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

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Title: 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 30,355 sq. km ( i.e. similar
to Belgium).(c) Mainly mountainous
with the whole country at least 1,500 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 october,2006, 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 october,2006, 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 70,000 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
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