPPORTUNITIES 37

Provident Fund Ordinance No. 1/194117 catered for some employees,
while the Provident Fund (African Local Governments) Ordinance
No. 38/195018 established a provident fund ‘for the benefit of
employees of such African Local Governments as may desire to
become contributors thereto and…for the control and management
thereof …’19 It was a provident fund for ‘non pensionable servants in
the service of local governments’ (Barya, 2011).20

The Armed Forces Pension Scheme is the oldest social security

scheme. It was first implemented in 1935 to provide social protection
to retired soldiers. Following the establishment of this scheme, a
number of other schemes were created, including the Public Sector
Pension Scheme, which was first established on 1 January 1946 to
provide retirement benefits to public servants (World Bank Economic
Outlook, June 2014). In 1946, the Department of Compensation,
originally known as the Pension Department, was created after the
enactment of the Pension Act (Ministry of Public Service, 2014).21 In
line with article 22 of the Universal Declaration of Human Rights22,
12 December 1948, the colonial government in Uganda formed a
social security department in the Ministry of Labour, which was the
precursor of the present National Social Security Fund.23

While pensions were introduced much earlier in Uganda, workers’

compensation followed almost immediately, being introduced in
1946. A requirement under the workmen’s compensation scheme
was and is for employers to protect themselves through a private or
public insurance against their liability to injured workers (Msalangi,
1998). In addition, it is reported that in 1953, the teachers fund
was introduced and all the money that had been collected under

17 Cap. 53, Laws of Uganda 1951

18 Cap. 75 Laws of Uganda 1951

19 Long Title, Cap. 75, Laws of Uganda, 1951

20 The Provident Fund (Local Government Act 1951). http://www.ulii.org/ug/

legislation/consolidated-act/287

21 See http://publicservice.go.ug/index.php/services/dept-compesation [Accessed

on 19 November 2014]

22 Every member of society, every human being has the right to social security

23 http://www.memoireonline.com/09/10/3894/m_Role-of-social-security-fund-
scheme-in-enhancing-the-socio-economic-development-of-Rwanda10.html

38 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

the provident fund was distributed to them. This was the period
when the teachers joined the non-contributory pension scheme
– the current public service pension scheme in Uganda targeting
all the civil servants. Initially the teachers had a different pension
arrangement through the provident fund, which was a contributory
scheme. They used to contribute to this fund and money would
later be distributed back as pension (International Policy Centre for
Inclusive Growth, n.d.).�

Msalangi (1998) points out that no social assistance scheme similar

to those existing in Europe were introduced in the British colonies
of Africa, including Uganda. There was, however, institutional care
covering very few people, which the British administration established
for the elderly, the physically disabled and the handicapped as well
as orphans. The system did not have any form of cash benefit.
Msalangi further reveals that such practice has been retained by
the governments in the post-independence era and in most cases
such countries’ provision of social assistance is made directly by the
ministries responsible for social welfare. Social assistance schemes
were not introduced in all British colonies and where they were, they
were not always implemented fully in the entire state. This tends to
suggest that, although the system of social assistance was and still
is the lifeblood of social security in Britain, it was not transplanted to
African countries. However, it will be seen later that the Government
of Uganda, with financial support from development partners, is
piloting a social assistance grant for empowerment in Uganda.

3.3. Post-independence Period (1962 to-

date)
The Government of Uganda continued with the social security
systems which were introduced before independence by the British
colonialists and modified them slightly in order to bring them into
line with the needs of the changing society. Therefore, the design
of Uganda’s current social security system was based on its colonial
history because immediately after independence the existing
social security systems were not altered. After independence most
African countries sought to extend coverage of their social security
systems beyond sectors that were covered by the schemes during
the colonial era. However, the coverage of these schemes is not

CHALLENGES AND OPPORTUNITIES 39

yet sufficient (Barya, 2009; ILO, n.d.). Uganda’s current pension
system is similar to those in most Anglophone countries in sub-
Saharan Africa (Nyakundi, 2009).

Barya (2011) points out that the social security regime that was
put in place in the three East African countries (Uganda, Kenya and
Rwanda) was fairly similar in structure, with only a few differences.
Barya goes ahead to reveal that during the first ten years of
independence (1961-1971), these countries had the following as
the main features of their social security systems:

1. The majority of the population, including the peasantry in

the rural areas, the self-employed, the unemployed and
those in the informal sector mainly in the urban areas, were
not covered and excluded.
2. A non-contributory defined benefit pension scheme for
permanent public servants, and other public officials was
put in place under some Pension Acts.
3. A provident fund, commonly known as NSSF, for private
sector employees and non-pensionable public servants was
a compulsory savings scheme based on earnings-related
contributions by workers (members) and their employers,
was put in place.
4. A range of other benefits (including workers’ compensation,
at times sick pay, maternity leave) were provided for under
an array of legislation, and in some cases severance pay,,
all provided directly by employers under specific legal
obligations (Workers’ Compensation Acts, Employment Acts
etc.), were also provided for.
In 1985, the Government of Uganda established the National
Social Security Fund (NSSF) to provide social security to private
sector workers. In addition, other voluntary schemes have been
established by a range of employers to provide retirement benefits
to their employees. At that time, the major complaints about both
the Public Sector Pension Scheme (PSPS) and NSSF were that they
were based on a very low wage base, while inflation between the
1970s and late 1980s had made both public service pension and
NSSF benefits practically meaningless. In the case of the NSSF,
workers complained that their savings were borrowed by government

40 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

companies and the Uganda People’s Congress (UPC) to build Uganda
House but the borrowed monies had not been repaid or paid without
interest. While some of these problems continue and others have
been ameliorated, new managerial and conceptual problems with
respect to both schemes persist (Barya, 2009). However, Barya
(2011) points out that the social security systems that obtained
until the mid-1980s and early 1990s in East African countries never
encountered major challenges and this could be explained partly by
the still existing informal or traditional social security mechanisms,
fairly easy access to land resources and the limited urbanisation
(ibid.).

From the above discussion, it can be concluded that formal social

security systems have been in place since colonialism and has
continued to increase in scope and coverage during the post-
independence era. These schemes include public service pension
schemes, the NSSF, and the Parliamentary Pension Scheme. These
are some of the examples of the formal social insurance schemes
covering public and private employees. There are also private
pension schemes that are developing in the private sector in Uganda
today as a result of economic liberalisation policies. However, most
of these schemes are targeting the limited number of the working
population in the formal sector, which excludes those in the informal
sector. The details of each of the schemes will be discussed in the
chapter analysing key social security systems in Uganda.

Structural Adjustment Programmes (SAPs)

and social security systems
Between the 1980s and 1990s, many other African countries were
exposed to strong forces of Structural Adjustment Policies (SAPs),
privatisation, the retrenchment of state workers and broad neo-
liberal economic policies which were intended to respond to economic
and social crises. The Government of Uganda implemented a range
of World Bank/International Monetary Fund (IMF) policies. These
included the privatisation of government institutions; reducing the
size of the civil service and the army; the liberalisation of foreign
exchange; the decentralisation of services to local authorities; and
cuts in government spending on social services.24 The Washington
24 See http://www.saprin.org/uganda/uganda_forum1.htm

CHALLENGES AND OPPORTUNITIES 41

consensus led by the American government and the Bretton Woods
institutions (the World Bank and the IMF) took centre stage during
that period in most of the countries. However, the role of the states
in their economy was challenged, in providing certain basic services
such as health, education, water and others (Barya, 2011).

Despite the fact that the SAPs were intended to create conditions
for achieving sustainable levels of economic growth, they had
implications for social security schemes. The transitory social costs
in the form of retrenching workers in both the private and public
sectors resulted in workers being withdrawn from the social security
schemes – a situation which reduced the revenue base of social
security schemes. One of the critical issues in the implementation
of SAPs was the reduction of the budget deficit achieved through,
among other things, a reduction in social sector spending (Kaseke,
2000). Furthermore, the devaluation of local currencies necessitated
by SAPs severely eroded the value of benefits in some countries,
such as Uganda (National Research Council (US) Committee on
Population, 2006; Ouma, 1995; ILO, 2001).

The end result of the SAPs in the 1980s and 1990s was not only
the intensification of foreign domination and exploitation of African
countries but also the undermining of the working class and all working
people (including the salaried middle class or petty bourgeoisie),
particularly through wage freezes and massive retrenchments from
the government and public enterprises. This led to unemployment
of all categories of workers through massive retrenchment in the
public and private sectors, privatisation, subsidy withdrawal, drastic
expenditure cuts, the destruction of small and indigenous capital
and import dumping. For example, some 350,000 people were
retrenched, which sharply exacerbated unemployment. In addition,
some of the laid off civil servants did not even receive severance
packages and even for those who received packages, they were
too small (Structural Adjustment Participatory Review International
Network, 1998).25 These processes further and directly impacted
on the welfare functions of the state, mainly education, health and
housing. SAPs also exacerbated social inequalities by redistributing
wealth in favour of the rich and powerful, caused unemployment
and made the poor poorer (Barya, 2011; ILO, 2001).

25 See http://www.saprin.org/uganda/uganda_forum1.htm

42 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Policy reforms that were undertaken in Uganda in the mid-1990s
including retrenching staff as part of the SAPs and consolidating as
well as monetising the pay and emoluments of the retained staff;
a revised benefit formula; the indexation of pension to salaries;
and the application of such indexation retrospectively to all wage
increases since 1988. The policy reforms led to a sharp increase in
the stock of pension liabilities (which became recognised in terms
of pension arrears) that resulted in the need for reforms. It can
be seen that the SAPs policy reforms in Uganda contributed to the
reforms of the Uganda Pension Sector which started in earnest in
the mid-1990s, with the amendment of the Pension Act 1978. This
was triggered by the erosion of the value of the pension, caused by
inflation during the 1970s and 1980s. The Pension (Amendment)
Statute No.4 of 1994 and the Statutory Instrument No.6 of 1995,
amended the Pension Act and the Regulations respectively. Pensions
were indexed to the salaries, allowing them to be raised whenever
the salaries of serving public officers are increased. The amendment
also provided for the payment of the survivors’ pension to the
spouses, children and dependants of the deceased public officers
and pensioners. This amendment was backdated to 1 July 1988
(Office of the President, 2013).

Other factors that contributed to the rise in the pension arrears

include the Pension Act amendments in 1978 which recognised the
services of persons who had served under the defunct East African
Community and the decision by the High Command of the Uganda
People’s Defence Forces (UPDF) to recognise the services of persons
who had served in the previous armies, from independence. As
a result of the above developments, the stock of pension arrears
increased to unsustainable levels and has greatly stressed the
government budget, which has necessitated the urgent need to
reform the Public Service Pension Scheme (PSPS). The consensus
for the reform of the PSPS gained momentum and strengthened in
the early 2000s (ibid.). The current pension reforms debates will be
discussed later in the chapter analysing key social security systems
in Uganda.

CHALLENGES AND OPPORTUNITIES 43

Transition from Structural Adjustment
Programmes (SAPs) to Poverty Reduction
Strategy Papers (PRSP)
In early 2000, the SAPs were replaced with Poverty Reduction Strategy
Papers (PRSPs), also imposed by the World Bank and the IMF as the
main development framework documents. In the case of Uganda,
the PRSP was the Poverty Eradication Action Plan (PEAP). The PRSPs
sought to achieve high levels of economic growth and higher levels
of development with a view to ‘reducing poverty’. However, social
protection was not recognised in these ‘development’ frameworks
as having a role to play in poverty reduction. Social protection was
not given priority or adequate coverage in the PRSPs (Barya, 2011).

In 1997 the PEAP was developed and launched with the main
purpose of addressing the key poverty challenges in Uganda. During
the process of its implementation, new challenges arose, such as
emerging differences in the implementation of the priority areas
among the local governments; non-consultation of the poor during
its development; and the placing of little emphasis on private sector
development. This led to its revision that resulted in a new PEAP
in 2000. The Poverty Eradication Action Plan (PEAP) was described
as ‘social protection-friendly’, given the fact that it suggested
interventions in health, education, water and sanitation, putting
social development as a priority action for reducing poverty and
vulnerability (DRT, 2006). The PEAP recognised social protection as
a cross-cutting issue to help address risks and vulnerabilities and to
prevent the poor and vulnerable from sinking into deeper poverty
(MFPED, 2004).

In 2002, the Ministry of Gender, Labour and Social Development

also addressed issues of social protection in the Social Development
Sector Investment Plan (SDSIP). This was followed by seeking
support from Department for International Development (DFID) to
design and fund a pilot cash transfer scheme in 2007. However, the
Ugandan cabinet refused to approve the pilot scheme until 2008/09
when the DFID review team proposed social pension and targeted
a vulnerable family grant which was later, in 2010, approved for
implementation as a pilot scheme by the cabinet (Barrett, 2013).

44 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Social security issues remained relatively less visible in Uganda until
the Ministry of Gender, Labour and Social Development set up a
Social Security and Pensions Sector Stakeholders Transition Group
(STG) in 2002. The mandate of the STG was to advise on necessary
reforms in the pension sector. In 2003, the STG produced a report
in which several recommendations were made, including reforming
the pension sector (Ministry of Public Service, 2012). This period
witnessed a growing interest by other government agencies such as
the Ministry of Finance, Planning and Economic Development, in the
social security issues. This was attested by the policy statements
in the 2007/8 and 2008/9 budgets, where the government sought
to effect some reforms in the social security sector. In 2007, in
order to implement some of the STG recommendations and also
to introduce some new elements, the Ministry of Finance, Planning
and Economic Development presented a paper to the cabinet on the
reform of the social security sector in Uganda. The discussions on
the pension sector have been around mismanagement, governance
and the inadequacies of the NSSF and the Public Service Pension
Scheme (Barya, 2011).

In 2004 the oversight of NSSF was transferred from the Ministry of

Gender, Labour and Social Development (MGLSD) to the Ministry
of Finance, Planning and Economic Development. The main reason
for the transfer was that the MGLSD did not possess the technical
capacity and experience to manage the enormous amounts of
money26 that the NSSF runs (The Independent magazine, 2010).
However, it can be seen that the transfer had little or nothing to do
with adequacy or coverage or equity, which are some of the main
challenges facing the pension sector.

26 As shall be later seen in the chapter on financing social security in Uganda

CHALLENGES AND OPPORTUNITIES 45

4.0. Institutional, Legal and Policy
Framework of Social Security
Systems in Uganda

4.1. Institutional Framework

There are a number of institutions in Uganda that are responsible
for social security management and provision.

The Ministry of Gender, Labour and Social Development (MGLSD),

through the Directorate of Social Protection, is the leading
institution in Uganda responsible for policy development and
implementation oversight of social protection programmes and
interventions (Rukundo, 2013). The ministry regulates the social
security sector in the country. Within the ministry, there is also the
Department of Labour, Industrial Relations and Productivity which
is responsible for labour relations functions such as handling of
individual labour complaints; labour inspection; dispute resolution;
administration of workers’ compensation; administrative support
to the labour advisory board; the Medical Arbitration Board; giving
support to employers and workers in the workplace on HIV/AIDS
programmes; advocacy for productivity improvement; and labour
migration. The Medical Arbitration Board within the Department
of Labour is responsible for resolving disputes in cases of workers’
compensation. It consists of four members (two physicians, one
surgeon and one occupational health expert). The board that is
centralised in Kampala holds meetings depending on the availability
of funds. On average, the board holds two to three meetings per
quarter and deals with 8-10 cases that have been referred by
labour officers in each meeting. However, many district cases are
not usually referred and, furthermore, the labour officers are not
aware of the existence of the board (ILO, 2011). The Department
of Labour was decentralised to local government level. There are
district labour officers who are responsible for the resolution of
individual labour disputes such as workers’ compensation. However,
the labour officers are not sufficiently trained, if at all, to conciliate
or mediate disputes and also a large number of cases are resolved
after the three-month period established by law has elapsed (ibid.).

46 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

The Ministry of Public Services is responsible for the administration
and management of the Public Service Pension Scheme through
the Department of Compensation. The department handles pension
schemes for the traditional public service, the teaching service,
defence and the former employees of the defunct East African
Community (EAC). The department falls under the Human Resource
Management headed by a Commissioner. This department handles
the pension scheme through receiving and approving pension
and gratuity applications; verifying and assessing pension and
gratuities; budgeting for pension and gratuities; and receiving and
maintaining pension records and data. The department, further,
answers pension-related inquiries and complaints and provides
technical support to other pension centres; monitors the pension
performance of the pension policies, programmes and procedures to
ensure that they meet desired objectives; and plans and executes
pension and retirement awareness programmes. The Ministry of
Public Service collaborates with the Ministry of Defence in matters
relating to pensions for military personnel (Ministry of Public Service,
2014; Nyakundi, 2009; MGLSD, 2014c; Ministry of Public Service,
2012; Office of the Auditor General, 2010).

The Ministry of Finance, Planning and Economic Development

(MFPED) mobilises, allocates and releases funds in the national
budget to finance social security in the social development and other
sectors. It also plays a lead role in the governance of public and
private pension schemes, including the fiscal arrangements for both
and appoints the board and management of the NSSF (Office of the
President, 2013; Office of the Auditor General, 2010).

The NSSF reports to the Minister of Finance, Planning and Economic

Development whereas the Central Bank of Uganda plays a more
oversight role. The Bank of Uganda was appointed by the Minister
of Finance as the interim regulator of the NSSF pending the
establishment of the Social Security and Pension Sector Regulator.
With effect from 1 January 2005, the Bank of Uganda was, therefore,
assigned the responsibilities of vetting and approving a new board
and executive management, reviewing and approving interest
rates payable to pensioners and also consenting to major long- and
medium-term investment decisions (BoU, 2005). The Minister of
Gender, Labour and Social Development (MGLSD) has the powers to

CHALLENGES AND OPPORTUNITIES 47

appoint a maximum of eight board members (two of whom represent
government, two from workers’ organisations, one from employers’
organisations and others being people with expertise in the area of
social security). The NSSF operates in 24 locations in the country
and carries out compliance inspections to make sure that private
sector employers are paying the necessary contributions to the fund.
The NSSF used to be under the authority of the MGLSD until 2006
when it became the responsibility of MFPED (ILO, 2011), when the
Minister of Finance, Planning and Economic Development appointed
a new NSSF Board of Directors. Their term of office was effective
from1 June 2012 for a period of three years. The board includes
the Permanent Secretaries of the Ministry of Finance, Planning and
Economic Development and the Ministry of Gender, Labour and
Social Development, a representative each from the Federation of
Uganda Employers (FUE) and the National Organisation of Trade
Unions (NOTU), the NSSF managing director, and a representative of
the Central Organisation of Free Trade Unions (COFTU).27 The NSSF
further operates under the regulatory framework of the Retirement
Benefit Regulator with the responsibility to regulate occupational
schemes in the country (ibid.).

The Uganda Retirement Benefits Regulatory Authority (URBRA)

is an independent authority whose mandate is to regulate the
establishment, management and operation of retirement benefit
schemes in both the private and public sectors and was created by
the URBRA Act 2011.28

The Ministry of Health is the overall agency responsible for health

provision in Uganda and is spearheading the introduction of the
National Health Insurance Scheme (NHIS) through drafting the
National Health Insurance Bill that proposes to extend contributory
health insurance to formal workers. In 2006, the Government of
Uganda asked the Ministry of Health to design a health insurance
scheme through Cabinet Minute No. 63 to the Ministry of Health.
The minister established a national task force on health insurance
with representation from all relevant stakeholders to spearhead the
drafting of the bill and design issues. The stakeholders included the
Ministry of Health, the Ministry of Finance, the Ministry of Gender,
27 http://www.nssfug.org/28/NSSF_Board

28 http://www.newvision.co.ug/news/647173-workers-to-benefit-from-pension-
reforms.html

48 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Labour and Social Development, the Ministry of Public Service, trade
unions and Federation of Uganda Employers.29 The National Health
Insurance Bill 2007 is currently with the Ministry of Finance, Planning
and Economic Development awaiting issuance of a certificate
of finance implications and requires civil servants and formally
employed Ugandans to make mandatory contributions to the NHIS.30
The details of the proposed National Health Insurance Scheme will
be discussed in the chapter analysing key social security systems
in Uganda. In addition to the above, voluntary or community-based
health insurance schemes have emerged in a number of regions in
the country and the private health insurance schemes. These will
also be discussed later.

In addition, there are private institutions that are providing social

security health services, mainly insurance companies such as AAR
Health Services and AIG Insurance Company, among others. Most
of the services offered by these private health insurance institutions
are intended for contributors that can afford to pay for the service,
which leaves the poor excluded. The total number of persons
benefiting from these social security providers in the form of health
insurance is difficult to estimate owing to fragmented interventions
in the country (Obot, 2007).

4.2. Legal and Policy Framework of Social

Security Systems in Uganda (Acts, Policies,
Strategies and Development Plans)
Uganda has ratified various conventions with social security
provisions at both international and regional levels. This section
highlights the key conventions and commitments to which Uganda
is a signatory.

Uganda is a signatory to the Universal Declaration of Human Rights

(1948), which recognises social security provisions. Article 22 of the
declaration states that ‘[e]veryone, as a member of the society, has
the right to social security and is entitled to reali[s]ation, through
national effort and international cooperation and in accordance with
the organi[s]ation and resources of state, of the economic, social and
29 http://www.equityhealthj.com/content/9/1/23

30 http://www.theeastafrican.co.ke/business/Uganda-employers-insurers-fail-to-
agree-on-new-insurance-scheme/-/2560/2421118/-/ij7342/-/index.html

CHALLENGES AND OPPORTUNITIES 49

cultural rights indispensable for his dignity and the free development
of his personality’. Article 25 formulates it in a more precise way as
‘a right to social security in the event of unemployment, sickness,
disability, widowhood, old age or lack of livelihoods in circumstances
beyond his control’. Furthermore, section 2 of the same article
states that ‘[m]otherhood and childhood are entitled to special care
and assistance. All children whether born in or out of wedlock shall
enjoy the same social protection’ (Universal Declaration of Human
Rights, 1948).

On 21 January 1987, Uganda ratified the International Covenant

on Economic, Social and Cultural Rights (1966) (Nyakundi, 2009).
Article 9 recognises the right of everyone to social security, including
social insurance. Furthermore, section 2 of article 10 states that ‘[s]
pecial protection should be accorded to mothers during a reasonable
period before and after child birth. During such period, working
mothers should be accorded paid leave or leave with adequate social
security benefits’ (International Covenant on Economic, Social and
Cultural Rights, 1966).

Uganda has not yet ratified the ILO Covenant 102 on Minimum
Standards of Social Security (1952), which covers a wider scope
of social security. The covenant is comprehensive in that it defines
the benefits that should respond to most of the risks. The benefits
recognised are: health care; sickness benefit; old age benefit;
employment injury benefit; family benefit; unemployment benefit;
maternity benefit; invalidity benefit; and survivors’ benefit (ILO,
1952). Despite the fact that Uganda has not yet ratified this
covenant, some of the above benefits have been domesticated into
the legislative framework that recognises social security provision
in Uganda.

In 2002, Uganda adopted the Madrid Plan of Action on Ageing

(MIPAA, 2002), which calls on the signatory nations to ensure that
social protection systems respond to the needs of older persons.
This plan aims to ‘ensure that persons everywhere are able to age
with security and dignity and to continue to participate in their
societies as citizens with full rights’.

Uganda adopted the Livingstone Call for Action in 2006, which sets
out commitments to social protection and calls on countries in Africa

50 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

to put in place costed plans for the implementation of direct income
support programmes (The Livingstone Call for Action, 2006).

Furthermore, Uganda adopted the African Union Social Policy

Framework (2008) that calls on African member states to recognise
the need for social protection programmes. The African Union Social
Policy Framework calls upon states to: build political consensus
and recognise that social protection should be a state obligation,
with provision for it in national legislation. The states should
also include social protection in national development plans and
poverty reduction strategy processes, with a link to the Millennium
Development Goals (MDGs) outcomes and processes; they should
also review and reform existing social protection programmes.
In addition, the governments should develop and operationise
costed national plans for social protection based on the concept of
a ‘minimum package’. Last but not least, the states should utilise
social protection instruments as a means of safeguarding the poor
from global financial and economic shocks (AU, 2008).

Uganda’s legislative and policy framework makes significant

provisions for social security and broader social protection. The
government has further domesticated the above conventions by
developing national laws, policies, strategies and development
plans. This section will highlight the key legal and policy frameworks
in Uganda with social protection provisions.

The 1995 Constitution of the Republic of Uganda provides a firm

basis for social security interventions. Article 14 states that ‘[a]ll
Ugandans enjoy rights and opportunities and access to education,
health services … decent shelter, adequate clothing, food security
and pension and retirement benefits’ and the National Objectives
and Directive Principles of State Policy specifically oblige the state to
make ‘reasonable provision for the welfare and maintenance of the
aged’. Article 40 recognises maternity leave for employed women
under the economic rights as one of the social security benefits
stipulated by the ILO Covenant 102 on the Minimum Standards of
Social Security (1952). Section 2 of the same article states that ‘[t]
he employer of every woman worker shall accord her protection
during pregnancy and after birth in accordance with the law’.

CHALLENGES AND OPPORTUNITIES 51

Article 254 of the 1995 Constitution of Uganda recognises pension.
It warrants that:

I. A public officer shall, on retirement, receive such pension as

is commensurate with his or her rank, salary and length of
service.
II. The pension payable to any person shall be exempt from
tax and shall be subject to periodic review to take account
of changes in the value of money.
III. The payment of pension shall be prompt and regular and
easily accessible to pensioners.
The Pensions Act (Cap. 281, Laws of Uganda) regulates the
arrangements of pensions for traditional civil servants, primary and
secondary school teachers, police officers, prison officers, doctors
and public employees in the judiciary. The Pensions Act also covers
civil servants in local authorities (Pensions Act, 1946).

It is worth noting that until 1994, the provision relating to pensions

for the urban authorities established the urban authorities’
provident funds under the Local Government Provident Act (Cap.
292), whereas municipalities were provided for separately under the
Municipalities and Public Authorities Provident Fund Act (Cap. 291).
The provision of pensions to both urban authorities and municipality
employees was amended under the Pensions Act in 1994 where local
governments (urban authorities and municipalities) were required to
provide pensions to their employees. In addition, the responsibility
of administering and managing pensions for local governments was
transferred to the Ministry of Public Service (Office of the President,
2013).

The Armed Forces Pension Act established on 3 September 1939 (Cap.

295) acknowledges the need for social security through providing for
the payment of pensions, gratuities and other allowances in respect
of the death, disablement or sickness of members of the armed
forces while serving in any unit raised in Uganda and residents of
Uganda while serving in any other unit of such forces.31

31 The Armed Forces Pension Act http://iclass.iuea.ac.ug/intranet/E-books/LAW/

all%20laws%20of%20uganda/STATUTORY%20INSTRUMENTS/SI_295_1.pdf
[Accessed on 5 November 2014]

52 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

The National Social Security Fund Act 1985 (Cap. 222) recognises
the establishment of a National Social Security Fund (NSSF) and the
need to provide for its membership, the payment of contributions
to, and the payment of benefits out of, the fund and for other
purposes. The NSSF is a provident fund (pays out contributions in
lump sum). The scheme was instituted with a core objective to
protect employees against the uncertainties of social and economic
life. The scheme is mandatory for employers that have five or more
employees. The contribution rate of NSSF is 15% shared at 5% and
10% by the employee and employer respectively (Nyakundi, 2009).
The NSSF provides a range of benefits.32

The Local Government Act 1997 (Cap. 243) recognises pensions as

one of the benefits for the local government staff under the terms
and conditions of service of local government staff. The act stipulates
that the pension payments will be in accordance with the Pensions
Act (Local Government Act, 1997).

The Retirement Benefits Regulatory Authority Act 2011 established

a Retirement Benefits Regulatory Authority whose objective is to
regulate the establishment, management and operation of retirement
benefits schemes in Uganda in both the private and public sectors.

The Workers’ Compensation Act 2000 (Cap. 225) entitles employees

to automatic compensation for any personal injury from an accident
arising out of and in the course of his employment, even if the injury
results from the employee’s negligence. The act further details
that, for an injury that leads to death, the compensation should be
equivalent to an employer’s monthly pay multiplied by sixty months.
Under this act, compensation is automatic. The compensation is paid
by the employer whether the worker was injured as a result of his
own mistake or not. In case the employee fails to resolve a dispute
with their employer, they can contact the Directorate of Labour in
the Ministry of Gender, Labour and Social Development, where the
matter can be resolved to compensate the employee (Young Leaders
Think Tank for Policy Alternatives, 2011).

The Employment Act 2006 entitles women to maternity leave and

men to paternity leave in employment. Article 36 (1) states that
‘[a] female employee shall, as a consequence of pregnancy, have
32 Old age, withdraw, invalidity, survivors, exempted and emigration benefits.

CHALLENGES AND OPPORTUNITIES 53

the right to a period of sixty working days’ leave from work on full
wages hereafter referred to as maternity leave of which four weeks
shall follow the childbirth or miscarriage’.

Section 2 of the article acknowledge that ‘[a] female employee who

becomes pregnant shall have the right to return to the job which
she held immediately before her maternity leave or to a reasonably
suitable alternative job on terms and conditions not less favourable
than those which would have applied had she been absent on
maternity leave’.

Article 55 of the Employment Act 2006 on sickness stipulates that

‘[a]n employee who has completed not less than one month’s
continuous service with an employer and who is incapable of work
because of sickness or injury is entitled to sick pay’. The act applies
to both public and private institutions in Uganda.

Article 57 of the Employment Act 2006 recognises paternity leave

and states that ‘[a] male employee shall, immediately after the
delivery or miscarriage of a wife, have the right to a period of four
working days’ leave from work yearly. The employee shall be entitled
to the payment of his full wages during the said paternity leave’.

The Parliamentary Pensions Act 2007, which makes provision for

a contributory pension scheme for Members of Parliament (MPs)
and members of staff of Parliament, established a Parliamentary
Pensions Fund for the payment or granting of pensions or retirement
benefits to MPs and members of staff of Parliament.

Uganda’s National Policy for Older Persons 2009 identifies the

provision of direct income support and social insurance as a key
social protection instrument for addressing the needs of older
persons.

The National Employment Policy 2010 supports social insurance

for workers in the formal sector, especially those who are able to
contribute to social insurance schemes such as the NSSF, private
pension or health schemes. It also specifies the responsibility of
employers to provide contingencies for their workers such as paid
maternity, paternity and sick leave.

54 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

In addition to the above legislative and policy frameworks, Uganda
has developed strategies which recognise social security provision.
For example, the National Development Plan (2010-2015) accepts
social protection as one of the key strategies for transforming
Uganda from a peasant society into a modern and prosperous
country. The NDP emphasises the diversification and provision
of comprehensive social protection measures for the different
categories of the population as a measure to reduce vulnerability
and enhance productivity of the human resource.

The Uganda Vision 2040, under section 5.4, identifies the need for
the development and implementation of social protection systems
to respond to the needs of vulnerable groups such as the elderly,
orphaned children, and the disabled, among others. The vision
further recognises the development of a universal health insurance
system through public-private partnerships.

The National Health Insurance Bill 2007 proposes the establishment

of a universal health insurance scheme that makes it mandatory
for all employees, especially those in the formal sector (both public
and private), to pay 4 % of their monthly earnings to the National
Social Health Scheme. Their employers would contribute another
4 %. Those in the informal sector or those with no job would be
mobilised under savings schemes where the same percentage would
be deducted for the insurance. The bill is currently in the Ministry
of Finance awaiting issuance of a certificate of financial implications
(The East African newspaper, 2014).

Uganda lacks a comprehensive national social protection

policy framework despite its ratifying and being a signatory to
international and regional commitments as well as domesticating
such commitments. This has left the legislation fragmented and
uncoordinated. This state of affairs poses a threat to access to social
security and makes citizens vulnerable to political manipulation. In
addition lack of comprehensive policy may lead to limited or no
state guaranteed provision of social security. It also makes the
social security interventions to be viewed as not social entitlement
or right to citizens. However, a draft is currently being developed by
the Ministry of Gender, Labour and Social Development through the
Expanding Social Protection Programme (MGLSD, 2014a).

CHALLENGES AND OPPORTUNITIES 55

Uganda’s social security legislative framework provides for workers
in the formal sector rather than those in the informal sector. This
leaves many of the Ugandans vulnerable to risks and excluded from
accessing social security schemes.

56 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

5.0. Drivers and Opportunities for the
Development of Social Security
Systems in Uganda
There is evidence of significant efforts being made by the Government
of Uganda and non-governmental actors to address the concerns
of the marginalised and vulnerable groups in Uganda through
social protection programmes. There are a number of factors that
have driven this development in Uganda. This section of the paper
analyses the socio-economic and political factors that have shaped
social security developments in Uganda.

I. Social security is anchored in the national policy and

legal framework: This is evident in the legislative frameworks,
policies and strategies with social security provisions. These include
provisions in the 1995 Constitution of the Republic of Uganda, the
Pensions Act, the National Social Security Fund Act, the National
Development Plan (2010-2015), Vision 2040 and others that have
been discussed in the above section. The existence of these measures
indicates a strong commitment from the Government of Uganda to
provide social security schemes. Furthermore, these policies and
legal frameworks represent an opportunity for the development of
social security systems in the country as they serve as a basis for
the citizens to demand social security schemes.

II. Institutional framework: The institutional framework in

place is another opportunity for the development of social security
systems in the country. The Ministry of Gender, Labour and Social
Development (MGLSD) is a public agency in Uganda that is
responsible for policy development and oversight of social protection
programmes and interventions and is in charge of regulating
the social security sector in partnership with other ministries, as
discussed in the previous section of the paper. However, this is
one of the least funded ministries in Uganda. For example, in the
financial year 2013/14 the Ministry of Gender, Labour and Social
Development was allocated about 0.3% of the national budget and
continues to experience cuts whenever excesses occur in the other
sectors. In the current financial year (2014/15) the ministry is the
second least funded sector, with a slight allocation increase of 0.1%
to 0.4% of the total national budget (CSBAG, 2014).

CHALLENGES AND OPPORTUNITIES 57

III. Other ministries and government agencies: There is also
growing support for social security in Uganda among various other
ministries and government agencies. For example, the Ministry of
Finance, Planning and Economic Development (MFPED) is currently
spearheading reforms and the liberalisation of the pension sector
and is also responsible for allocating funds for social pensions in
Uganda, more specifically for the civil servants. The Ministry of
Health is also currently finalising the drafting of a bill that will lead to
the establishment of a national health insurance scheme in Uganda.
Last but not least, the Office of the Prime Minister is implementing
public works schemes in selected districts of northern Uganda as
part of the post-conflict recovery programmes. Therefore, it can
be concluded that there is a growing interest within government
agencies in supporting social security systems in the country. The
challenge remains the lack of coordination among the institutions
that makes it difficult to implement social security schemes.

IV. Increasing interest of development partners: There

is increasing interest on the part of the development partners,
particularly DFID, Irish Aid and UNICEF, in social protection
programmes, specifically direct income support schemes. These
development partners have financially supported the Social
Assistance Grants for Empowerment (SAGE) under the Ministry
of Gender, Labour and Social Development, which is a pilot direct
income support scheme that provides senior citizen grants and
vulnerable family grants. In addition to financing the direct income
support schemes in the 14 pilot districts, the development partners
have also financed conferences, research studies, study trips and
institutional capacity-building of the government (Mubiru, 2014).

On the other hand, the World Bank has recently shown an interest
in the liberalisation of Uganda’s pensions sector. This is evident
in the recently launched Fourth Uganda Economic Update which
specifically explores the changes the country can make to its
existing pension system. The World Bank calls upon the Government
of Uganda to urgently liberalise the pension sector because the
limited number of social protection schemes in the country leave
the vulnerable elderly members of society exposed to poverty, a
situation that is exacerbated by the fact that few workers save for
their own retirement. This has resulted in a low domestic savings
rate, with underdeveloped capital markets acting as a brake on

58 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

potential growth and development. The World Bank further reports
that government spending on pensions provided benefits primarily
to a small, relatively highly paid group of public sector workers,
with expenditure set to rise, which places limits on the available
fiscal resources for other vitally necessary poverty alleviation and
development interventions (World Bank, 2014a).

V. Civil society organisations (CSOs): They are interested

in promoting the welfare of the citizens, particularly the poor,
vulnerable and marginalised, and this is evident in the advocacy
for the implementation of various social protection programmes
across sectors and regions in the country. However, these efforts are
patchy, uncoordinated and sometimes duplicative and at times even
omit key vulnerable categories of the poor. Worse still, many such
interventions are not located within the broader conceptual or policy
framework owing to the lack of a comprehensive social protection
policy framework (Lwanga-Ntale, Namuddu and Onapa, 2008). In
addition to the above, the CSOs have issued various position papers
on the liberalisation of the pension sector, calling for the amendment
of the National Social Security Fund Act as well as providing their
views on the proposed Retirement Benefits Liberalisation Bill
2011 (Uganda National NGO Forum, 2014). In the context of the
proposed reforms in the pension sector, Platform for Labour Action
(PLA), a key civil society actor, undertook a civil society analysis
of the Retirement Benefits Liberalisation Bill 2011. It proposed a
number of changes to the bill, such as mandatory social security
schemes for informal sector workers, including domestic workers;
the definition of maternity allowances for pregnant workers who
do not qualify for statutory pay; access to pension benefits before
retirement; and severe fines for those that do not abide by the
regulations. The organisation further recommended the prescription
of a minimum cash reserve for pension schemes (Parliament of
Uganda, 2014; CSBAG, 2014). Through the Uganda Social Protection
Platform (USPP), CSOs have been key stakeholders in advocating
the establishment of social security schemes in Uganda as well as
participating in social protection policy development.

VI. Increasing support for social security among political

parties: There is also growing support for social security systems
in Uganda across the political spectrum and this is evident in the
manifestos of all the key political parties in Uganda. For example,

CHALLENGES AND OPPORTUNITIES 59

the Forum for Democratic Change (FDC) manifesto 2011-2016, on
page 21, stipulates ‘providing cash transfer of USh 50,000 every
month to persons above 65 years’ (FDC, 2011). The Uganda People’s
Congress (UPC) manifesto 2011, on page 17, states that UPC plans
and commits to undertaking a study to explore the feasibility of
providing old age pensions to all elderly persons in Uganda (UPC,
2011). These are not different from the manifesto of the ruling party
– the National Resistance Movement (NRM) manifesto 2011-2016
– which commits to providing direct income support to the elderly
in Uganda. Specifically, page 41 of the manifesto states that ‘the
NRM Government will roll-out the cash transfer program for older
persons’ (NRM manifesto, 2011).

Furthermore, policy-makers, specifically the parliamentarians,

have formed a forum known as the Uganda Parliamentary Forum
on Social Protection. This platform brings together members of
Parliament with an interest in and who support social security
provision in Uganda. The forum was launched in early 2014 and
currently has over 40 members from both the ruling government
and the opposition political parties. With such a platform, it can be
seen that social security has started gaining political acceptance in
Uganda (ESP, 2014).33

VII. Private sector: In addition, the growing private sector in

Uganda presents an opportunity for the development of social
security systems in the country. The private sector is one of the
employers in Uganda whose employees contribute 10% of gross
wages towards the NSSF. In addition, some of the employers pay
health insurance for their employees at the workplaces. In addition,
the private sector is provides private health insurance in Uganda.
The major health insurance providers in Uganda include AAR Health,
IAA, AIG, CASE Medical Centre, and Jubilee Insurance, among
others. Furthermore, the financial service providers or insurance
companies are currently the largest providers of voluntary social
security schemes to both the formal and informal sectors in Uganda
(Barya, 2009; Nyakundi, 2009).

33 See http://www.socialprotection.go.ug/Parliamentary%20Forum%20on%20
Social%20Protection%20launched.pdf [Accessed on 6 November 2014]

60 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

6.0. Analysis of Key Social Security
Schemes in Uganda

Existing Social Protection Interventions

Uganda has built a multi-tier pension system model comprised
of non-contributory direct income support schemes, mandatory
contributory/social insurance schemes and voluntary private social
security schemes. The two most prominent parts are the public
pension system covering the public sector employees and the
NSSF that covers the private sector workers. Other social insurance
schemes include health insurance, worker’s compensation and social
assistance interventions such as direct income support schemes –
the senior citizen grant and the vulnerable family grants – under
the Social Assistance Grants for Empowerment (SAGE). There have
also been voluntary social security schemes implemented by private
institutions in the form of social insurance. This section describes
some of the above key social security schemes in Uganda.

6.1. Public Service Pension Scheme (PSPS)

The Public Service Pension Scheme (PSPS) was established on 1
January 1946 and is currently a non-contributory, defined pay-
as-you-go retirement benefit scheme financed directly by tax
revenues from the consolidated fund. Through the Ministry of Public
Service, benefits are paid to the public service employees and cover
traditional civil servants, including the police and prison services,
local government employees and teachers (Office of the President,
2013). The scheme has a generous full pension based on gross
salary with an accrual factor of 2.4% multiplied by the number of
years in service capped at 89% of final salary. It also promises a
commuted pension equivalent to one-third of the full pension to
new retirees. The pensions are indexed to wages. With regard to
survivors’ pension, the payable pension is 100% of the pension
entitlement of the deceased public officer. The guaranteed period
for the survivors’ pension is 15 years. The scheme also provides an
array of other gratuities such as contract, death, short-term and
marriage gratuities (Nyakundi, 2009).

CHALLENGES AND OPPORTUNITIES 61

The disability pension for civil servants is recognised in the Pensions
Act as retirement on medical grounds to the satisfaction of the
Pensions Authority (Ministry of Public Service, 2012). The scheme
has currently around 269, 000 employees – covering traditional civil
servants, civil servants in local governments and teachers (Office of
the Prime Minister, 2013). The payments to beneficiaries include a
one-off lump sum given upon retirement and a pension based on the
prevailing salary of civil servants in similar positions as the retiree’s
final position paid monthly. Civil servants who opt out of the service
before the attainment of retirement age forfeit the benefits (MGLSD,
2013). The public pension scheme constitutes about 0.82% (of which
traditional civil servants constitute 0.3%, while teachers constitute
0.52%) of the entire population of Uganda. The total benefits that
beneficiaries consume are about 0.35% of the country’s GDP as of
2011(Office of the President, 2013).

6.2. The Parliamentary Pension Scheme

The Members of Parliament (MPs) pushed for a pension scheme
for themselves since they are public servants, too, and yet they
are not covered by the current public service pension scheme.
The Parliamentary Pension Scheme covers MPs and members of
staff of Parliament, providing for pension and gratuity under the
Parliamentary Act 2007. The Parliamentary Pensions Act No.6 of
2007 was passed by the 7th Parliament in April 2007 and assented
into law on 20 July 2007. The scheme covers members of Parliament,
starting with those who served in the 6th Parliament (Office of the
President, 2013). All the members of Parliament, whether elected
or ex-officio except the prime minister and vice president, benefit
from the scheme. The Parliamentary Pension Scheme is contributory
in nature; MPs contribute 15% of their pensionable emoluments
while the government contributes 30% of the monthly pensionable
emolument. The government contributions to the fund are charged
and payable out of the consolidated fund. The scheme provides for
the payment of pension to a member who retires or ceases to be
a member on or after attaining 45 years of age, subject to being a
member for a continuous period of five years or more. Furthermore,
a member is entitled to a pension of a lump sum payment of not more
than 25% of his or her credit. It is also worth mentioning that section
21 of the Parliamentary Pensions Act provides for a government

62 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

guarantee during the short and medium term, and ensures that
the scheme is solvent for payments that may be required under it
(Parliamentary Pensions Act, 2007). However, the period when this
lapses is not indicated, which makes the beneficiaries vulnerable to
risks in case the government pulls out. The estimated value of the
Parliamentary Pension Scheme at the start was USh 20.44 billion
and by 2012 it had grown to an estimated value of USh 55.5 billion
(Kwesiga, n.d.).34

However, the public pension sector currently faces a number of

challenges, including lack of timely access to benefits and access by
unqualified beneficiaries through the enrolment of ghost pensioners
partly due to lack of proper records. As a result of these and other
issues, the fiscal burden of these schemes is increasing, while they
are failing to achieve their goal of providing social security to all
members of society. The public servant pensioner receives a pension
with an average value of up to 87 % of their final salary before
retirement, which is a very high replacement rate when compared
to similar schemes in other African countriess, where a range of 60
to 70 % is more common. In addition, the increasing size of the civil
service and the average age of its employees are contributing to the
high cost of financing the pensions, raising questions regarding its
sustainability (World Bank Economic Outlook, June 2014). Without
parametric reforms to reduce the generosity of the scheme, the
fiscal burden of pension liabilities will increase and thus could
constrain the government’s ability to finance equally important
priorities of public expenditure, including the expansion of social
security programmes for the poorest and most vulnerable persons
in the country. In addition, the governance-through-corruption
practices by the public and private sector officials strategically
located within different government and private institutions who
conspire to embezzle public funds have negatively impacted (such
as leading to loss of trust in the funds) the pension sector in Uganda.
This is worsened by the limited institutional capacity and lengthy
bureaucratic processes that delay sanctioning of those involved in
corruption and encourage impunity (ibid.).

34 See http://chimpreports.com/9711-igg-probes-theft-in-shs55bn-parliament-
pension-scheme/ accessed on 10 November 2014

CHALLENGES AND OPPORTUNITIES 63

6.3. National Social Security Fund (NSSF)
The NSSF is the largest social security scheme and currently has
over 1.45 million registered members, of whom 458, 000 members
are active (NSSF, 2014). This scheme is a provident fund (pays out
contributions in lump sum) mandated by the government through
the National Social Security Fund Act (Cap. 222) to provide social
security services to the private sector employees in Uganda. The
scheme was instituted with a core objective to protect employees
against the uncertainties of social and economic life. The NSSF pays
a competitive interest to the members without compromising the
safety of member savings. In 2012, the fund paid an interest rate
of 10%, translating into USh 202 billion, an improvement from 7%
paid in 2011. The interest rate of 10% is above the 10-year inflation
rate of 9.23%. NSSF, therefore, preserves the value of members’
savings. The scheme provides the following benefits to its members:

I. Old age benefit: This payment is payable to a member who

has reached the retirement age of 55 years.
II. Withdrawal benefit: This is payable to a member who has
attained the age of 50 years and is out of regular employment
for one year.
III. Invalidity benefit: This is payable to a member who, because
of illness or any occurrence, develops incapacity to engage
in gainful employment. In this case, a medical practitioner’s
report is required to ascertain the condition.
IV. Survivors benefit: This is payable to a dependant survivor(s)
in the unfortunate event of a member’s death.
V. Exempted employment benefit: This is payable to members
who join employment that provides alternative social
security schemes recognised under the existing law and
exempted from contributing to the NSSF.
VI. Emigration benefit: This is payable to a member (Ugandan
or expatriate) who is leaving Uganda for good.
(NSSF, 2013)35

35 See New Vision, Thursday 12 September 2013/ Pension/Retirement Benefits

Sector Supplement 2013

64 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

The fund is a contributory scheme fully funded by contributions
from employees and employers, both contributing a total equivalent
to 15% of the employee’s monthly wages, with the employee
contributing 5% and the employer 10% (Nyakundi, 2009). The
scheme covers all employees in the private sector from the age of
16 to 54 years working in enterprises having more than five workers
who are not covered by the government’s scheme (New Vision,
2013). The scheme does not reach people who work in the informal
sector, including small holder farmers.

The low returns on retirement savings and methods of payment

undermine the security of pension savings in the NSSF. The poor
returns derived by this fund have a direct negative impact on the
value of members’ retirement savings, making it impossible for
these members to maintain pre-retirement consumption levels. In
addition, the NSSF currently only pays out entitlements in the form of
a lump sum, rather than an annual pension income, further reducing
the level of security provided to members. Overall, mismanagement
of NSSF funds in the past has also contributed to a lack of public
confidence in pension savings systems (World Bank, 2014b).

The other limitations facing the NSSF include: the small coverage
of only organisations with more than five workers and only in
the formal sector; it covers a limited range of products; there is
excessive government control through the line minister; and limited
participation of the basic interested parties, specifically the workers
and the employers (National Organisation of Trade Unions, 2011).

6.4. Reforms in the Pension Sector of Uganda

The Government of Uganda has initiated measures aimed at
reforming the pension system in response to the challenges facing
the sector. These reforms are laying a foundation for reforming
Uganda’s pension sector to achieve a wider coverage where a
significant proportion of the workers are saving for their retirement.
The benefits are adequate and sufficient to meet the retirees’ basic
needs. The pension sector is also sustainable in that it delivers
to the retirees the promised benefits and improved governance
through ensuring the security of the benefits that are not lost and
misappropriated and also through ensuring that the pension sector
is managed efficiently to optimise returns (World Bank, 2014b;

CHALLENGES AND OPPORTUNITIES 65

Ministry of Public Service, 2012; Nyakundi, 2009). As mentioned in
the earlier sections, Uganda started pension reforms in the 1990s
as a result of the many challenges facing both the PSPS and the
NSSF. The reforms have an overall objective of creating a robust and
efficient pension sector. The government is currently in the process
of liberalising the sector with the aim to introduce competition from
other players in the provision of pension services. This is expected to
lead to improved governance, better services and the sustainability
of the financial sector and reduced administration costs (New Vision,
2013a).

The reforms started with the establishment of the Uganda

Retirement Benefits Regulatory Authority (URBRA). The Uganda
Retirement Benefits Regulatory Bill 2011 was passed by Parliament
into law on 26 April 2011. His Excellency the President of Uganda
assented to it on 28 June 2011 and it came into effect in September
2011 (URBRA Act, 2011). This act provides for the establishment
of the Uganda Retirement Benefits Regulatory Authority (Office
of the President, 2013). URBRA was established to regulate the
establishment, management and operations of retirement benefit
schemes in Uganda in both the private and public sectors as well
as promote the development of the retirement benefits sector.
URBRA is a semi-autonomous agency under the Ministry of Finance,
Planning and Economic Development with a governing board and
a management team, led by an executive director. The governing
board of directors has representatives from the Ministry of Finance,
Planning and Economic Development, the Ministry of Public Service,
the Ministry of Gender, Labour and Social Development, and the
Federation of Uganda Employers (URBRA, 2014). The Ministry of
Finance, Planning and Economic Development, which is spearheading
the reforms, and URBRA have benchmarked the regulatory regime
based on countries that have successfully implemented pension
reforms, such as Brazil in Latin America (Kisambira, 2014). The
implementation of the pension sector reforms will start when the
Uganda Retirements Benefits Sector Liberalisation Bill is passed into
law by the Parliament of Uganda. The bill was first tabled before
the 8th Parliament by the Hon. Minister of Finance, Planning and
Economic Development. It is currently under consideration by the
Finance Committee of the 9th Parliament that continues to receive
amendment proposals regarding the bill through stakeholders’
consultations (Rwakakamba, 2014).

66 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

The Uganda Retirement Benefits Sector Liberalisation Bill (2011)
proposes a number of reforms in the pension sector (URBRA,
2011). The key reforms are: The Public Service Pension Scheme
becoming a contributory one, with government contributing 10%
and employees contributing 5% to a pension fund which will be
managed through an independent pay-as-you-go fund. This is
because the non-contributory nature of the Public Service Pension
Scheme (PSPS) combined with relatively generous payments (based
on the final salary) has made the pension unsustainable as a result
of issues related to inadequate budget allocation and the amassing
of substantial arrears. The other reform includes lowering the rate
at which employees accrue pension entitlements and basing the
pension on an average of the last five years (rather than the final
salary alone) (Wylde, Ssewankambo and Baryabanoha, 2012). This
proposal aims at making the Public Service Pension Scheme fully
funded for fiscal sustainability. The bill also proposes extending
coverage of social security to all those in formal sector employment.
This will involve removing the current threshold of more than five
employees for companies contributing to the NSSF. The bill further
proposes portability and transferability of the retirement savings
to other registered schemes, across occupations in Uganda or the
East African Community. The introduction of fair competition among
the different licensed retirement benefits schemes for offering
retirement products and services is another proposal for reforming
the pension sector. This is aimed at improving governance in the
entire pension sector, including schemes collecting mandatory and
non-mandatory contributions for the Public Service Pension Scheme,
involving separating the scheme from the Ministry of Public Service
and also ensuring that the Public Service Pension Fund is run by a
professional governing board of trustees (New Vision, 2013 b).

The proposed pension reforms have raised a number of debates in

Uganda and a number of stakeholders have been opposed to the
move to liberalise the pension sector. There have been fears that
the government should be cautious about foreign pension managers
before it opens up the pension sector for competition. In his book,
Advancing the Uganda Economy, Dr Suruma Ezra (former Minister
of Finance between 2005 and 2009) recognises that Uganda, being
a small underdeveloped economy, may not have the capacity to
vet external players, who may enter the pension market to collect
contributions and then later disappear with the money. He further

CHALLENGES AND OPPORTUNITIES 67

notes that there is a risk that foreign players in Uganda’s pension
sector may later collapse for a number of reasons, leaving nationals
destitute in their old age. Suruma also argues that the Liberalisation
Bill consultations have been limited to academics, politicians, civil
servants and foreign experts in the country, which excludes the
majority of Ugandans who hardly understand pension systems
and social security (The Weekly Observer, 2014).36 The URBRA
Act 2011 also excludes the workers from the board of directors,
which puts their savings at risk. The board has no representation
of workers/savers or their organisations (trade unions). Section 8
of the act (page 10) authorises the Minister of Finance to appoint
three Permanent Secretaries and four persons knowledgeable in the
administration of retirement schemes on the board (Rwakakamba,
2014).

The proponents of the liberalisation of the pension sector argue

that it will break the monopoly of the NSSF and the PSPS and
bring many people in the informal sector on board to access social
security benefits (The Weekly Observer, 2014). According to Moses
Bekabye, the acting Chief Executive Officer (CEO) of URBRA, the
reforms will ensure that all Ugandans are protected from old age
poverty, such as ensuring a minimum social safety net for the
elderly. Savings coverage in Uganda is low, as less than 10% are
covered, which means that there is no social security for 90% of the
population (New Vision, 2013a). Others have also indicated that the
NSSF is a provident fund and not a pension scheme and lump sum
payments to beneficiaries are usually consumed quickly, leaving
the beneficiaries vulnerable to risks. This is worsened by the low
interest rates that are most times below the inflation rate, which
results in the real value of their savings diminishing over time, as
well as mismanagement of the funds due to governance issues.37

However, the NSSF has been repositioning itself to favourably operate

in a liberalised environment. The fund has finalised plans to broaden
the scope of the benefits to include home ownership, education,
health and maternity and unemployment benefits. Other final plans
36 See http://observer.ug/index.php?option=com_content&view=article&id=34244:-
former-minister-cautions-on-pension-liberalisation&catid=79:businesstopstories&
Itemid=68 accessed on 8th October 2014

37 Why the Proposed Pension Sector Reforms in Uganda May not Benefit ‘Pensioners’
-http://preciousinformine.wordpress.com/2014/05/29/why-the-proposed-
pension-sector-reforms-in-uganda-may-not-benefit-pensioners/ [accessed on 15
November 2014]

68 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

include engaging the regulator to give current members the option
to choose between lump sum payment and annuities and, lastly,
developing new value-adding products for the bNSSF members. In
May 2013, the fund also received a licence from the regulator to
continue operations as a retirement benefits scheme, in accordance
with the Uganda Retirement Benefits Regulatory Authority Act of
2011 (New Vision, 2013a).

The World Bank Economic Outlook (2014) identified key constraints

that may hinder Uganda from achieving the objectives of the pension
sector reforms. These are:

1. The governance risks related to fraud and corruption. If

the proposed pension reforms in both the public and
private sectors are not properly managed under strong,
independent, regulated and transparent institutions, they
will not provide an effective pension system for workers.
Therefore, in order to address governance risks, the Uganda
Retirement Benefits Regulatory Authority must be made
functional and effective to regulate and supervise the sector.
2. The costs could rise with many pension operators. There
are concerns that private sector competition will simply lead
to higher costs within the pension sector, due to marketing
battles to secure mandatory contributions. This needs to
be addressed with appropriate regulation and competition
managed through cost caps and low cost default funds.
3. The low level of development of the financial market
may limit benefits from a liberalised pension system. The
level of development of the capital market remains low in
Uganda and this may create challenges to the achievement
of some efficiency objectives. The NSSF portfolio is highly
concentrated and dominates both the local equity and
government bond markets. Without both the development
of a broader range of local investment opportunities and the
possibility for increased geographical diversification, it will
not be possible to greatly increase the returns generated
by the NSSF or private sector players. Plans to develop the
financial and capital markets need to be strengthened if
pension assets are to contribute to long-term financing. The
management of the potential build-up of assets in the PSPF

CHALLENGES AND OPPORTUNITIES 69

 fund will also need careful consideration. Recycling these
assets back into government bonds would achieve little.
Additional resources will also flow to the capital market from
the contributions of formal workers who were previously not
covered under the NSSF. Regulations issued by URBRA and
its ability to monitor the sector will be critical to enhancing
the sector’s efficiency.
4. The lack of institutional capacity at the Ministry of Public
Service (MoPS). Following governance issues in 2012, the
management team at MoPS, together with the technical team
responsible for the management of pensions, was replaced
entirely. While this change may have been necessary, it
places great strain on the new management team, which
will need to quickly build the capacities required to manage
the proposed reforms. A unique personal identification
system is an essential building block for administrative
reform and would be required before pension coverage
can be substantially expanded. The recently inaugurated
national identity card is expected to address this, but if
not successful, the lack of a national, universal personal
identification system could jeopardise the goal of further
increasing coverage of the pension system.
5. Informality of the labour markets and the high cost of universal
pension systems may constrain extending coverage. The
pension system still needs to cover over 75% of workers in
the formal sector who are not yet contributing to pensions.
However, by 2010, 84 % of the working population was
employed in the non-wage, informal sector, particularly in
agriculture. Therefore, innovative approaches such as the
Mbao Scheme of Kenya would be needed to extend coverage
to the many people employed in the informal sector. On
the other hand, universal pension systems that cover all
elderly people need to be carefully planned as they are quite
costly. Uganda should learn from the Kenya Mbao pension
scheme38 established by the Retirement Benefit Authority
for the informal sector (World Bank, 2014b).
38 The Mbao pension programme covers medium and small micro-enterprises and
Jua Kali associations. Members commit to save at least KSh 20 a day or USD 60
per month towards retirement. Mbao members can make payments through the
leading mobile transfer services such as M-PESA and the Airtel money transfer
service. A similar scheme is currently being developed between the Retirement
Benefits Authority and matatu (taxi and minibus) operators.
70 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA
 6. Transition costs could increase fiscal spending on public
pensions before it declines, as the public sector scheme is
converted into a contributory system. These transitional
costs would occur since the government would be paying
the existing pensioners benefits while starting to contribute
to the new public service pension fund. The cost would have
to be properly planned for within the national budget. The
fiscal cost of pensions would increase in the short term
before declining. Given the tight budgetary conditions,
financing the transition costs of moving to a funded PSPF
could be challenging. Though likely to only represent a
small percentage of GDP, this could represent a significant
portion of the government’s revenues, given the low rate of
tax collection in the country. In the long run, the financial
sustainability of the fund could be put at risk if the parametric
reforms of the PSPF scheme are not sufficient to balance
contributions and benefits, and if the government fails to
pay its contributions.
(World Bank, 2014b)

6.5. Workers’ Compensation

The Workers’ Compensation Act (Cap. 225) provides compensation
to workers employed both by the government and the private sector
who suffer injury or contract occupational diseases in the course of
their employment. The injuries covered are only those which result
in permanent incapacity or incapacitate the worker for at least three
consecutive days from earning full wages at the work at which he or
she was employed. In spite of the fact that the law requires every
employer to insure and keep themselves insured in respect of any
liability which may arise under the Workers’ Compensation Act, only
a few employers in the private sector have insurance cover (MGLSD,
2014c).

Despite the fact that the provisions for workers’ compensation are
clear in law, implementation still remains a challenge both in the
public and the private sectors. There is a problem of bureaucracy
in processing and paying compensations to employees or to their
family members in case of death. The assessment process takes
over three years in the case of government employees before they

CHALLENGES AND OPPORTUNITIES 71

can access their compensation mainly as a result of limited financial
resources. In the private sector, few employers have attempted to
insure their workers. Most employees in the private sector either do
not report workplace accidents to the labour officers as required by
law or delay settling claims because their workers are not insured.
The failure or delay in paying compensation for work injuries makes
workers and their dependants more vulnerable and increases their
risk of falling into poverty (MGLSD, 2013). The Government of
Uganda also pays claims for workers’ compensation by the public
sector workers. The payments are managed by the Ministry of
Gender, Labour and Social Development (Wylde, Ssewankambo and
Baryabanoha, 2012).

6.6. National Health Insurance

The Ugandan health system is made up of both public and private
health-care service providers, which operate alongside traditional
healers. The public system provides 60% of all health-care services.
The private-not-for profit (church-related) sub-sector provides about
30% of health care and the rest (10%) is supplied by the private-for-
profit sub-sector. Private-not-for-profit units often exist in remote,
isolated rural places and supplement the inadequate health service
provision. In the 1990s, the Government of Uganda introduced user
fees in the public health system. However, in 2001 the government
abolished user fees in all the public health units upon realising that
the fees excluded over 50% of the population from receiving health
care at the public health facilities. Though the abolition of user fees
was aimed at eliminating financial access barriers, they continued to
be levied in the private wings. The purpose of the user fees was to
meet the huge public sector deficit and a response to pressure from
structural adjustment programmes. The private health-care service
providers have continued to charge user fees in Uganda. The health
sector system in Uganda is decentralised at district, sub-county
and parish levels, and has regional and national referral hospitals
(Basaza, Criel and Van der Stuyft, 2007).

The increasing health-care costs, inadequate tax revenue and

unsustainable donor funding have made the Government of Uganda
think of alternative systems of health-care service provision.
The government, through the Ministry of Health, is currently
in the process of developing a national health insurance scheme

72 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

which will consist of compulsory contributions to health funds by
the formally employed. The scheme is expected to ensure that
Ugandans have financial access to affordable, equitable and quality
health-care services (Kagolo, 2014).39 Uganda is the only country
without a national health insurance scheme out of the five East
African countries. For example, in 2010 Rwanda enrolled 8.5 million
members in its national scheme known as ‘Mutuelle de Santé’ which
depends on citizens’ contributions based on their economic status,
though the government pays for those who cannot afford. Rwanda
has achieved about 98% coverage whereas Kenya is at 35%,
Tanzania at 25% and Burundi at 24% (ibid.).

The health insurance policy has been sustained by the ruling National
Resistance Movement (NRM) and this has contributed to a sense of
government ownership and deep institutional knowledge (Basaza,
O’Connell and Chapčáková, 2013). The National Health Insurance
Scheme Bill 2007 has been shelved for over eight years since the
Government of Uganda announced plans to introduce a national
health insurance scheme which would enable all citizens of Uganda
to have access to health-care services. The scheme was expected
to start in the 2012/13 financial year but was halted because of
criticisms from major stakeholders, who described it as another
tax burden on employees; these criticisms resulted from the fear
that the policy might increase the already high costs of doing
business in Uganda (Mugerwa, 2013). However, this scheme is yet
to be fully developed because the National Health Insurance Bill is
neither finalised nor passed into law by Parliament. The proposed
National Health Insurance Scheme is a contributory health financing
mechanism, in which members pay a premium (4% of their gross
salary) in exchange for a defined package of services, containing
elements from both the formal and informal employment sectors.
The scheme will be established by an Act of Parliament as part of
proposed reforms to achieve universal health coverage (Basaza,
O’Connell and Chapčáková, 2013).

Under the proposed National Health Insurance Bill, civil servants will
pay 4% of their monthly earnings to the insurance scheme, which
will be matched by a contribution equivalent to 4% of their earnings
by their employers, while those in the informal sector or those
39 Article on health insurance scheme to start soon, published in New Vision on
Thursday 20 November 2014

CHALLENGES AND OPPORTUNITIES 73

without a job will be mobilised under a savings schemes where the
same percentage will be deducted for the insurance (Mugerwa Yasin,
2013).40 The scheme’s members will include public servants and all
people who are employed by firms with more than five workers in
Uganda. These members will be entitled to register four dependents
with the scheme. In the case of an indigent or poor person, the
government will use the funds appropriated by Parliament to the
scheme for the purpose. According to the bill, every person resident
in Uganda who is not a member or beneficiary of a government-
managed scheme shall be registered as a member of a private
commercial health insurance or a community health insurance
scheme. The proposed law also states that private commercial
health insurance schemes will be regulated in accordance with
the Insurance Act 2011 and the Medical and Dental Practitioners
Act 1996. The bill also provides that foreigners resident in Uganda
shall be registered as members or beneficiaries of the scheme or as
members of a community health insurance scheme. The bill seeks to
facilitate the provision of affordable and quality health-care services
to citizens. The bill will establish a board of seven directors for the
scheme. They will include the chairperson, a representative from
the public, accredited public health service providers as well as the
Ministries of Health, Public Service and Finance (Kashaka, 2014).
In order to accelerate universal coverage, the National Health
Insurance Bill provides for the concurrent operation of different
insurance sub-schemes – the Social Health Insurance Schemes,
Community Health Insurance Schemes and Private Commercial
Health Insurance Schemes. The package for the national health
insurance will include outpatient and inpatient services, medicines,
supplies on the essential medicines list and limited preventive
services (Kagolo, 2014).

However, a number of stakeholders feel that the bill has shortcomings

in its current shape. For example, the Insurance Industry, through
the Uganda Insurers Association, proposes changes to the National
Health Insurance Scheme. The association suggests that, given the
potential reluctance of the private sector to mandatorily contribute
to the scheme and the potential effect of having mass numbers enrol
at a specific number of facilities, each formally employed person,
40 Article published in Daily Monitor on 20 July 2013. Available on http://www.
monitor.co.ug/News/National/Shelved-health-insurance-plan-gets-new/-
/688334/1920238/-/7wypnrz/-/index.html

74 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

both in the public and the private sectors, should contribute 1% of
their salaries directly to the National Health Insurance Scheme. It
further proposes that, instead of the national insurance scheme being
managed by the government, it can be opened up to several private
managers who can then compete for the contributions, which makes
the scheme competitive and efficient (Uganda Insurers Association,
2014).41 The draft bill has been finalised and the Ministry of Health
is currently waiting for the certificate of financial implications from
the Ministry of Finance, Planning and Economic Development so as
to prepare a Cabinet Paper and have the bill tabled in Parliament
(Nakatudde, 2014).

6.7. Social Assistance Grants for

Empowerment (SAGE)
The Ministry of Gender, Labour and Social Development (MGLSD),
in partnership with the Department for International Development
(DFID), Irish AID and UNICEF, has been implementing the Expanding
Social Protection (ESP) programme since July 2010. The ESP is
a five-year programme that seeks to reduce chronic poverty and
inequality and promote inclusion through embedding a national
social protection system, including social assistance for the poorest
and most vulnerable, as a core element of Uganda’s national policy,
planning and budgeting process (Namuddu et al., 2014; Bukuluki
and Watson, 2013; Wylde et al., 2012; DRT/CPRC, 2013; OPML,
2012). The ESP was designed around three main components: a)
the development of a national social protection policy and costed
strategy; b) institutional reform and capacity-building within the
MGLSD and across government as a whole; and c) engagement with
political actors to build understanding and commitment to social
protection (Namuddu et al., 2014). In addition, the ESP programme
implements the Social Assistance Grants for Empowerment (SAGE)
pilot scheme, which aims to generate evidence on the impact and
feasibility of delivering small but regular and reliable direct income
support to poor and vulnerable households (ibid.). The SAGE scheme
is currently implemented in 15 districts42 of Uganda and comprises
41 See http://uia.co.ug/the-insurance-industry-proposes-changes-to-the-national-
health-insurance-scheme

42 Apac, Kole, Amudat, Moroto, Nakapiripirit, Napak, Kiboga, Kyankwanzi,

Kaberamaido, Katakwi, Kyegegwa, Kyenjojo, Nebbi, Zombo and Yumbe

CHALLENGES AND OPPORTUNITIES 75

a Senior Citizen Grant (SCG) – or Social Pension – for older people
aged 65 years and above (60 years in the disadvantaged Karamoja
region) and a vulnerability-targeted Vulnerable Family Grant (VFG).
All together 105,836 direct beneficiaries have been enrolled to-date
and over 80% of programme beneficiaries are enrolled in the SCG
component. Beneficiaries of both components receive USh 50,000
(USD 20) every two months and over USD14.9 million had been
disbursed through the MTN Mobile Money service by end of March
2014 (Namuddu et al., 2014).

Operational research, evaluations and pay point surveys conducted

provide evidence of how the cash transfers have transformed the
SAGE beneficiaries and their households. For example, Senior Citizen
Grants (SCGs) have been shown to have increased access to health,
education, food security and local economy investment through petty
trade and micro-enterprises (OPML, 2012; MGLSD 2014a; Namuddu
et al., 2014; Bukuluki and Watson, 2013). However, the programme
has encountered certain challenges, including staffing gaps at local
government level, difficulties in proving the age of beneficiaries,
lack of birth and death information, long distances to pay points
and connectivity issues, given the fact that the payment delivery
system relies on an instant e-money transfer service (Bukuluki and
Watson, 2013). The Government of Uganda has also not fulfilled its
commitment to counter-financing of the programme which raises
questions of sustainability.

6.8. Public Works Programmes

There are a number of programmes with public works components
concentrated in northern Uganda. These programmes include
the Northern Uganda Social Action Fund (NUSAF), the Karamoja
Livelihoods Improvement Programme (KALIP) and the Agricultural
Livelihoods Recovery Programme (ALREP). The objectives of the
public works programmes include the creation of community assets,
the provision of food items to households affected by famine and the
transfer of cash transfer to poor households with labour capacity.
The public works schemes targeted about 500,000 people as of 2012
(MGLSD, 2014c). They are the second biggest category of social cash
transfers after the SAGE in Uganda. However, these schemes face a
number of challenges from a social protection perspective. They are
currently fragmented, limited in coverage and also do not guarantee

76 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

a regular and predictable minimum level of income for vulnerable
households. The objectives of the public work components in these
programmes have a limited social security focus. The programmes
are more concerned with the development of the assets43 than with
the creation of predictable employment because the duration of
employment is short and may be created at any time of the year,
and do not take into account seasonal variations in consumption
(McCord, Onapa and Levine, 2013; MGLSD, 2014c). The scheduling
of public works is usually influenced by the design and approval
processes, rather than by a consideration of the most appropriate
period for transfers (MGLSD, 2014c).

According to the MGLSD, public works programmes in Uganda tend

to be relatively high-cost as a transfer mechanism (averaging about
USD 3-5 per USD1 of benefit transferred). This is in part due to the
fact that (a) they operate on a small scale; (b) the non-wage costs of
construction activities in northern Uganda (where all of the existing
programmes operate) are high, owing to remoteness; (c) many of
the programmes involve costly layers of donor NGO involvement in
implementation; and (d) in many of the programmes the transfers
were a secondary benefit, with the primary benefit seen as being
the asset developed. This suggests that a larger programme (that
reached economies of scale, with lower overheads and implemented
in other parts of the country) could potentially transfer resources to
the poor at reasonable costs (MGLSD, 2014c). One-off investments
are unlikely to be effective in terms of promoting sustained impacts
on livelihoods at either household or community level. While
programming is linked to district development plans, interventions
tend to be guided by donor or project preferences rather than being
part of a community- or district-wide development strategy. Lack of
technical capacity is also undermining the quality of infrastructure
developed in some programmes. The quality of technical inputs
into public works programmes varies with the capacity of the
implementing institutions. This is particularly an issue for the Assets
for Work and NUSAF programmes, which depend on the limited
expertise of implementing partners and government agencies
respectively (ibid.).
43 For example, ALREP is building and renovating roads, bridges, stores and markets
using labour-intensive methods which involve employing the local communities.
The money paid for the work to the communities is expected to assist families in
purchasing household items and meeting other household needs as well as farm
tools such as hoes, and seeds aimed at boosting agricultural production (Office of
the Prime Minister, 2014).

CHALLENGES AND OPPORTUNITIES 77

6.9. Private Social Security Schemes
There are a number of private non-statutory social security schemes,
also known as voluntary schemes, managed by employers and public
institutions either on their own or through insurance companies.
These include private pension schemes (such as the Makerere
University Retirement Benefits Scheme (MURBS) and the Bank of
Uganda Retirement Scheme, among others) and health insurance.
Furthermore, there are various forms of savings schemes under
the informal sector that support their members in times of financial
crisis. These voluntary schemes have been established by a range
of employers to provide retirement benefits to their employees.
However, previously these private sector schemes had not been
subjected to regulation, and little is known about their parameters,
scope and performance (World Bank, 2014b). The voluntary savings
schemes are regulated by the Uganda Retirement Benefits Regulatory
Authority. More interestingly, these private social security schemes
usually operate side by side with the statutory NSSF arrangements.
They, therefore, cover individuals whose incomes and standard of
living allow them to afford additional contributions for supplementary
benefits over and above what is being provided under the basic
state-mandatory arrangement (Barya, 2009).

Previously, the private social insurance schemes were unregulated

before the establishment of the Uganda Retirements Benefits
Regulatory Authority. Currently the URBRA has registered and
provided licences to 52 schemes that are private.44 URBRA has also
licensed service providers, including 12 administrators (corporate),
six fund managers, five custodians, four corporate trustees and 275
individual trustees. The licensing of the retirement benefits schemes
(pension schemes, provident funds, private occupational schemes,
and gratuity schemes) commenced in December 2012. Most of
these retirement benefits schemes were already in existence and,
therefore, are all operational, and the URBRA recognises their
existence in section 96 of the act (Bahingwire, 2014).

According to the URBRA Interim Chief Executive Officer, ‘…the primary

objective of licensing schemes, custodians, trustees, administrators
in the pension sector is to create transparency and accountability
which are key factors for good governance’. He further said that

44 Refer to the Annex – List of licensed retirement schemes

78 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

for a long time, the retirement benefits sector was not regulated
and there was no requirement for licensing of schemes, custodians,
trustees, administrators and fund managers. This led to problems
of inadequate benefits to those who saved, and misappropriation
of workers savings, leading to loss of trust by the general public in
the retirement benefits system, which is a key component of social
security (Daily Monitor, 2014).

6.9.1. Private health insurance schemes

There is also a number of private institutions that provide health-
care insurance services in Uganda. These are mainly insurance
companies, such as AAR Health Services and AIG Insurance
Company. Other private health insurance providers include the
International Air Rescue (IAA), Case Medical Centre, Kadic Hospital,
International Health Network, St. Catherine’s Clinic, and Paragon
Hospital, among others (Obot, 2007). These health insurance
service providers are not different from the private health service
providers, except that they enter into some semi-formal pre-
payment arrangements with some of their clients. The pre-payments
are calculated according to previous utilisation of health services
and the size of the family. The pre-payments are also calculated on
an ad hoc basis depending on whether you go as an individual or
as an organisation/company (Zikusooka et al., 2007). Most health
services offered by the private institutions are for the contributors
who can afford to pay for them, which eventually exclude the poor
persons that cannot afford them. The number of beneficiaries of
the private health insurance companies is difficult to estimate as
they are fragmented. These private health insurance providers are
regulated by the Uganda Insurance Commission. The main functions
of the Uganda Insurance Commission include: offering annual
business licences; receiving complaints from the general public
about the insurance industry and making recommendations based
on them; writing policies that regulate the insurance market; and
ensuring that insurance companies are properly capitalised so that
they can pay their claims. Premiums are always paid annually or on
a monthly basis. This depends on the terms and conditions of the
agreement between the health insurance service provider and the
clients or the insured (ibid.).

CHALLENGES AND OPPORTUNITIES 79

6.9.2. Community-Based Health Insurance Schemes
Community Health Insurance (CHI) Schemes are voluntary
arrangements, organised at community level, that target people
employed in the formal sector. They aim at improving people’s
financial access to health care. They run on a non-profit basis and
apply the basic principles of resource pooling and risk sharing with
community participation in design and management (Basaza, Criel
and Van der Stuyft, 2008). Most of the private not-for-profit health
facilities in Uganda charge user fees to cover the financial gap left by
the government and external donors. However, most of the poor are
still excluded from accessing health-care services. In such cases,
Community-Based Health Insurance Schemes are preferable to user
fees at public healt facilities but not easy to implement in poor rural
areas and in the informal sector. As indicated above, Uganda plans
to introduce a National Social Health Insurance Scheme mainly
focusing on the formal sector where contributions can be deducted
from the monthly salaries, though the inclusion of the informal
sector is not yet clear (Platform for Health Insurance for the Poor,
n.d.).45

Over the years, the Government of Uganda, specifically the Ministry

of Health, has been exploring alternative health financing strategies
that would ensure access to health services by citizens, especially
the poor. In 1995, the Ministry of Health, through the Planning
Department, reviewed options for health-care financing and one of
them was community financing, specifically health insurance through
pre-payment. The Ministry of Health piloted the first Community-
Based Health Insurance Scheme known as the Kisiizi Hospital Society
Health Plan. At this time, the government health financing policy
still stipulated cost-sharing where citizens contributed user fees to
access public health-care services in government health facilities
(Community Health Financing Association for Eastern Africa, 2006).
Therefore, the first Community-Based Health Insurance Scheme in
Uganda was set up in 1996 at a rural hospital in Kisiizi. Following
the establishment of this scheme, many Community-Based Health
Insurance Schemes (CBHIs) have been established, including the
Community-Based Scheme and Save for Health Uganda (Munno mu
Bulwadde). The majority of schemes are hospital-based, run (and

45 See http://www.hip-platform.org/projects/project-overview/community-health-
insurance-in-uganda [Accessed on 15 November 2014]

80 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

largely owned) by the hospitals themselves, with the exception of the
Save for Health Scheme which is run and owned by local communities
(operating in Luweero, Nakasongola and Nakaseke districts). Most
of the schemes were started jointly by the Government of Uganda
through the Ministry of Health and various donors, including DFID
and USAID. The support provided to the schemes by the Ministry of
Health included basic training and technical assistance in the scheme
design. In addition, the majority of the funds for the schemes were
provided for deficit funding and for meeting operational costs such
as computers, sensitisation and purchase of stationery (Basaza,
Criel and Van der Stuyft, 2008).

The Uganda Community Based Health Financing Association

(UCBHFA) and Save for Health Uganda (SHU) have been key
umbrella organisations for running Community Health Insurance
Schemes in Uganda. These organisations coordinate, promote,
conduct research and build the technical capacities of community-
based health insurance initiatives in Uganda. As of 2012, the Uganda
Community Based Health Financing Association was running a total
of 25 schemes with a total coverage of 108,939 beneficiaries46
(UCBHFA, 2012).

Save for Health Uganda is also running a community health financing

programme. The objective is to improve access to health-care
services by expanding and extending well managed health micro-
pre-payment schemes to target communities. Specifically, the
programme aims at improving access to quality health-care facilities
and services where communities are supported to create community
health financing schemes which then provide health insurance to
the member families. With an insurance card, a family member can
access all out-patient services and all admission services including
surgery, unless the service cannot be offered at the contracted
facility. The community health insurance financing schemes are
supported to contract service providers and, on a monthly basis,
to pay for the medical service offered to the scheme members.
Secondly, the community health insurance financing programme
aims at protecting families from catastrophic health problems. This
is because the Community Health Insurance Schemes place no limit
on the number of episodes presented to a health-care facility per
member during the covered year and for each episode of illness

46 Refer to the Annex

CHALLENGES AND OPPORTUNITIES 81

presented at the contracted facility, the scheme pays between USh
150,000 and 250,000 (Save for Health Uganda, 2014). Save for
Health Uganda also provides both health and insurance education
in the target sub-counties to help them rationalise their health-care
seeking behaviours and to join the Community Health Financing
Scheme for protection. Save for Health Uganda promotes three
types of this scheme. These are pure insurance schemes (medical
bills are covered by the scheme), pure credit schemes (medical bills
are cleared by the scheme but become a loan to the family) and
mixed insurance and credit scheme (part of the bills is covered by
the scheme while part becomes a loan) (ibid.). As of 2013, Save for
Health Uganda had a total of 74 running community health financing
schemes47 (Save for Health Uganda, 2014a).

Community Health Insurance Schemes face a number of challenges.

For example, the Uganda Community Based Health Financing
Association still has a very small resource base and remains
dependent on donors; and there is a weak information management
system at the scheme level which hampers and causes delays in
reporting. There is also low coverage of the schemes. For example,
the UCBHFA currently runs 25 schemes with a total coverage of
108,939 beneficiaries, which is less than 1% of the population of
Uganda (UCBHFA, 2012). In addition to the above, Save for Health
Uganda faces two major challenges in the promotion of Community
Health Insurance Schemes. Firstly, there has been low motivation
of the volunteer scheme leaders. The Community Health Financing
Schemes are self-managed, rely heavily on the volunteer elected
leaders who sensitise and enrol members, collect premiums and
verify health-care bills, among other activities. Secondly, there
has been a reduction in income in some regions, such as western
Uganda, owing to banana wilt that has not been quickly contained.
Many families cannot afford to pay for the schemes, whereas those
who paid struggle and indeed pay late (Save for Health Uganda,
2013).

Both Private Health Insurance and Community-Based Health

Insurance Schemes are an alternative to health-care financing in
Uganda despite the lower coverage. According to the principal health
economist in the Ministry of Health, only 1.5% of the 34.9 million
Ugandans have health insurance cover (Kagolo, 2014). Currently in
47 Refer to Annex

82 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Uganda, private health insurance is usually paid for by employers
in few private firms, whereas the Community Health Financing
Schemes coverage remains limited to the central and southwestern
regions of Uganda.

6.10. Informal Social Security Systems in

Uganda
Informal social security systems remain vital in the rural communities
of Uganda where access to formal social security schemes is limited
or even not available. Historically, the informal social security
systems have been in place for many years globally. People have
looked to their families, clans, communities, tribes, religious groups
and authorities to meet their needs for social security whenever
they have encountered risks and vulnerabilities. In Uganda, informal
social security systems include both traditional systems of extended
family, kinship and community support – self-help schemes, mutual
burial groups, cooperatives, market associations and SACCOs,
among others (Ouma, 1995; Kyadondo and Mugisha, 2014).

Kasente (2006) reports that the majority of the population in the

African region, particularly self-employed women and men, are
protected by informal social security systems with benefits being
either in cash or in kind. This is because the public social security
measures meet the needs of less than 25% of the population, with
the majority being men. Kasente (2006) (citing Kaseke, 2009)
states that the majority of the informal social security systems
observe the principles of risk-sharing and pooling resources as well
as membership and shared obligations. The formal schemes are
mainly urban-based and cover a small percentage of the population.
Therefore, the majority of the population in Africa in general, and in
Uganda in particular, rely on informal social security systems.

Traditional social security systems depend a great deal on

collectivism within the society. Bukuluki (2013), citing Verhoef and
Micheal (1997: 396 cited in Ikwenobe, 2006 and Hofstede, 1991),
states that in collectivism, an individual is obliged to contribute to
the community, not only because it is expected of him or her but
because the ‘community is him or her’. The concept of a person in
the African collectivist world-view is ‘first and most importantly that
of the community…this means not that the individual is selfless, but

CHALLENGES AND OPPORTUNITIES 83

that the self is the community’ (Verhoef and Micheal, 1997: 396
cited in Ikwenobe, 2006).

However, globally these systems are declining and weakening. There

this decline has been attributed to a number of factors by various
scholars. These include urban-rural migration, violent and armed
conflicts, industrialisation, the HIV/AIDs epidemic, and the adoption
of the western lifestyle, among others (Ouma, 1995; Kyadondo and
Mugisha, 2014; Lwanga-Ntale, Namuddu and Onapa, 2008). In
addition, mutual social support systems been ‘weakened’ and this
has been attributed to colonialism and its version of modernization
(Ouma, 1995). However, inadequte evidence exists to show that
colonialism weakened traditional social security systems.

The effectiveness of the informal social security schemes that are

currently in existence are limited by their low capital base, owing to
the small contributions made by members, and the limited financial
management skills. In addition, the informal social security systems
based on kinship tend to exploit women for the benefit of other
family members, without guaranteeing their own social security
(Kasente, 2002). However, while these informal social security
systems have deteriorated in terms of effectiveness, they have been
and continue to be useful in small communities and mainly the rural
areas of Uganda. They remain scattered, highly uncoordinated and
only target small pockets of people, especially in the countryside
(Ssanyu et al., 2013; Kyadondo and Mugisha, 2014). Contrary to
the above, it has been reported that the informal social security
systems are not confined to rural areas but reach out into peri-
urban and urban areas as well, partly via maintained urban-rural
linkages (Verpoorten and Verschraegen, 2008). It should also be
noted that even those benefiting from the formal social security
systems still access the informal social support systems to provide
social protection in the most pressing eventualities, such as the
death of relatives (Twimukye, 2011).

Social Protection Life Cycle approach and the gaps in

Uganda’s social security systems
As already reflected in the conceptual and analytical section, there
are a number of risks and vulnerabilities across the life cycle, the
social security systems in Uganda as discussed in Chapter 6 attempts

84 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

to respond to some of the risks and vulnerabilities. However, there
are a number of gaps that need to be addressed.

Early years of childhood (0-11 years): In its current state,

Uganda lacks comprehensive social security systems to respond to
the risks and vulnerabilities that are rampant at that stage. There
has been an attempt to pilot vulnerable family grants under the
SAGE programme targeting vulnerable and marginalised children,
such as orphans, but coverage is still limited to a few selected sub-
counties in 15 districts. However, Uganda can learn from other
countries such as South Africa that initiated child support grants. In
addition, social assistance and social insurance are very relevant at
this childhood stage. The benefits improve the standards of living
for the children at this stage. However, these schemes are limited
in coverage. For example, social assistance in the form of senior
citizens grants is still being piloted whereas the pensions target
only those in the formal sector, which excludes a large proportion of
those in the informal sector.

Young and middle adults (20-40 years): This is a development

stage where the majority of the persons are in the working age.
These face a number of risks and vulnerabilities while at work
such as injury, unemployment, sickness etc. Uganda enacted a
law on workers’ compensation but there are challenges relating to
enforcement, especially in the private sector. Public works schemes
also exist, though they target only a limited number of persons,
especially in the northern region. Uganda lacks unemployment
insurance schemes for the unemployed of working age, which
makes many people remain unemployed for a long period of time
or get employed in the informal sector. Instead, the government
has established complementary programmes such as the Youth
Livelihoods Programme (YLP) to curb youth unemployment. There
are a number of social security insurance schemes that Uganda
could adopt to target this age bracket, such as unemployment
insurance, enforcing workers’ compensation, and sickness and
invalidity benefits. Given the fact that Uganda’s working population
is primarily employed in the informal sector, the Government of
Uganda can initiate a number of social security schemes, such as
mandatory contributory schemes, or learn from the Mbao scheme�

CHALLENGES AND OPPORTUNITIES 85

for the informal sector in Kenya. In addition, government-financed
social assistance schemes in the form of disability grants, child
support grants for the children of working citizens, family allowances
as well as expanding the coverage of mandated contributory social
insurance are very relevant for catering for this age group.

Older persons (50 and above years): Uganda has made

considerable progress in initiating social security schemes for this
age bracket. Uganda’s three tier pension system provides well for
risks and vulnerabilities for this age bracket. This includes the Public
Service Pension Schemes, NSSF and the voluntary pension schemes.
This also contains social assistance in the form of direct income
support that is being piloted in 15 out of 112 districts. Therefore,
the Government of Uganda has to expand the coverage of the social
insurance schemes to cover the informal sector as well as rolling out
the senior citizens grants for the poor older persons.

86 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

7.0. Gender and Social Security in
Uganda
Access to social security should be equitable among men and
women in the world. However, it has remained unequal because
of the gender inequalities in the labour market, given the fact that
the majority of women work in the informal sector. In the informal
sector women can easily combine work with their heavier burden
of family responsibilities, and partly for other related reasons, for
example the discrimination encountered in the formal employment
sector (ILO, 2001). According to UBOS 2010, only about 4.8% of
women are employed in the formal sector, of whom about 95% are
found in the private sector or the self-employed and informal sector.
The social security framework only covers workers in formal sector
employment (public and private) and remains silent on the self-
employed and people working in the informal sector who account for
the bulk of the labour force (ILO, 2012).

In Uganda, women have limited income-earning opportunities, as is

the case with the rest of the low-income countries. Such gender gaps
in earning opportunities have implications not only for household
welfare but also for access to social security (Kasirye, 2011). As
Kasente (2006) reports, very few women in the African region have
access to formal social security because they work in the informal
and agricultural sectors. Furthermore, she reveals that women’s
access to formal security is through marriage to a male salary or
wage earner. Kasente cites Folbre (1993), who states that access to
social security by women reflects the traditional male bread-winner,
female dependant and nuclear family model.

Uganda is characterised by a large informal sector, with over 80%

self-employed – with the proportion being higher for female workers
(61%) than their male counterparts (46%) – and by 72% in the
agricultural sector. This is worse among the women in Uganda, at
77% as compared to males at 67% (UNHS, 2012/13; MFPED, 2014).
Women in Uganda account for more than half of the total labour force
but they nonetheless account for only 37% and 29% of the labour
force in the public and the private sectors respectively. According to
the 2008 Gender and Productivity Survey (GPS), four out of every
five women in Uganda are employed in agriculture and 42% of the

CHALLENGES AND OPPORTUNITIES 87

women in the labour force are unpaid family workers receiving no
income despite contributing the largest proportion of the agricultural
labour in the country (EPRC, 2009). Women’s lower representation
in the public and private sectors may be partly explained by women’s
lower education attainment and, to some extent, by time demands
attributed to reproductive activities (Kasirye, 2011). Work in the
informal sector is often intrinsically hazardous and the fact that it
takes place in unregulated environments makes it still more difficult
for women to access social security benefits. Women face additional
disadvantages due to discrimination related to their reproductive
role, such as dismissal when pregnant or upon marriage. Women in
the informal economy do not benefit from safeguards and benefits
related to child-rearing that in principle apply to women in formal
wage employment (such as family allowances, paid maternity leave,
nursing breaks or assistance with the cost of child care) (ILO, 2001).
However, there is need to appreciate the SAGE programme under
the ESP programme that provides senior citizens grants to older
persons – both men and women.

According to the ILO Covenant 102 on the Minimum Standards of

Social Security (1952), which covers a wider scope of social security,
maternity benefits for working women are recognised with a view
to addressing maternity protection. In 2000, ILO adopted the new
Maternity Protection Convention (C 183), prompting the formation
of a National Steering Committee in Uganda to advocate increasing
the duration of maternity leave and extending maternity leave to
all working women in Uganda. In addition, legislative amendments
were made that culminated in the enactment of the Employment Act
that provides job protection and maternity leave for all employed
women. However, despite the principles of the ILO Convention, the
Employment Act does not apply to women employed in the informal
sector yet these represent the largest proportion of working women
in Uganda, as seen above (ILO, 2012).

From the above, it can be concluded that the majority of the working
population (both men and women) in Uganda are excluded from
formal social security benefits in case of risks and vulnerabilities
and the situation worse for the women. Those formally employed in
the public and the private sectors and covered by the social security
schemes (specifically the Public Service Pension Scheme and the
National Social Security Fund) are fewer than 10% of the working

88 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

population out of a total of 13 million. This leaves over 90% of the
working population not catered for by any form of comprehensive
social security scheme (World Bank, 2014b). The pension sector
reforms in Uganda will be relevant in extending social protection
coverage to the informal sector.

CHALLENGES AND OPPORTUNITIES 89

8.0. Financing Social Security in
Uganda
Social security financing is a key constraint in many developing
countries. Globally, expenditures on social security remain lower
(2.8%) in Africa than in any other region. This is mainly because of
the limited financial resources available in many countries. Social
security expenditure in relation to a country’s GNP is considered a
reliable indicator of the level of social sector development in that
country (World Bank, 2012; Bastagli, 2013). In countries where a
large part of the GNP is spent on social security schemes, inequality
and poverty levels will be lower than in countries where a smaller
part of the GNP is spent on social security (Bastagli, 2013). Within
Africa, there are significant variations in social security spending.
The regional average of 2.8 % of GDP disguises a wide range of
expenditures in different countries, from highs of over 12 and 8% of
GDP in the Seychelles and South Africa respectively to lows of under
0.5% of GDP in Chad, Sudan, Guinea, Niger, Uganda and Zimbabwe
(World Bank, 2012).

The low levels of expenditure are a reflection of the low levels of

public resources that are available in African countries, especially
for social programmes. Some scholars have argued that committing
significant resources to finance social protection amidst a high
incidence of poverty and extreme poverty would generate large
and long-term liabilities beyond government budgetary capacities
(Barrientos, Hulme, Nino-Zarazua and Hickey, 2010). It is urged
that even if social security programmes are adopted with 1% of GDP
spent on schemes, it may be challenging to achieve in situations
where the government tax collection capacity is still very limited.
For instance, Uganda collects around 13% of GDP in taxes, and a
1% of GDP allocation to social security would involve a significant
expenditure switch or additional resource mobilisation (ibid.).

Social security financing in Uganda has been mainly focusing on

social insurance in the form of pensions for former civil servants.
By 2013, about USD 249 million was spent on social security which
accounts for 1.2% of GDP. Most of the social security spending was
on contributory social security schemes. Contributory social security
(PSPF and NSSF) amounted to about 57% of all spending on social

90 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

security, 35% was spent on direct income support programmes
(SAGE) and 8% on social care and support services (MGLSD, 2014c).
However, the total spending on social security has been fluctuating
between 0.6% and 2.2% of GDP from 2006/07 to 2011/12. This
variation in spending has been mostly driven by an increase in
spending on the Public Service Pension Fund (with spikes in 2007/08
and 2008/09) (Wylde, Ssewankambo and Baryabanoha, 2012).
However, current spending in Uganda is still far below the regional
average (2.8% of the GDP) compared to other African countries
such as Seychelles (12%) and South Africa (8% of the GDP) (World
Bank, 2012, 2014).

In addition to government spending (35%) on social security in

Uganda, current estimates indicate that in 2013 donors contributed
42%, especially to the direct income support schemes and social
care services. The individuals, especially members of the NSSF,
make a contribution of 23% to financing social security in Uganda.
Social security expenditures by the government are principally on
the Public Service Pension Fund, with a small allocation to social
care and support services (MGLSD, 2014c).

8.1. Social security spending on the Public

Service Pension Fund (PSPF)
The Government of Uganda allocates PSPF the largest share of the
social security schemes budget (35%) compared to the other social
security schemes (social cash transfers and social care services
together). Therefore, the PSPF contributes a significant proportion
of spending on social security, which amounts to 0.4% of the GDP
(MGLSD, 2014c). Furthermore, Huda et al. (2013) report that
pensions take up over 3% of the total government budget and in
some years it increased to over 6% when backlogs of arrears were
paid.The scheme is non-contributory in nature and it is currently
fully funded from government tax revenues – particularly from the
consolidated fund. Since 2006, the funding has been fluctuating as
shown in Figure 2 above (Office of the Auditor General, 2010).

CHALLENGES AND OPPORTUNITIES 91

 Pension Releases (Billion Shillings)
300

250
Recurrent (Billion
shillings)
200

Arrears (Billion shillings)

150

100 Total (Billion shillings)

50

0
FY 2006/07 FY 2007/08 FY 2008/09

The total expenditure on the Public Service Pension Fund between

financial year 2007/08 and 2011/12 was USh 1, 485 billion (Huda et
al., 2013). In the financial year 2009/10, the Auditor General carried
out a forensic audit and USh 113 billion was verified as pension
arrears, which were provided for and paid in the 2010/11 budget. In
the financial year 2010/11, a total of 17, 189 beneficiaries were paid
pension arrears. This reduced the overall pension arrears liability
by 78% instead of the targeted 80% that had been planned. In the
financial year 2010/11, therefore, pension arrears worth USh 113
billion were paid; USh 218.1 billion was paid as gratuities to 16,021
pensioners and over USh 14.7 billion was paid ex gratia to 17,781
veterans. Monthly pensions worth USh 5.0678 billion was paid
to veterans/the military; teachers were paid USh 38.910 billion;
traditionals were paid USh 67.838 billion; widows and orphans
were paid USh 25.157 billion and former heads of state were paid
USh 264.8 billion. In financial year 2011/12 USh 68 billion was
provided to cater for the outstanding gratuity arrears. However, it
was reported that this amount was not sufficient to meet all the
pension obligations as a result of an increase in the military and
local government claims (Ministry of Public Service Ministerial Policy
Statement, 2011/12).48
48 See http://www.publicservice.go.ug/public/Ministerial%20Policy%20Stategy%20
2011-2012.pdf

92 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Projections indicate that government expenditure on the fund is
likely increase in the long run to 1.1% of GDP. This implies that a
percentage of the government’s budget expenditure on the PSPF will
increase from the current 2-3% to an estimated 10%. This leaves
the Government of Uganda with a fiscal burden of about USD 4.9
billion or over 23% of GDP as accrued liabilities to the beneficiaries of
the PSPF (MGLSD, 2014c). The high pension fiscal burden in Uganda
is partly attributed to the features of the PSFP, which makes it quite
generous compared to other countries, and the increasing size of
the public service, which has raised the cost of the public sector
pensions (ibid.). However, as discussed in the previous sections, the
Government of Uganda is considering pension reforms, including
the PSPF, to ensure financial sustainability in the longer term.

8.2. National Social Security Fund (NSSF)

Financing the NSSF in Uganda has been mainly through contributions
by both the employers and the employees. Member contributions have
grown by 14% from USh 558 billion in financial year 2012/2013 to
USh 638.2 billion in financial year 2013/2014. This is complemented
by a compliance level of 77%, with USh 53 billion on average being
contributed monthly to the fund and with some months registering
a collection as high as USh 60 billion. In addition, the fund’s interest
credited to members’ accounts has increased from USh 278 billion
in financial year 2012/2013 to USh 366 billion in financial year
2013/2014. Therefore, the interest credited to members’ accounts
has increased by 33%. The NSSF has lived up to its promise of
delivering competitive returns to its members. In 2013, the fund
declared a rate of 11.5% interest to be paid to its members. It is
reported that this rate is above the 10-year average inflation rate of
9.23%. Similarly, compared to the Bank of Uganda (BoU) and other
commercial banks, the 11.5% interest rate is above the average
11.2% BoU rates for the 364-day treasury bill, above the average
11.3% interest rate offered on the 7-12 months fixed deposits and
the average 3.3% interest rate offered by commercial banks. The
NSSF benefits paid to members have also grown by 18.5% from
USh 140 billion in financial year 2012/2013 to USh 165.9 billion in
financial year 2013/14 (NSSF, 2014).

CHALLENGES AND OPPORTUNITIES 93

The NSSF has invested in Uganda’s economy, whose assets base
has grown by 26% from USh 3.5 trillion in financial year 2012/2013
to USh 4.4 trillion in financial year 2013/14. The fund has three
investment vehicles. These are fixed incomes registering USh 2.7
trillion (81%), equities registering USh 391 billion (13%) and real
estate registering USh 175 billion (6%). According to the NSSF
managing director, Richard Byarugaba, ‘The fund has played a
leading role in Uganda’s economic development and has over the
years provided liquidity for the long term lending in the country’s
financial sector’ (New Vision, 2013 a).

8.3. Direct income support

Until 2010, social assistance in the form of direct income support in
Uganda mainly concentrated on conflict-affected and agriculturally
marginalised areas in the northern region of the country through
recovery programmes such as the Northern Uganda Social Action
Fund (NUSAF), which is a government programme supported by
loan finance from the World Bank that started in 2003. There were
also other donor-financed programmes with elements of agriculture
and livelihoods improvement. These programmes were mainly
developmental but with an element of direct income support through
public works programmes (Cammack and Twinamatsiko, 2013). In
2010, SAGE, which is another form of direct income support, was
approved by the Government of Uganda.

Financing social assistance in the form of direct income support

schemes remains low in Uganda compared to other low-income
African countries. According to the MGLSD (2014c), by 2013, the
total spending on direct income support amounted to USD 88 million,
equivalent to 0.40% of GDP, which is low in comparison to the 1.1%
spent on social assistance in low-income countries in Africa (see the
figure below), and far below the 1-2% of GDP spending on social
assistance globally. Despite the limited allocations (0.40%) spent
on the direct income support programmes in Uganda, the amount is
not insignificant because it is almost 10 times the budget currently
allocated to the social development sector. The amount has been
compared to allocations to the energy and mineral sectors in 2013
(MGLSD, 2014c).

94 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 Figure 3: Spending on social safety nets as a percentage
of GDP, including government and donor resources, for
selected countries

Source: Monchuk V (2014) in MGLSD, (2014c)

Within the direct income support expenditures, 28% is allocated to

public work schemes and 41% to complementary social protection
programmes (including food or nutrition programmes, agriculture
etc.), expenditure on which amounted to 0.64% of GDP in 2013
(Wylde, Ssewankambo and Baryabanoha, 2012). While food aid
has been the main form of direct income support financed by
donors in Uganda, in 2010 the Government of Uganda approved the
establishment of the Expanding Social Protection (ESP) programme
in recognition of the need to establish a coherent policy and fiscal
framework for broader social protection in Uganda.

Under the ESP programme the Social Assistance Grants for

Empowerment (SAGE) programme was developed. The SAGE
programme is being supported financially by DFID, UNICEF and Irish
Aid, and this involves the establishment of ESP, policy development
and the payment of the cash transfers for the duration of the pilot
programme. The current funding level is £41 million (about USh
160 billion) for a five-year period – 2010-2015. The existing donor
commitment ends in March 2015 (Bukuluki and Watson, 2012). In
addition, the Government of Uganda entered into a Memorandum
of Understanding (MoU) with donors to provide some counterpart
funding. Starting from the financial year 2011/12, the government

CHALLENGES AND OPPORTUNITIES 95

committed itself to providing USD 50,000 plus in-kind support
estimated at USh 6 billion over the five years of the programme
(MGLSD, 2012). In financial year 2011/12, the government
contributed only USh 30 million of the USh 125 million committed;
in financial year 2012/13, the Ministry of Finance, Planning and
Economic Development allocated only USh 39.5 million; whereas
in financial year 2013/14, a total of USh 2 billion was allocated to
finance the SAGE programme (specifically the Senior Citizen Grants)
in Yumbe district (ESP, 2013). However, based on the MoU, the
government has not fulfilled the terms of counterpart funding of the
SAGE programme, as indicated above. By the end of the pilot phase,
the Ugandan government contributions are expected to reach at
least USD 900,000 per year under the following arrangements.

Table 5: Counterpart funding between the Government of

Uganda and development partners

2011 2012 2013 2014

£20,030 £143,000 £540,800 £1,388,700

Source: SAGE MOU in Cammack and Twinamatsiko (2013)

The financial allocations under the MGLSD for the vulnerable groups
increased from USD 3.0 million in 2008/09 to USD 14.5 million
in 2012/13, with much of the increase in 2011/12 being due to
the launch of the SAGE programme that is almost fully funded by
DFID (Rukundo, 2013). However, in November 2012, there were
significant changes in the payment modalities for the operational
expenses for the SAGE programme. Previously, the operational costs
were paid through MGLSD bank accounts and the District Community
Development Offices. Following the audit report detailing serious
irregularities and misuse of funds in the office of the Prime Minister,
the donor community instituted a suspension of aid which resulted
in SAGE payments flowing only through bank accounts controlled by
Maxwell Stamp (Cammack and Twinamatsiko, 2013).

Since the launch of the SAGE in September 2011, the programme

has disbursed in total over USh 50 billion in monthly grants through
the MTN Mobile Money service (MGLSD, 2014a).

96 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

8.4. Workers’ Compensation
The Government of Uganda, through the Ministry of Gender,
Labour and Social Development (MGLSD) also pays claims for
workers’ compensation for public sector workers. However, there
are no funds budgeted for financing this purpose. Therefore,
payments are made on an ad hoc basis and funded by the Ministry
of Finance, Planning and Economic Development, which transfers
the funds to the MGLSD for payment to beneficiaries. The reliance
on such non-budgeted expenditures inevitably resulted in severe
budget constraints and the build-up of a large amount of arrears
(Wylde et al., 2013). According to the Uganda Social Protection
Public Expenditure Review, USh 2.5 billion was spent on workers’
compensation between 2007/08 and 2011/12.

CHALLENGES AND OPPORTUNITIES 97

 Table 6: Level and trend of social protection in government expenditure

98
2006/7 2006/7 2007/8 2007/8 2008/9 2008/9
Budget Actuals Budget Actuals Budget Actuals

Social insurance 116,900 120,115 264,753 265,562 189,285 189,386

Regular transfers - - - - - -

Social care 2,772 2,690 5,566 5,261 1,728 1,722

Policy - - - - - -

Total government SP
119,672 122,805 270,319 270,824 1,758 191,108

Total GoU
3,890,652 3,579,087 4,599,160 4,067,308 5,998,957 5,272,399
expenditure

2009/10 2009/10 2010/11 2010/11 2011/12

Budget Actuals Budget Actuals Budget
Social insurance 115,390 231,176 306,038 363,442 317,636
Regular transfers - - - - 1
Social care 881 825 1,211 957 992

THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Policy - - - - -
Total government
SP 116,271 232,001 307,249 364,399 318,629

Total GoU expenditure

6,810,380 6,332,448 9,820,100

Source: Wylde, Ssewankambo and Baryabanoha (2012)

8.5. Social security donor financing in
Uganda
The donors have been a major source of financing for social protection
programmes, especially direct income support in the form of cash
transfers, social care and support services and complementary
programmes in Uganda. An analysis of ministerial budgets for the
Office of the Prime Minister (OPM) and the MGLSD with specific focus
on social protection programmes shows that the overall budgetary
allocations consistently increased from USD 43.5 million in 2008/09
to USD 72.2 million in 2012/13. Special programmes under the OPM
targeting social welfare and infrastructure intervention, including
cash transfers, cash for food and other community infrastructures
through public works programmes accounted for a larger proportion
of social protection budgets increasing from USD 31.1 million in
2008/09 (71.5%) to USD 56.1 million in 2012/13 (73.6%). The
main donor-funded programmes were the World Bank-funded
Northern Uganda Social Action Fund (NUSAF) and the European
Union-funded ALREP and KALIP, among others. On the other hand,
budget allocations for social protection programmes for vulnerable
groups under the MGLSD increased steadily from USD 3.0 million
in 2008/09 to USD 14.5 million in 2012/13 as a result of launching
the SAGE under the ESP programme, which is almost fully funded
by DFID (Rukundo, 2013). It has also been reported that donors
finance 80% of the social care services budget that is another pillar
of social protection in Uganda, with about 64% being financed by
USAID (MGLSD, 2014c).

However, it has been observed that, although the MGLSD is the main
government institution charged with social protection alongside civil
service pensions, the ministry does not appear on the list of seven
major funded government ministries. It only accounts for one-half
of 1% of government expenditure (Cammack and Twinamatsiko,
2013). In addition, the ministry budget relies heavily on external
funding, as shown in the table above. The external financing has
been mainly dominated by food aid expenditure, which outstrips
all other spending over the period by almost 10 times. It has
been observed that food aid peaked in 2008/9 and 2009/10 with the
emergency programme responding to the drought in Karamoja over
the years (see Table 2 below).

CHALLENGES AND OPPORTUNITIES 99

The dependence on donor funding in the MGLSD and lower budget
allocations indicate that there are strong competing demands on
government spending allocations, which results in social protection
spending receiving lower priority. This is partly because social
protection, especially cash transfers, is regarded as ‘welfare
handouts’ or ‘charity’ that consumes scarce public resources and
generates no real economic return (Cammack and Twinamatsiko,
2013).

100 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 Table 7: Social protection donor financing financial year 2006/7 to 2011/12
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12
Actuals Actuals Actuals Actuals Actuals Budget
Denmark 0 0 - - - 7,260,392,115
VfW 0 0 - - - 7,260,392,115
DAR 0 0 - - - 4,768,698,846
RALNUC 0 0 - - - 2,491,693,269
DFID 0 0 - - 5,949,958,294 11,616,192,551
Cash
Transfer 1,184,824,294 11,616,192,551
(ESP)
CfW
0 0 - - 4,765,134,000 -
(NUSAF)
EC 0 0 - 7,276,791,040 - -
CfW/IGA
0 0 - 7,276,791,040 - -
NUREP
Norwegian
0 0 97,317,000 1,196,817,220 - -
Embassy
CfW
0 0 97,317,000 1,196,817,220 - -
(LEARN)
WFP 0 0 19,399,896,248 540,605,892,289 168,512,630,914 39,472,205,392
CCT
(Karamoja 0 0 - 1,266,025,410 4,573,777,538 -
ECD)
CfW (WFP
0 0 - 5,787,183,626 5,863,941,923 -
PRRO)
FfW/CfW
0 0 - - 9,240,073,339 9,569,367,494
(KPAP)
Food aid 0 0 19,399,896,248 533,552,683,253 148,834,838,113 29,902,837,898
WFP CP 0 0 - - - -
WFP
0 0 50,967,419,550 93,822,067,302 44,339,138,676 -
Emergency
WFP PRRO 0 0 368,432,476,698 439,730,615,952 104,495,699,437 29,902,837,898
World Bank 8,948,740,500 42,332,152,200 1,844,894,400 3,868,000,000 11,232,528,515 -
CfW
8,948,740,500 42,332,152,200 1,844,894,400 3,868,000,000 11,232,528,515 -
(NUSAF)
Grand Total 8,948,740,500 42,332,152,200 21,342,107,648 552,947,500,549 185,695,117,722 58,348,790,059

CHALLENGES AND OPPORTUNITIES 101

Source: Wylde, Ssewankambo & Baryabanoha (2012)
From the above, it can be concluded that social security spending
remains low in Uganda. However, it such spending can be financed
from a combination of resources, including domestic, private and
donor funds as well as remittances. Domestic resources through
taxes can be one of the best options for financing social security
in Uganda, provided that there are returns and accountability. The
other option for Uganda is the revenues from recently discovered
natural resources, specifically oil and gas, that if properly utilised
present an option for financing universal social security schemes in
the country.

102 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

9.0. Challenges of the Formal and
Informal Social Security Systems
The social security systems in Uganda have encountered a number
of challenges. This section of the paper will focus on challenges in
the both formal and informal social security systems.

9.1. Challenges in the Formal Social

Protection Systems
Lack of a reliable information management system: Formal
social security schemes have been faced with the challenge of
absence of reliable information such as a birth and death registration
(BDR) database. This has made it difficult for various institutions
providing the social security services to verify information such as
the correct age of beneficiaries. For instance, under the pensions
scheme age verification is particularly problematic in instances
where public servants alter their age entries either at joining
the service or during active service (to avoid being retired49 or
retrenched). Similarly, owing to the lack of comprehensive birth
and death registration data, the enrolment of senior citizens
grants beneficiaries under the SAGE began with a birth and death
registration exercise carried out by the Uganda Registration Services
Bureau in partnership with the Uganda Bureau of Statistics and the
line local government departments. However, some studies carried
out reveal that many potential SAGE beneficiaries failed to qualify
because it did not provide the information needed since people were
not informed about the purpose of the birth and death registration
exercise (Bukuluki and Watson, 2013). The absence of this reliable
information may affect the future enrolment of people who are
eligible for social security programmes. In addition, the NSSF
lacks a comprehensive register of organisations or businesses in
Uganda, which makes it difficult for the scheme to identify eligible
employers. Similarly, some employers understate theie employees’
salaries in NSSF schedules in order to remit less money. In addition,
information is lacking on the armed forces pensions. This in turn

49 For the PSPF, the minimum qualifying age is 45, with a compulsory retirement
age of 60. As for the NSSF, the members can access their lump sum payment at
the age of 55, or claim early access at the age of 50 if they can prove they are no
longer in employment (MGLSD, 2014c).

CHALLENGES AND OPPORTUNITIES 103

makes it difficult to accurately determine the future costs of the
scheme benefits (World Bank Economic Outlook, June 2014).

Inter-sectoral coordination challenges: The government,

through various ministries and agencies, is implementing social
security schemes. However, there is limited coordination among
the various agencies. Furthermore, some of the schemes are
fragmented and this has led to too few contributors being available
for each scheme (MGLSD, 2014c). Similarly, other private schemes
exist that operate side by side with the statutory arrangements, for
instance the Makerere University Staff Retirement Benefits Scheme,
the British American Tobacco Staff Pension Scheme, the Stanbic
Bank Staff Pension Fund and the Bank of Uganda Staff Pension
Scheme. Many schemes are problematic because most of them
unregulated despite the establishment of the Uganda Retirement
Benefits Regulatory Authority (URBRA).

Limited financial resources to finance social security schemes:

Gruat (1990), Guhan (1994) and Töstensen (2004) observed that
most of the developing countries, including Uganda, are faced with a
challenge of raising taxes. This has affected the expansion of social
security programmes (ibid.). Most low-income countries only collect
around 10-15% of GDP in taxes, and tax revenues from the richest
sections of the populations have certainly not been increasing
(Townsend, 2007). Similarly, employers and employees have often
escaped their responsibility to pay social security contributions
and, consequently, governments could not collect the appropriate
amount of money needed to finance social security programmes.
In Uganda, limited financial resources, especially at district level,
have led to delays in payments and, in some instances, pensioners
never get paid. As a result, many retired public servants who are ex-
employees of districts do not get their retirement benefits and live in
poverty despite their entitlement to a pension. At central level, the
pension scheme is also affected by outstanding pension claims. This
has been attributed to the non-contributory nature of the scheme
which does not allow it to accumulate enough funds to pay pension
for a lifetime. Apart from the limited resources, competing demands
in the government budget shift the attention from social security to
other policy fields such as education, infrastructure, economy and
health care. Consequently, the budget available is distributed across
different policy fields.

104 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Governance and mismanagement: Formal social security
schemes have also been affected by corruption and mismanagement
of beneficiary funds. For example, USh 169 billion meant to clear
the outstanding pension claims of 1,018 former East African
Community workers went missing between February and October
2012. The money is reported to have been siphoned through a
financial institution, with connivance from top employees of the
Ministries of Public Service and Finance (New Vision, 2012). In
addition, although the NSSF has grown in worth from a few billion
shillings to over a trillion shillings now, misuse and mismanagement
have increased over the years, where the management and the
government have abused the fund. There have been several dubious
and questionable investments undertaken by the fund. For instance,
in 2008, the NSSF bought land at an inflated price; and in this case
one of the fund directors was found guilty and convicted by the High
Court of Uganda for causing financial loss to the NSSF. Similarly,
projects such as the computerisation of the NSSF records have
been shoddy; and management also continues to mismanage the
fund and incur heavy administrative costs (Barya, 2011). Although
some officials have been indicted, the fund is still suffering from
internal strife, with almost all its managing directors being forced
out on allegations of corruption allegations, which has continued
to affect the operations of the fund. There have also been cases of
culpable mismanagement of pension records, particularly through
the enrolment of ghost pensioners in the system, which places
additional pressures on government resources. According to a report
by the Auditor General submitted to Parliament in December 2012,
a total of USh 165 billion (USD 66 million) was lost in the period
from 2009 to 2012 as a result of the fraudulent enrolment of 3,000
ghost pensioners. The problem led to the suspension and delay of
pension payments for approximately 60,000 retirees for up to a year
(World Bank Economic Outlook, 2014).

Lack of a redistributive component: The money obtained by

the pensioner is a function of the last salary scale of the officer
in question and the length of service. This could imply that if a
pensioner retired at a low salary, they would receive low pension
payments. This would culminate in low benefits for pensioners,
which are often too little to meet their basic needs. This has often
led to poverty among many pensioners, some of whom carry the

CHALLENGES AND OPPORTUNITIES 105

burden of looking after their sick children and taking care of their
grandchildren, many of whom are orphaned by HIV/AIDS.

Scope of coverage (population vs. benefits): Formal social

security schemes are also faced with the challenge of a limited
range of products or benefits as well as the population being covered
by the schemes. Gruat (1990) notes that formal social security
programmes seem to be confronted often with challenges related
to coverage in terms of number and categories of persons covered,
range of protection and the level of the benefits offered (Gruat, 199).
In Uganda, most of the schemes do not cover health, education and
insurance or invalidity benefits. For example, the pension schemes
have no mid-term or work-life benefits. Therefore, one must wait
till old age to qualify unless one is retrenched or opts for voluntary
early retirement (Barya, 2011). In addition, formal social security
schemes, such as social insurance, are mainly oriented towards
meeting future needs. It, therefore, ignores the immediate needs
of the poor. Amidst high poverty rates in developing countries such
as Uganda, where most of the population struggles to survive on
a daily basis, it makes little sense to focus exclusively on future
contingencies (Kaseke, 2000). Similarly, Townsend (2007) and
Adésina (2008) note that formal social security is mainly premised
on a formal employment status, where individuals typically have
earnings. Therefore, since the employment status is mainly reserved
for persons in public or semi-public institutions and official firms
in the economic and industrial sectors, the bulk of the population
is always completely excluded from formal social security. In
sub-Saharan Africa where Uganda is located, the majority of the
population work in the informal sector or in the agricultural sector,
thus have not benefited from formal social security programmes
(Gruat, 1990: 409). In addition, wages in Uganda, like in any
other developing country, are extremely low. This makes it difficult
for workers to contribute to any social insurance scheme as the
contributions take away income meant for meeting immediate
needs. This has, consequently, made workers reluctant to participate
in social insurance schemes.

Delays in processing benefits: Over the years, the public pensions

and NSSF schemes have been characterised by delays in processing
benefits for the members. For instance, the Office of the Auditor
General Report (2010) on the PSPF revealed that it takes on average

106 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

23 months for the traditional civil servants and 30 months for the
teachers to access the pension payroll, instead of the expected six
months. The initial procedure for processing the pension is too long.
Although pensioners are advised to submit their forms at least six
months before they resign or reach retirement age, the process is
still slow in responding (Barya, 2011). This is partly because of lack
of a communication strategy, the failure by the Ministry of Public
Service to use the existing records of retired officers to commence
timely pension processing and an unreliable pension information
management system.

9.2. Challenges of informal social security

The existing informal social security systems in Uganda are under
severe strain and, in many instances, have already collapsed, with
little prospect for their revival (Foster, 2000). The systems have over
time been affected by several challenges, including high illiteracy
levels, poverty, rural-urban migration as a result of industrialisation,
lack of support from the government, colonialism and economic
changes, persistent civil and violent conflicts, and commercialisation
of agriculture, which has also reduced incentives to maintain food
stores, since people have pressing needs that require cash.

Persistent civil conflict and insecurity: Since independence,

Uganda has witnessed a great deal of political turmoil and armed
conflict across the whole country. This has affected the functionality
of both the formal and informal social support systems. Of late,
the Lord’s Resistance Army (LRA) sowed terror and instability in
northern Uganda. This conflict led to the displacement of 1.6 million
people and the abduction of around 30,000 children. This conflict,
coupled with others, has had adverse effects, including the death of
family income-earners and the weakening of traditional institutions.
In addition, the LRA conflict led to people being confined in camps
and, consequently, the economic potential and opportunities of the
region were never fully developed. The population was, therefore,
not able to provide for their elderly parents or other dependants
as would be expected. Other forms of traditional social security
became inapplicable, as the displacement meant that social groups
or cooperative labour groups could no longer operate. People could
not go to dig and what had been harvested was stolen, hence
there were no means of returns (Kyadondo and Mugisha, 2014).

CHALLENGES AND OPPORTUNITIES 107

Other studies have shown that insecurity has threatened many
communities which used to have village grain banks, and farming
households that had granaries. Granaries were stolen and people
were forced to store food inside their houses, which means that they
store less food now. However, with the return of peace in the North,
people are resettling in their communities and traditional social
support systems are working in instances of shock and vulnerability.

Urbanisation: Informal social security systems have also been

affected by increasing urbanisation50 in Uganda partly because there
is less social cohesion in urban settings. A study by Kyadondo and
Mugisha (2014) reveals that what was happening in the past, where
the rich would share their resources with their poor family members,
was less common in urban areas. Communal life and cohesion was
stronger in rural areas.

Rapid population growth: Population pressure, especially in

rural communities, has led to a reduction in the size of agriculturally
viable land per person. In the face of low farm outputs, it is difficult
for families and communities to help those who are vulnerable.
Rural communities in the past were food baskets owing to what
communities regarded as predictable weather patterns. The
current low farm outputs are obtained amidst reported population
growth and high unemployment rates, which challenge the moral
imperatives to share with others even in times of great need.

High levels of poverty: Many members of savings groups find it

difficult to pay their contributions, partly because of poverty and
partly because of alternative demands on their labour and funds.
The demand for social security services has also expanded rapidly
owing to diseases (especially malaria, HIV/AIDS, TB and cancer)
and the high cost of living, thus weakening the capacity and
cohesiveness of the extended family and kinship systems to work
well. Traditional social security systems also face the challenges
of limited recognition and support from the government. The
traditional social security systems mainly depend on the limited
external remittances from urban migrants, especially aspiring
politicians and a few compassionate individuals. Amidst high levels
of poverty, monetisation of the economy has also greatly affected
the informal social protection systems, with social services being
50 An increase in a population in cities and towns versus rural areas

108 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

commercialised. Kyadondo and Mugisha (2014) report that almost
all public services, including health care, require money and in most
cases people are forced to borrow money for health care, with a lot
of interest charged.

Monetisation of life has complicated the provision of social security

because of the competing demands on money. Even when relatives
or family members feel that a vulnerable person (e.g. an aged
parent) ‘deserves’ support, this support might not be forthcoming
if resources are scarce. Moreover, the needs of the potential
provider would have ‘fundamental priority’ over those of the sick,
old or disabled. Therefore, as the close family members continue
to play their role in supporting their needy relatives, as a result of
increasing monetisation and commercialisation of services, in the
context of poverty, what they provide is simply symbolic support,
and not adequate to solve the problems relating to well-being for
vulnerable persons (Kyadondo and Mugisha, 2014).

HIV/AIDS epidemic: Among the diseases that have hit Uganda

hard, HIV/AIDS has greatly affected the informal social security
systems. It has been observed that families and communities,
though quite resilient, have been weakened by the HIV/AID carnage
(Ankrah, 1993; Lwanga-Ntale, Namuddu and Onapa, 2008; Ouma,
1995; Ntozi and Gipere, 1995). The epidemic has impacted on
traditional social security. HIV/AIDS has not only increased the
burden of those who need care from others, but also weakened the
existing traditional sources of care. As communities take care of the
sick within their families, they may not be able to help others within
the community. At the same time, the frequent deaths also drain
the family and community resources and weaken the capacity to
extend help to those who are vulnerable. Therefore, in this context,
families may experience a high burden of care and this negatively
affects their willingness to help others. The poorest households are
most likely to resort to non-reversible coping strategies, including
the sale of land or livestock or the withdrawal of children from
school. This is likely to create an inter-generational poverty circle
(Kyadondo and Mugisha, 2014).

Like in any other developing country, in Uganda, modernisation

and the adoption of the Western middle class values have also
greatly affected the informal social protection systems. Several

CHALLENGES AND OPPORTUNITIES 109

studies have shown that the deteriorating influence of the kinship
and clan systems is a result of ongoing modernisation among the
developing countries including Uganda. Kyadondo and Mugisha
(2014) reveal that, although the immediate family (nuclear family)
is acknowledged as still strong, the extended family is said to be
dying out as the clan system dies out. In this study, it was noted
that clan leaders are economically struggling and thus failing to
mobilise and organise clan activities. For example, clan leaders
might fail to feed the clan members invited for meetings, unlike in
the past where food for ceremonies was free. Furthermore, currently
several of the richer members of clans are less willing to use their
resources for clan activities. In addition, the desire for a middle
class lifestyle has deprived those who need support because many
people have become less willing to share resources to meet the
needs of the extended family members (UNICEF, 2003; Nyamukapa
and Gregson, 2005; Ntozi and Mukiza-Gapere, 1995).

Despite the challenges, informal social security mechanisms still

play an important role, especially for individuals and families in
extreme poverty, in mitigating their vulnerabilities, risks and shocks,
alongside the formal social security mechanisms (Ankrah, 1993;
Chirwa, 2002; Abebe and Aase, 2007; Bukuluki, 2008).

The increased investment in formal social security systems by the

government is perceived by some scholars as likely to contribute
to the deterioration and inadequacy of traditional social security
systems. There are concerns that increased formal social systems
could further accelerate the demise of the traditional value-sets,
which underpin traditional social protection systems (Kyaddondo and
Mugisha, 2014). However, it is argued that formal social security
systems will strengthen social networks within communities and
rebuild traditional support mechanisms, which calls for the need to
strengthen partnerships between traditional (informal) and formal
social security systems (Bukuluki, 2008).

110 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

10. The Future of Social Security
Systems in Uganda
From the foregoing discussions and evidence on social protection/
social security dynamics taking place globally and particularly in
Uganda, several issues have come up that are likely to influence the
future of the social protection/social security policy and programming
in Uganda. These include: increasing the coverage of social security/
social protection interventions (extending informal and formal
schemes with regard to pension reforms and health insurance);
financing (we foresee an increase in finance allocation, especially
to the contributory social security schemes compared to the non-
contributory); rights (including citizen-state contract – an increase
in the number of Ugandans who perceive social protection as a right
and demand it from the government); liberalisation of some key
aspects of social security, such as the pension sector; increased
debates on conditional vs. unconditional cash transfers; we expect
an increase in financing complementary social programmes; donor
influence (interest in non-contributory schemes, except for the
World Bank, which has an interest in liberalisation); targeting (with
focus on categories perceived as deserving or undeserving and
the efficiency of targeting mechanisms); ingenious hybrids (public-
private partnerships); and formal social security complementing
informal social support systems.

Coverage: Globally and particularly in Uganda, debates will focus

more on how to develop strategies that will facilitate increasing
coverage for social security provisioning and less on whether social
protection is needed. ‘In the next 5-10 years, critical discussions
will be on approaches to increasing coverage such as universal
versus targeting, conditional versus unconditional, cash versus
public works, rights-based versus developmental approaches, etc.’
(see Arup Banerji cited in Devereux and Ulrichs, 2014: 5). However,
interest in increasing coverage will inevitably create an impetus for
other critical questions, particularly on the scope of social protection
provisioning. One of the key issues that will take centre stage is
whether social protection/social security should extend beyond
the poorest to take on a more proactive approach geared towards
primary interventions. The other relevant policy and programming

CHALLENGES AND OPPORTUNITIES 111

debate will be centred on how social assistance and social insurance
can be reconciled within one holistic social policy framework (ibid.).

Rights: The current debates on rights are likely to take centre stage
in social protection discourses. In Uganda, we have witnessed a
number of advocacy platforms championed by civil society and, to
some extent, by the media and academia. For example, the Uganda
Social Protection Platform (USPP) has been building the capacity of
organisations to advocate the national roll-out of the senior citizens
grants. The meetings have been targeting ministers, members of
Parliament, local governments and their respective local leaders
such as chairpersons, district speakers and councillors. For example,
older persons, through their national network, have petitioned the
Speaker of the Parliament of Uganda and the Buganda Parliamentary
Caucus Committee. The petition was recently read to Parliament and
is currently being considered by the relevant committee. There have
also been media engagements regarding the programme. However,
some scholars, such as Rachel Slater, aptly note that continuing
to use normative statements in discussions about social protection
as a right may not achieve much. ‘It is not helpful to turn social
protection into something very normative, where governments all
have to commit to the same thing’ (see Slater cited in Devereux
and Ulrichs, 2014: 5). Instead, it may be more realistic to increase
the engagement of states, particularly in Africa, to increase their
commitment to evidence-based social protection programmes
by increasingly demonstrating the success stories, promising/
best practices and returns on investments in social protection
programmes. In addition, continuing to engage the grass roots to
create a movement with a stake in social protection may be helpful
in demonstrating that limited investment in social security can
cost votes, given that people start to perceive social protection as
a right and entitlement rather than a generous initiative from the
government (Bukuluki and Watson, 2014).

Financing: The major issue, particularly in Africa and Uganda,

will continue to be how to get the state to increase its financing
of social protection interventions and reduce reliance on external
funding mechanisms. In Africa, South Africa provides an example of
states that have increased financing of social security and protection
programmes. With regard to financing, there is likely to be
increasing interest in the assessment of the relative position of social

112 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

protection in comparison to other interventions (also see Devereux
and Ulrichs, 2014: 5). Definitely, the debates around extending
coverage have close links with the issue of financial affordability
in contexts with limited resources. The current trend of financing
and related debates suggest that interest is likely to increase in
financial allocations from the state, especially to the contributory
social security schemes such as National Health Insurance and
social pensions, compared to the non-contributory schemes such as
cash transfers and public works. However, it is expected that donors
will tend to finance non-contributory social security programmes
that target the poor and most vulnerable people with a view to
contributing to improving their quality of life and their livelihoods.
In Uganda, private sector participation in and financing of the social
security sector is also likely to increase, especially motivated by the
current interest by the government and other stakeholders, such
as the World Bank and IMF, in the liberalisation of the pension and
the formal social security sector. We are also likely to see some
partnerships beginning to emerge or actually increase where the
government and donors engage competent private sector entities
to manage some aspects of the formal pension and social security
schemes. We also anticipate a number of CSOs and projects will
continue to develop complementary social protection projects aimed
at strengthening the capacity of households and families to reduce
risk and vulnerability to key social and economic shocks.

Conditional vs. unconditional social security schemes: Debates

about the pros and cons of the conditional and unconditional social
assistance interventions, especially cash transfers, are likely to
continue in Uganda. This is because, although the current social
assistance programmes have adduced evidence to show that the
absence of conditionalities in the SAGE programmes has not had
any significant impact on the processes and outcomes of the SAGE
scheme, some voices in government, civil society and academia have
been arguing in favour of conditional social protection interventions.
Some people have argued that ‘these programmes [conditional
cash transfers] are as close as you can come to a magic bullet in
development. They are creating an incentive for families to invest in
their own children’s futures. Every decade or so, we see something
that can really make a difference, and this is one of those things’
(see Nancy Birdsall quoted in de Janvry and Sadoulet, 2004:1).

CHALLENGES AND OPPORTUNITIES 113

Conditionalities may be human capital-related and may include
requirements such as school attendance or academic achievement
by children, clinic visits, meeting nutritional objectives and adult
education programmes. The aim is to actively encourage changes
in behaviour, and beneficiaries must fulfil these conditions in order
to receive payments (see Lindert et al., 2006).51 Others, including
the former president of Tanzania, have argued that ‘[d]evelopment
cannot be imposed. It can only be facilitated. It requires ownership,
participation and empowerment, not harangues and dictates’
(President Benjamin Mkapa cited in Stiglitz and Charlton, 2006:
10). Scholars have noted that the core debates on conditional and
unconditional transfers rotate around the questions of ‘whether poor
households know how best to employ resources for household well-
being, and whether they act accordingly’. Some studies on conditional
cash transfers have generated evidence to show that ‘when
implemented jointly – higher money incomes for households, public
funding to improve service delivery and conditionalities requiring
school attendance and other forms of compliance can improve social
well-being and reduce poverty’. This notwithstanding, it has been
aptly noted that ‘within the evidence base to date, it is difficult to
distinguish whether these impacts are due to the cash transfer, or
whether they are due to the conditionality’ (see Sedlacek et al.,
2000: 20). In some instances and contexts, unconditional transfers
may achieve the same developmental outcomes or sometimes
greater outcomes compared to conditional transfers (also see
Samson, Niekerk and Quene, 2010: 130; Sedlacek et al., 2000;
Moorstein, 2010) .Therefore, this means that the design of social
security programmes with conditionalities should give consideration
to the appropriate role for household autonomy and context and
balance this with ‘the common interest in ensuring that households
engage in the development of largely public and intergenerational
benefits, such as education, health and employment’ (also see
Samson, Niekerk and Quene, 2010: 130). ‘While all social transfer
programmes that aim to promote social protection will consider the
cost of the minimum living standard in setting the benefit level,
conditionalities create additional costs that must be reflected.
These include the costs of educational materials and uniforms,
transportation to school, the income the child gives up by not
working (the opportunity cost of going to school) and other costs

51 Also see http://epri.org.za/wp-content/uploads/2011/01/EPRI_Chapter9_5.pdf

114 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

associated with compliance. In addition, the determination of the
benefit may be constrained by a pre-existing programme that the
conditional scheme replaces’ (see Ayala, 2005: 28).52

Targeting: In Africa and Uganda in particular, there have been

different perspectives about the best approaches that will help to
increase effectiveness and efficiency in targeting the most deserving
persons to benefit from social protection/security programmes. Some
contributors think that targeting efficiency needs to increase to make
a case for financial investment in programmes, while others argue
that this debate is not relevant since ‘it represents a vision of social
protection that is focused on the poorest’. It was, however, noted by
some contributors, such as Göran Jonsson (cited in Devereux and
Ulrichs, 2014: 5) that ‘universalism does not imply that all are treated
equally; hard-to-reach groups need special attention to ensure that
they get anything at all’. It was argued here that ‘targeting within
universalism’ is needed to ‘ensure that the most marginalised and
discriminated groups in society have access to social protection’.
This inevitably leads us into conceptual and programming debates
on the difference between equity and equality. One of the examples
cited relates to issues of double targeting; for example, with respect
to the SAGE scheme, some people have observed that under the
SCG, the elderly benefiting from the formal pension sector schemes
should not be included as beneficiaries of the SCG. This grant uses
categorical/universal targeting based on age (65 years of age or 60
years if one is from the Karamoja region).

A recent study in Uganda that aimed to contribute to learning

targeting approaches and mechanisms adopted in the SAGE scheme
under its key components the Senior Citizen Grants (SCG) and the
Vulnerable Family Grants (VFG). This study specifically assesses the
following:

(a) Efficiency: How well the targeting approach performs in

terms of costs (social, political, opportunity and financial);
(b) Effectiveness: How well the targeting approach enables the
programme to identify its intended beneficiaries;

52 Ayala 2005, p. 28, quoted in http://epri.org.za/wp-content/uploads/2011/01/

EPRI_Chapter9_5.pdf

CHALLENGES AND OPPORTUNITIES 115

 (c) Appropriateness: How suitable the targeting approach is
to the overall context (poverty and vulnerability profile;
institutional capacity; political and social acceptability).
(Bukuluki and Watson53, 2014)
This study concluded that policy-makers need to consider a wide range
of issues when designing targeting mechanisms for social transfer
programmes. These include: administrative cost efficiency; coverage
of the poor and inclusion of the non-poor; institutional capacity
requirements; likely social impact; scope for negative politicisation;
transparent and easily understood eligibility criteria; data needs
and capacities; susceptibility to abuse/corruption and rent-seeking;
and the creation of perverse economic or social incentives. The
study further noted that there is clear need for the development of
strong management capacity, checks and balances, accountability
mechanisms, and effective public communications. Systematic and
continuous tracking of both direct and indirect beneficiaries can
shed more light on the comparative cost effectiveness of particular
targeting methods and approaches (Bukuluki and Watson, 2014).

The findings of the study are quite similar to those of others studies
on comparative perspectives on targeting from other African
countries which found that: The effectiveness of targeting had
not yet been thoroughly assessed (lack of data and operational
information on costs); errors of both exclusion and inclusion were
high in some programmes; the selection processes were not always
well understood by communities; demographic eligibility criteria
combined with community-based targeting were effective; poverty-
based targeting could lead to social divisiveness in the context of
broad-based poverty and lack of reliable income/expenditure data;
categorical approaches were more prevalent than poverty-based
approaches owing in part to prevailing policy thrusts favouring
‘horizontal equity’ (between like groups) over ‘vertical equity’
(poverty-based); common weaknesses in categorical approaches
included inconsistency between the defined categories and the
targeting objectives and lack of clear definitions of the targeted
categories; more accurate and effective targeting would depend
on strengthened data collection and analysis, including further
53 Bukuluki, P and Watson, C. (2014). An evaluation study of the efficiency,
effectiveness and appropriateness of targeting in Uganda’s Social Assistance
Grants for Empowerment scheme (SAGE). Final report submitted to Ministry of
Gender, Labour and Social Development

116 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

development of management information systems, monitoring and
evaluation (see Monchuk, 2013; Bukuluki and Watson, 2014). These
findings are likely to inform targeting processes and approaches for
continuing and new social security interventions in Uganda.

From the above discussions and assessments of the social security

systems, it can be seen that Uganda is yet to achieve the principles
of the social market economy. Justice, solidarity and responsibility
are at the heart of the social security system. The social market
economy emphasises social balance through catering for the
vulnerable and marginalised persons in society. Those individuals
who are left out owing to the harsh economy are helped by either
individuals or the community, or the government comes in to
intervene (Twimukye, 2011). Uganda’s economy has grown strongly
over the last two decades. However, only the rich people have
benefited from the growth while other proportions of the population
have experienced a decline in welfare levels. This rapid economic
growth has been criticised for being non-inclusive, where large
sections of the population have not benefited from its fruits (ibid.).
For example, there are many unemployed youth who lack access to
social insurance schemes. This includes other categories of persons
that have limited or no access to social security systems, which has
contributed to inequalities in the society. In addition, the adoption
of the structural adjustment programmes in the early 1990s
diminished the role of the state in influencing the market outcomes
as well as the provision of public goods. The role of the private
sector in the provision of social services in Uganda is increasing, and
this includes social security such as retirement benefits and health
insurance that has excluded the poor from accessing social security.
This has eventually resulted in an unequal society where individuals
lack equal opportunities, hence violating the principles (particularly
justice) of the social market economy. Therefore, there is need for
the country to re-examine the role of the state in ensuring that
there is equitably between all the sections of the population.

In addition, the government in the recent years has prioritised

investment in infrastructures, including road networks and electricity,
in order to achieve economic development with more emphasis on
foreign investment. This has left the social development sector with
limited prioritisation regarding where social security lies. This calls
for the Government of Uganda to prioritise social protection as a
strategy for socio-economic transformation.
CHALLENGES AND OPPORTUNITIES 117
11. Conclusions
Social security systems have evolved over time in Uganda with
increasing awareness of their role in preventing and mitigating
risks and vulnerabilities. The formal social security systems that are
currently being implemented have roots in the colonial government
schemes, although these have changed over time to take on some
new attributes. Uganda has a multi-tier pension system model
encompassing contributory social insurance, non-contributory direct
income support and voluntary private pension schemes. Informal
social security systems were and still remain vital in Uganda,
particularly in rural areas and in the informal sector. They are,
however, experiencing challenges related to poverty, urbanisation
and, to some extent, some sections of the population becoming
relatively individualistic with more focus on nuclear families. There is,
therefore, need for the government to consider adopting measures
to strengthen informal social security systems and to undertake
deliberate strategies to create and strengthen partnerships between
the formal and informal social security systems. This is crucial, given
the fact that only a limited section of the population, particularly
those in the formal sector, have access to formal social security
systems.

The social security coverage in Uganda has been increasing over

time as a result of commitment from government which is attested
by the legal framework and financing. However, the financing is
still inadequate. Support from development partners, particularly
to social assistance programmes like cash transfers, has been on
the increase since 2010 and is likely to continue for the next five
years. The role of the private sector and civil society organisations
is also likely to increase. However, coverage has remained mainly
limited to formal sector workers, which excludes the majority of the
population working in the informal sector. Coverage is expected to
increase when pension reforms and the national health insurance
schemes are implemented and the national roll-out of the senior
citizens grants is finalised.

Many Ugandans, especially at grass-roots level, are not yet aware

that they have a right and are entitled to access to social security
schemes. This is evident in the very limited to non-existent demand

118 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

for it by the population to the government. The Government of
Uganda should establish more schemes to cover the risks and
vulnerabilities encountered throughout the life cycle. These include
child support grants, unemployment insurance, and family and
sickness benefits. The government should further enforce laws
with social security provisions to protect beneficiaries from risks,
including workers’ compensation and maternity provisions, among
others. In this respect, Uganda could learn from South Africa, which
is one of the countries in sub-Saharan Africa with a range of social
security schemes, including universal old age schemes, child support
grants, and disability grants.

Social security systems in Uganda have continuously been

encumbered by bad governance in the form of mismanagement and
corruption; inadequate funding; limited scope of coverage; poor
information management systems; delayed processing of benefits,
among other factors. These have undermined the effectiveness of
the schemes. These challenges are expected to become less severe
when the pension sector is reformed and liberalised in the future.
Other opportunities include support provided by development
partners, especially DFID, Irish Aid and UNICEF, towards social
assistance and by the World Bank in the liberalisation of the pension
sector.

Financial investments in social security systems remain low in Uganda.

The government’s financial resources are largely channelled towards
the public service pension schemes with limited investments in the
social assistance schemes that are primarily donor financed. There
is also inadequate financial investment by the government in social
assistance schemes despite the evidence from the SAGE programme
showing that it has improved the living standards of the beneficiaries
and their households. Therefore, there is need for the government
to allocate resources for the national roll-out of such schemes that
contribute to inclusive development. It is, furthermore, noteworthy
that low levels of financial investment in social security is partly
a result of strong competing demands on government spending
allocations. There is more investment in sectors and programmes
that the government believes will lead to economic growth. This
has eventually left the Ministry of Gender, Labour and Social
Development responsible for social development as one of the least
funded government ministries. Moreover, it is likely that financing

CHALLENGES AND OPPORTUNITIES 119

of the public works schemes that are principally concentrated in
northern Uganda will decrease, given that the region has started
to show signs of recovery and, in some areas, development, unless
unforeseen disasters and conflicts are experienced. The northerners
have previously been beneficiaries of development programmes with
significant financial support from development partners, particularly
the World Bank and the European Union.

While the Government of Uganda considers reforming the pension

sector to achieve adequacy, coverage and sustainability, the policy
has to be carefully analysed. The government should make an
effort to take lessons from the rest of the world regarding pension
reforms and liberalisation as there is a high likelihood of constraints
hindering the process. It is also very important for the government
to strengthen the capacity of families, especially in rural areas and
among the urban poor, given that these are largely excluded from
the formal social security schemes.

120 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

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136 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

13. Annex
Registered private social insurance providers by Uganda
Retirement Benefits Regulatory Authority

NO. INSTITUTION PHYSICAL ADDRESS

AAR Health Services Uganda

1 Limited Staff Retirement Elizabeth Avenue, Kololo
Benefits Scheme
AIG Uganda Insurance Company
Limited

P. O. Box 7077
2 AIG Uganda
Plot 24A Akii Bua Road,

Kampala

Alexander Forbes Retirement

Fund

Marsh Uganda Ltd

CitiBank Uganda Ltd

WIPRO Ltd

International Alert Uganda

Alexander Forbes Financial

Services Ltd
Uganda Development Bank Ltd
5 Bandali Rise Bugolobi, 2nd Floor,
3 Rakai Health Services Program
Studio House
KCB Bank Uganda Ltd

FINA Bank Uganda Ltd

Capital Markets Authority

ICCO Cooperation

Imperial Bank Uganda Ltd

Lion Assurance Company Ltd
Rift Valley Railways (Uganda)
Ltd

Unilever Uganda Ltd

4 Allied Bank Staff Provident Fund Plot 45, Jinja Road

CHALLENGES AND OPPORTUNITIES 137

 Balaji Insurance Ltd Pension
5
Scheme

6 Bank of Uganda DC Plot 33-45, Kampala Road

Bank Of Uganda Staff

7 Plot 33-45, Kampala Road
Retirement Benefit Scheme

Barclays Bank Retirement

8 Plot 2/4, Hannington Road
Benefits Scheme

British American Tobacco

9 Plot 69/71, Jinja Road, Kampala
Uganda Staff Pension Scheme

Mapeera House
Centenary Bank Staff Defined
10
Contribution Scheme
Plot 44-46, Kampala Road

Crown Beverages Uganda

11 Plot M214, Jinja Road
limited

Delta Petroleum (U) Ltd Staff

12 Ruth Tower, Hannington Road
Retirement Benefits Scheme

DFCU Retirement Benefit

13 Plot 2, Jinja Road
Scheme

Eagle Africa Retirement Benefits

14 Plot 19, Bukoto Street, Bukoto
Scheme

15 Eco Bank Staff Provident Fund

Plot 4, Parliamentary Avenue

Equity Bank (U) Staff Provident

16 Plot 390, Mutesa 1 Road
Fund Scheme

Eskom Uganda Limited Staff Plot 1, Kampala Road, Jinja, Nalubaale

17
Provident Fund Power Station

Finca Uganda Limited Staff

18 Plot 22, Ben Kiwanuka Street, Kampala
Retirement Benefits Scheme

138 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 Heifer International Uganda
19 Plot 1, Yusuf Lule Road, Nakasero
Staff Provident Fund Scheme

Housing Finance Bank

20 Plot 4, Wampewo Avenue, Kololo
Retirement Benefits Scheme

21 ICEA Retirement Scheme 2nd Floor, Rwenzori Courts

Kinyara Sugar Works Limited

22 Bujenje, Masindi
Staff Provident Fund

23 Liaison Personal Retirement Plan Plot 44, Lumumba Avenue, Kampala

Makerere University Business

24 School Retirement Benefits Plot M118, Port Bell Road
Scheme

Makerere University Retirement B4, Lincoln Flats, Makerere University

25
Benefits Scheme
Main Campus

Monitor Publications Ltd Staff

26 Plot 29-35, 8th Street, Industrial Area
Retirement Benefits Scheme

MTN Uganda Contributory

27 Plot 22, Hannington Road
Provident Fund

NARO Retirement Benefits

28 Plot 11-13, Lugard Avenue, Entebbe
Scheme

Plot 1, Pilkington Road, 14th Floor,

29 National Social Security Fund
Workers House

Nile Breweries Staff Provident

30 Plot 6-10, Port Bell Road, Luzira
Fund

Plot 1, Pilkington Road, 14th Floor,

31 NSSF Staff Provident Fund
Workers House

Orient Bank Staff Defined

32 Plot 6/6a, Kampala Road
Contribution Scheme

PACE Staff Retirement Benefits

33 Plot 2, Ibis Vale, Kololo
Scheme

Plot M697, 2nd Floor, UMA Show

34 PCP Staff Provident Fund
Grounds

CHALLENGES AND OPPORTUNITIES 139

 Pentecostal Assemblies of God
35 Plot 9, Bandali Rise, Bugolobi
Staff Provident Fund Scheme

Pride Microfinance Retirement

36 Plot 8-10, Entebbe Road
Benefits Scheme

Royal Danish Embassy Local

37 Staff Retirement Benefits Plot 3, Lumumba Avenue, Kampala
Scheme

Plot 8/10,
38 Sadolin Paints Uganda Limited 2nd Street, Industrial Area

39 Stanbic Bank Uganda Plot 17, Hannington Road

Standard Chartered Bank

40 Plot 5, Speke Road
Uganda Pension Trust Fund

Stanlib Uganda Umbrella Plot 17, Hannington Road, 4th Floor,

41
Scheme Crested Towers

State-wide Insurance Company

42 Limited Staff Retirement Plot 1, Bombo Road, Sure House
Benefits Scheme

Tullow Uganda Limited Staff

44 Plot 15, Yusuf Lule Road, Nakasero
Retirement Benefits Scheme

Uganda Breweries Limited

45 Port Bell, Kampala
Retirement Benefits Scheme

Uganda Clays Retirement

46 Entebbe Road, Kajjansi
Benefits Scheme
Uganda Communication
47 Commission Staff Provident Plot 42-4, Spring Road, Bugolobi
Fund
Uganda Communications        
48 Employees’ Contributory Plot 1, Delhi Gardens, Old Kampala
Pension Scheme

Uganda Revenue Authority Staff Plot 40, Rotary Avenue,

49
Retirement Scheme URA Training School

UNEB Staff Retirement Benefits

50 Plot 35, Martyrs Way Ntinda
Scheme

Vivo Energy Uganda Limited

51 Plot 9/11, 7th Street, Industrial Area
Staff Provident Fund

Watoto Church Ministries

52 Plot 87, Kampala Road
Provident Fund

140 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 The table below indicates the number of beneficiaries per community-based health insurance
scheme in Uganda for the last 3 years (2010-2013)54

Type of scheme Location

Name of Community- Facility Year of

NO. Other District Region
Scheme based -based Establishment

Kisiizi Health
1) Yes 1996 West
Plan

Mother Child
2) Rescue Health Yes 1999 Bushenyi West
Plan
Ishaka
3) Hospital Yes 1999 Bushenyi West
Health Plan

BMC - School
4) Health Made Yes 1998 Bushenyi West
Easy Scheme

Kitovu
5) Hospital Yes 1999 Masaka Central
Health Plan

CHALLENGES AND OPPORTUNITIES 141

54 Uganda Community Based Health Financing Association (UCBHFA), 2012 Secretariat Report.
 Nyakibale
6) Hospital Yes 1999 Rukungiri West
Health Plan

Comboni
7) Hospital Yes 2002 Bushenyi West
Health Plan

Mutolere
8) Hospital Yes 1998 Kisoro West
Health Plan

Nyamwegabira
9) Yes 2004 Kanungu West
––

Kitanga Health
10) Yes 2004 Kabale West
Plan

Save for
Saving
Health
11) and 1999 Luwero Central
Uganda-
Credit
LUWERO

142 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

Nyakatsiro
12) Yes 2006 Bushenyi West
Health Plan
 Mitooma
13) Nursing Home Yes 2006 Bushenyi West
Health Plan

Ishaka Health
14) Yes Bushenyi West
Plan

15) MCRP & UHC Yes Bushenyi West

Kitanga Health
16) Yes Kabale West
Plan

17) SHU-Bushenyi Yes Bushenyi West

18) Nyamwegabira Yes Kanungu West

Kinanira Plan
19) & Mutolele Yes Kisoro West
Hospital

CHALLENGES AND OPPORTUNITIES 143

 Kibirizi Plan
20) & Nyakibare Yes Rukungiri West
Hospital

21) ICOBI

22) Katimba CHIS Yes 2007 Sembabule Central

23) Nkoni CHIS Yes 2009 Masaka Central

Save for
Health –
25) 2007 Bushenyi West
Bushenyi
Schemes

Source: Uganda Retirement Benefits Regulatory Authority - http://urbra.go.ug/registered-schemes.html

144 THE STATUS OF SOCIAL SECURITY SYSTEMS IN UGANDA

 This project is funded by
Konrad-Adenauer-Stiftung e.V. Uganda
Plot 51 A, Prince Charles Drive, Kololo,
P.O. Box 647 Kampala, Uganda
Tel: +256 - (0)312 - 262011/2
www.kas.de/Uganda

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