CHALLENGES AND POSSIBILITIES FOR IMPLEMENTATION POLICY CHOICES AND POLICY PRIORITIES THE OLD AGE PEN


1
CHALLENGES AND POSSIBILITIES FOR IMPLEMENTATION
POLICY CHOICES AND POLICY PRIORITIES THE OLD AGE
PENSIONS IN LESOTHO
FURTHERING NATIONAL ACTION TO REALISE COMMITMEN
TS TO SOCIAL TRANSFERS IN AFRICA
THE CASE OF LESOTHO
BY THABO THULO- COMMISIONER OF PENSIONS
MINISTRY OF FINANCE AND DEVELOPMENT PLANNING
and DAVID CROOME-INSTITUTE OF SOUTHERN AFRICAN
STUDIES NATIONAL UNIVERSITY OF LESOTHO 4th Octob
er 2006 ALTIS HOTEL LISBON PORTUGAL

• BY THABO THULO COMMISIONER OF PENSIONS
• MINISTRY OF FINANCE AND DEVELOPMENT PLANNING
  (MoFDP)
  
• LESOTHO
• 20 23 MARCH 2006
• FAIRMOUNT HOTEL
• LIVINGSTONE ZAMBIA

2
Presentation Layout

• PRESENTATION LAYOUT
• Country Background
• Existing Schemes
• Policy
• Legal and Administrative Framework
• Pensions Impact project
• Conclusion

3
BACKGROUND(a) Completely surrounded
by the Republic of South Africa.(b)
Land area is about 30355 sq. km ( i.e. similar
to Belgium).(c) Mainly mountainous
with the whole country at least 1500 mt
above sea level. (d) Estimated population 2.1
million. Population very homogeneous over
90 from the Basotho tribe.
4
(Background cont) (e) Lesotho is amongst the
50 poorest countries in the world
(UNDP). (f) 2/3 of population is below the
poverty line of 2/day 43 day. (g) Economy dominated by South Africa
(RSA) very vulnerable to external
economic forces. (h) Donor aid adds about
16 to national income. (i)
Politically Lesotho is a democratic monarchy.
(Background cont) (e) Lesotho is amongst the 50
poorest countries in the worl
d (UNDP). (f) 2/3 of population is below the
poverty line of 2/day 43
ted by South Africa (RSA) very vulnerable
to external economic forces. (h) Donor
aid adds about 16 to nationa
l income. (i) Politically Lesotho is a
democratic monarchy
5
(Background cont.) (j) Independent since the
British colonial power left in 1966. (k)
Today 4th october2006 marks the 40th
independence anniversary and the
launching of the new national flag. (l)
Country divided into 10 districts 80
constituencies and 128 very recently formed
local community councils. (m) One of the
highest levels of HIV infection in the
world. ( 30 20 40 year olds infected ) (n)
Life expectancy falling rapidly.(37F 36M)
(o) Massive increase in numbers of orphans.
(Background cont.)(j) Independent since the
British colonial power left in 1966. (
k) Today 4th october2006 marks the
40th independence anniversary and
the launching of the new national flag.
(l) Country divided into 10 districts 80
constituencies and 128 very recently
formed local community councils.
(m) One of the highest levels of HIV
infection in the world. ( 30 20 40
year olds infected )(n) Life expectancy
falling rapidly.(37F 36M) (o) Massive
increase in numbers of orphans.
6
Existing Social Protection Schemes Prior to the
introduction of Old Age Pension Social
protection system in Lesotho has been mainly
confined to the following
categories and distributed across various
government ministries (i) Retired civil
servants in the form of unfunded defined
benefits pension scheme. (ii) Public
Financial Assistance program for the
destitute. (iii) African Pioneer Corps
pensions to veterans of the two world wars
and their dependants/widows. (iv) Universal
free primary education which will be fully
achieved in 2007.
7
Old Age Pension Policy in Lesotho

• Old Age Pension Policy
• The Ruling political party has had the
  introduction of the OAP as a manifesto
  policy since 2002.
  
• In 2004 the Lesotho Government announced a
  new policy to care for its senior citizens
  acknowledged to be one of the most vulnerable
  groups in the society. It committed the
  Government to the introduction of a universal
  old age pension scheme in November 2004.
• In doing so senior citizens aged seventy
  (70) years and above are the recipients under
  this scheme at the rate of M150(25) per
  person per month.
• According to the Bureau of Statistics it was
  estimated that about 70000 senior citizens fall
  in the age distribution of 70 years and above.
  This is 3.6 of the total population.

8
Policy Objectives (i) Increase living
standards and reduce poverty. (ii) implement
strategies outlined in the National Vision and
the Poverty Reduction Strategy
Program. (iii) Provide financial security to the
elderly as a safety net measure. Major
Challenges (1) Ensuring proper
regulation and supervision of the scheme.
(2) Mobilising resources to sustain the
scheme. (3) G8 debt cancellation
initiative- Lesotho unlike other low- income
countries which are bigger and richer than
Lesotho was not forgiven her debts. As a
result Lesotho is faced with great resource
constraints.
9
(policy cont.)
(policy cont.)

• Implementation was achieved as
• promised in November 2004 and
• about 66000 eligible people
• were registered.
• Introduced early this year the
• veterans of the two world wars
• are going to receive both war
• pension and old age pension.

• Implementation was achieved as promised in
  November 2004 and about 66000 eligible people
  were registered..
  
• Major policy change Introduced early this year
  whereby the veterans of the two world wars are
  going to receive both war pension and old age
  pension.
• Lesotho is among the only six Sub-Saharan
  countries and
  
• one of only two LDCs in the world to introduce a
  universal non-contributory pension for its senior
  citizens. (with Nepal)
  

10
LEGAL AND ADMINISTRATIVE FRAMEWORK

• The Old Age pensions Act 2005 was enacted in
  January 2005 and applied retrospectively
  from November 2004. The scheme is administered
  fully within the Ministry of Finance and
  Development Planning.
• All senior citizens aged 70 years and older
  and who are not receiving any form of pension or
  grant from the public assistance program funded
  from government consolidated fund are eligible
  to register for an old age pension.

11
Registration Process In the process of
registering eligible citizens the MoFDP
employed a participatory approach. The
Offices of District Administrators Members of
Parliament and the Chiefs were sensitised
through workshops and public gatherings.
The registration process was carried out on a
constituency basis using the voters
registration centres. The pension targets
the individual pensioners and not the
households and therefore if there is more than
one elderly person within the household
each one is entitled to a pension in his/her
own right to register.
12
Applicants were required to produce any of the
following documents for
identification (i) Passport. (ii) Voters
registration card. (iii) Any other acceptable
form of photographic
identification.
13
Challenges encountered in the process
Challenges Encountered in the Process
Lack of documentation or photographic
identification to prove ageMany elderly people
do not have documentation to prove their age and
they only remember the historical event when they
were born.Poor communication to the
beneficiaries which resulted in people who do not
qualify joining long queues to be
registered.Poor roads infrastructure
sometimes coupled with bad weather conditions
making it extremely difficult to reach some of
the rural areas.Errors of inclusion and
exclusion

• Lack of documentation or photographic
  identification to prove ageMany elderly people
  do not have documentation to prove their age and
  they only remember the historical event when they
  were born.Poor communication to the
  beneficiaries which resulted in people who do not
  qualify joining long queues to be
  registered.Poor roads infrastructure
  sometimes coupled with bad weather conditions
  making it extremely difficult to reach some of
  the rural areas.Errors of inclusion and
  exclusion

14
DELIVERY OF PENSIONS 1. Identification
of the Lesotho Postal Services as a well placed
service provider. This arrangement was in
realisation of the infrastructure and the
geographical locations of the post offices
throughout the 10 districts of the country. 2.
Involving the military and the police in the
delivery of cash in transit to the pay
centres and to bring a sense of safety to
the pensioners. The military helicopter is used
to reach some remote areas which are
totally inaccessible by road transport
. 3. Arranging to pay recipients directly in
cash through all the post offices in the
presence of the military and police
officers. Other public buildings such as the
Health centres Local Courts Chiefs
offices schools etc are used as
additional pay centres. The provide a total of
about 291 pay centres. 4. Following the
first local elections in April 2005 plans are
being developed to use the local community
councils for both registration and pay
centres.
15
10. CONCLUSION

• Old age pension in Lesotho has had relative
  success in meeting some of the basic human
  needs of older people.
  
• As we look into the future we envisage and
  therefore are working hard towards a well
  administered and sustainable scheme and looking
  forward to achieving one key component in the
  Millennium Development Goals (MDGs).
• The Lesotho government is making great
  efforts to reform and modernise other pensions
  laws such as civil service.

16
THANK YOU khotso Pula Nala. Emailthulot_at_f
inance.gov.ls
17
LESOTHO PENSIONS IMPACT PROJECT
National University of Lesotho Institute of
Southern African Studies November 2004 March 20
07 Interdisciplinary Pilot research 12 contribu
ting departments. Funding from University and Hel
pAge International.
18

OBJECTIVES OF PILOT STUDY Assess the impact and
poverty reducing effects of the old age pensions
on the well being of recipients
ASK reasons for processes involved and
anticipated benefits and costs
ASSIST the development presentation and
implementation of a nationwide study of the old
age pension system in Lesotho PROMOTE discussion
of and get evidence for the implementation of
old age pensions in other developing countries
especially southern Africa
19
WHO AND WHERE

• Interviewers all recent NUL
• graduates with previous
• experience of field work
• 50 villages and the small urban
• center around the University
• about 35 km from Capital
• Area in the foothills
• representative of the
• environmental and typical socio-
• economic characteristics of
• Lesotho.

20
HELP RECEIVED AND GIVEN
95 ambulant and care for themselves
50-60 need help with house and garden
Help from family esp. children no change after
pension. 86 have good links with family pension
has improved links for 21 215 respondents are ca
ring for 65 dependent orphans extra spending
on them is 20 of pension each month
21
EMPLOYMENT INCOME SUPPORT

• Only 7 still in paid
• work
• 23 get money income
• as well as pension
• Post pension 9 more
• interested in paid work
• 60 less interested
• 25 of income receivers
• get less cash support after
• pension
• No post-pension net
• change in assets held
• ( nb 95 already own
• house)

• Small increase in
• lending giving to
• others
• Average 4 of
• pension saved
• 45 new jobs created
• most farm or
• domestic work
• 11 says having
• pension makes it
• easier for them or
• family to get credit

22
PENSION AND EDUCATION

• No interest in using
• pension to educate
• themselves.
• In terms of priorities
• spending on education
• is
• - less important
• than spend on
• accommodation
• and health
• - more important
• than spend on food
• and clothes

• 60 have household
• members at school
• two-thirds at primary
• level
• 90 children get
• support from pension
• av. M60 month for
• uniforms transport
• etc
• 75 would use higher
• pension to spend more
• on this

23
PENSION AND RESPECT

• Still a lot of respect for
• elderly in Basotho villages.
• 83 say they get A Lotor
• Some respect from family
• (esp. children) and
• neighbours. Pension makes
• a small positive difference
• in this.
• Similar response on the role
• of pensioner as an advice
• giver.

24
PENSION AND RELATIONS WITH OTHERS

• 205/215 say I control myself
• and the use of my pension. Only
• 10 have others ( family ) doing
• this
• 7 claim they are being abused
• physically or mentally mostly
• by family
• 3 reports of abuse in order to get
• hold of pension money.
• Otherwise people feel safe with
• money in house.

25
PHYSICAL AND MENTAL HEALTH

• 80 mostly healthy but
• 15 say they have
• serious health
• problems. joints B.P.
• vision.
• Local health services
• available but means
• some travel and cost.
• Community health
• service too passive.

• After pension
• Spend more on
• health priority
• for hospital/clinic
• visits and to buy
• medicine.
• Use on average
• 8 of pension
• for extra health

26
FOOD AND NUTRITION
FOOD AND NUTRITION

• 61 use pension to buy more
• food. Average spend M 50/month.
• Pensioners on average get to eat
• 40 of extra food for themselves .
• MEAT EGGS SUGAR bought
• new.
• Only 16 responders believe that
• getting the pension will make
• people grow less food

27
PENSION AND HUNGER