Uganda's pension pilot has been a huge success — but can it survive?

LONDON — Every week, the speaker presiding over Uganda’s 426-member parliament fields questions, comments, complaints, demands, and even threats regarding the uncertain future of Uganda’s elderly population, who have been left vulnerable after decades of difficulties.

Since 2010, some districts of the country have benefited from a pension scheme that has helped not only the ever-increasing aged population, but also the families they are often responsible for.

But as the Ugandan government prepares to take over the full rollout of the program from donors, the future of the hugely popular intervention is in doubt.

“People have started becoming uncomfortable. They want to see the pilot pension scheme rolled out because of the many achievements they are seeing in the neighboring districts where it’s been implemented,” Flavia Rwabuhoro Kabahenda, a former member of the Ugandan parliament and founding chairperson of the Parliamentary Committee on Gender, Labour and Social Development, told Devex. “That raised the pressure from the communities, who were demanding from their leaders, ‘why aren’t we getting our senior citizen benefit?’”

The Expanding Social Protection, or ESP, program, funded by the United Kingdom Department for International Development, Irish Aid and the Ugandan ministry of finance is a cash transfer pension scheme for Ugandans over 65 years of age. Launched in 15 districts in 2010, the pilot was hugely successful, praised by recipients and social protection experts for its far-reaching impacts on other vulnerable segments of the population. A study found that, on average, recipients spent 70 percent of their benefit on others in the household. Currently, 150,000 Ugandans receive the benefit, but evaluations have found that the $6.40 monthly payments impact between 600,000 and 700,000 secondary beneficiaries, mainly children.

More than 3 million orphaned children live with elderly people in Uganda, often grandparents who lost offspring to one of the country’s recent conflicts, economic migration, or the HIV/AIDS epidemic. In Uganda, Kabahenda said, it is customary for children to take care of their parents as they grow older, but years of disease and conflict have left older generations with more, not less, responsibility.

Yet of Uganda’s 42 million citizens, less than 10 percent are covered by a formal pension scheme, raising concerns among lawmakers about soaring rates of old age poverty. In a new, still shuddering, democracy, the issue of social protection for Uganda’s elderly — as well as the vulnerable children in their care — has emerged as a key test of its electoral system. When the government delayed committing additional support to the program, Ugandans took it out on the polls.

“The community attributed the delay to their leaders not being able to represent them, so the pilot which had taken five years from 2011-2016, caused many members of parliament to lose their seats,” Kabahenda told Devex.

In 2016, after stellar evaluations of the scheme’s impact and value for money, DFID and Irish Aid expanded the program beyond its pilot phase to 40 districts, on the condition that the Ugandan government take over more of the financing and implementation of the $80 million program. The Ugandan ministry of finance initially balked, but under pressure from fearful members of parliament it increased its buy-in through 2021, which is when DFID and Irish Aid now plan to hand over the reigns to the government.

As voters call for a national rollout to all of Uganda’s 121 districts, MPs are under pressure.

“Many MPs only got into this parliament after assuring their communities they will get it funded,” Kabahenda said.

Now, the same MPs who incorporated the pension scheme into their electoral platforms worry about the government’s promise to take over the program, and program staff told Devex they hear murmurings that DFID is planning to pull support in 2021 whether or not the Ugandan government steps up.

“DFID has begun to put down demands that if the government of Uganda didn’t fulfill certain financial commitments then they would close the program down,” one staffer told Devex, speaking on condition of anonymity to preserve ties with DFID.

Making matters worse, they said, DFID Uganda staff last year lost a key internal advocate at London headquarters, who left the agency earlier this year.

The source said that local DFID and program staff in Uganda, sensing the importance of securing the program for its 150,000 beneficiaries as well as hoping to show off its political success, decided to build a new business case aimed at DFID ministers, who will ultimately decide whether to continue funding the program. But after testing the waters with it a few months ago, a high-ranking DFID civil servant told staff they needed to do more to make the case to ministers, the source claimed.

Building a case

Now, advocates are mounting a renewed push. Kabahenda, together with a handful of other Ugandan MPs, arrived in London at the end of last year to lobby DFID, equipped with a robust value for money case and five years’ worth of positive testimonials and independent evaluations. She told Devex she wants to show DFID officials that Uganda’s lawmakers are doing everything they can to put pressure on the ministry of finance, despite the ministry’s perennial claims that other priorities, namely infrastructure, must get first dibs on the budget.

“When we started in 2007, the government of Uganda was only contributing $2 million, then raised it to $7 million, then raised it to $9 million. This year ... it is $27.9 million, and next financial year we’re going to be talking about $40 million,” Kabahenda told Devex. “To me that is clear evidence that the government of Uganda is willing to finance and invest in the livelihoods of the older persons, and take up the mantle as DFID continues to work with us.”

Kabahenda said recipients have “put the money to real use, sending children to school” and improving household nutrition. Even Uganda’s president, Yoweri Museveni, has said he believes the government can find the money to roll out the program.

“We understand that at times the MoF has had cold feet, or been sluggish on giving us the full amount of counterpart funding over any particular year, but we are glad that whenever the MPs come to see that the money comes from the ministry, the ministry has provided it,” she said.

Still, Kabahenda admitted she fears the ministry will not be able to roll out the program alone. Ideally, she said, DFID and Irish Aid will continue providing some support.

“The program is overwhelmingly supported across the political divide,” added Jacob Richards Opolot, another MP and chairperson of the Uganda Parliamentary Forum on Social Protection. “For instance, in the last parliament it was agreed unanimously that there should be a national rollout, and it has been repeated over and over, as recently as two months ago.”

“There’s a lot of pressure that in the 2018/19 budget, there must be provision for the national rollout. So it’s necessary that our development partners continue giving us support so that we can achieve that,” he said.

The plan now is to submit a new business case, the program staffer said. “The danger is that it just reaches the secretary of state or one of the ministers and they just say no, without thinking through the consequences,” he said.

“For the recipients themselves, for the future of the whole social protection system of Uganda, but also politically for the U.K., it’s not sensible. This is by far the most prominent DFID program in Uganda, and that’s another angle we’re trying to push on them. If we’re looking for trade agreements around the world, we need to be promoting things like this rather than cutting them.”

Drawing a line between locals and refugees

If a program scores well in evaluations, demonstrates value for money, carries national political clout, and appears on track — albeit slower than expected — to become locally owned, why would an evidence-driven donor such as DFID hesitate to back it?

A DFID spokesperson would only confirm that DFID plans to fund the program until 2021, and said it is too early to make any assessment on its future.

But in response to the same question, the program staffer heaved a sigh.

“One reason is refugees,” he said. “A DFID minister went to Uganda and said they were thinking of turning a lot of that funding toward refugee programming.”

Uganda hosts more than a million refugees from neighboring countries, most of whom have fled civil war in South Sudan. DFID subscribes to many of the regional migration compacts that will see billions directed to the effort of stemming the root causes of migration, an agenda shift that advocates worry could result in the defunding of critical social protection programs for local host populations.

“Ugandans in those areas [with high refugee populations], apart from a couple of districts, aren’t receiving any support at all,” the staffer claimed, adding that expanding the ESP to refugees would be a more logical step.

“This program would be a visible way of showing that Ugandans are getting support as well as the refugees, as they’re living very close to the Ugandans. It’s not in some sort of restricted refugee area,” he said.

However, responding to the claim, a DFID spokesperson said that programming for refugees will not affect the funding it provides for ESP.

Irish Aid did not respond to requests for comment about the future of the program, although the staffer suggested the agency is keen to keep it running, and is frustrated by DFID’s reticence.

A debate about social protection

The ESP has also become caught up in a much bigger development debate about how best to deliver social protection in low- and middle-income countries.

One strategy targets the poorest, typically identifying the very bottom of the economic ladder and offering benefits. The other strategy provides protection based on “lifecycle” factors, for example through a child benefit, a disability benefit or an old-age pension. Stephen Kidd, a senior social development policy specialist at Development Pathways, terms the two approaches the “charity” and “citizenship” paradigms. The charity paradigm, which targets the poor, he said, resembles the early social protection systems of industrialized nations such as the U.K.; while the lifecycle approach, or “citizenship” paradigm, more closely resembles the current unemployment, disability, and old age safety nets of industrialized countries.

“European 19th century poor relief began under authoritarian regimes but, as democracy strengthened, it was gradually replaced by inclusive lifecycle schemes, with the majority of citizens — including the main taxpayers — demanding social protection schemes from which they would also benefit,” Kidd wrote in a blog.

In recent decades, with the help of international aid donors, many low- and middle-income countries have similarly begun their approach to social protection like this; but as democracies grow and authoritarianism loses its foothold, some are now moving toward the citizenship paradigm, Kidd claims.

“For example, Ecuador’s Bono de Desarrollo Humano poor relief program is gradually being replaced by inclusive old age pensions and disability benefits; Mexico has introduced an inclusive old age pension to complement the Prospera poor relief scheme; and Zambia is gradually moving from household-based poor relief to a system of inclusive old age and disability benefits,” he writes.

It is a positive shift, Kidd argues, even if many donors are not willing to support it. While the initial investment required for citizenship programs is usually higher — existing poor-relief programs cost around 0.4-1 percent of gross domestic product, while lifecycle-focused programs can cost anywhere from 4-12 percent of GDP — they also tend to garner greater political support and generate more government ownership.

“It is remarkable that, over the past two decades, almost all of the inclusive schemes introduced in low- and middle-income countries have been driven by governments acting alone, without the support of international agencies and donors,” he writes, pointing to the examples of Nepal, Lesotho, Bolivia, Georgia, and Mongolia.

“In contrast, most poor relief schemes have been either initiated or supported by international agencies and donors. For example, Nigeria’s recent introduction of a conditional cash transfer scheme has been backed by a World Bank loan, while the United Kingdom and the World Bank finance Pakistan’s Benazir Income Support Programme, a classic poor relief scheme.”

Until now, Uganda’s Expanding Social Protection program has been exceptional among lifecycle-driven programs for its strong donor backing.

And the strategy to secure its survival is underway. One faction of ESP supporters — MPs, beneficiaries, and local program staff — will fight the battle in Uganda’s parliament with the aim of securing funding next month in time to establish the 2018/19 budget. Another, smaller faction, will make a case to DFID’s ministers, in the hope that its evidence-driven mandate wins out.

Update, Jan. 9: This story was updated to include new responses from DFID.

Read more Devex coverage on social protection.