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State of Social Protection in Kenya

2014

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Table of Contents

Table of Tables .............................................................................................................................................. 3

Table of Figures ............................................................................................................................................. 3

Abbreviations and Acronyms ........................................................................................................................ 4

1. Introduction & Background .................................................................................................................. 6

1.1 Setting the stage ........................................................................................................................... 6

1.2 Background ................................................................................................................................... 6

1.3 Social Protection by definition ...................................................................................................... 7

2.0 Kenya’s State of Social Protection.................................................................................................... 8

2.1 Social Protection Legislative and Policy Environment .................................................................. 8

2.1.1 Legislative framework ........................................................................................................... 8

2.2 Policy Framework .................................................................................................................... 10

2.2.1 Millennium Development Goals ......................................................................................... 10

2.2.2 Vision 2030 .......................................................................................................................... 10

2.2.3 National Food Security & Nutrition Policy .......................................................................... 10

2.2.4 National Social Protection Policy ........................................................................................ 10

2.2.4.1 Social Security ..................................................................................................................... 11

2.2.4.1.1 Social Security can be divided into three categories: ......................................................... 11

2.2.4.2. Health insurance ................................................................................................................. 13

2.2.4.2.1 The National Hospital Insurance Fund (NHIF) ..................................................................... 13

2.2.4.2.2 Proposed Reforms to Health Care and Financing in Kenya ................................................ 14

2.2.4.3 Social Assistance ................................................................................................................. 14

2.2.4.3.1 Social Services …………….…………………………………………………………………….……………………… 15

2.2.4.3.2 Financial Services ……………………………………..……..……………………..…………………………….…….. 15

3.0 Adequacy of Coverage of Social Protection Programmes .......................................................... 20

4.0 Budget Analysis & Trends on Allocation ..................................................................................... 22

5.0 Analysis of Kenya’s State of Social Protection ............................................................................ 25

6.0 Recommendations ...................................................................................................................... 26

7.0 Areas for Advocacy Intervention ................................................................................................ 28

8.0 Conclusion ................................................................................................................................... 29

9.0 Bibliography ................................................................................................................................ 30

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Table of Tables

Table 1: Social Security Schemes

Table 2: Employment and Earnings by Sector

Table 3: Social Assistance Programmes

Table 4: Social Protection Programmes

Table 5: Coverage of Safety Nets among Absolute Poor and Vulnerable Groups

Table 6: Spending on Social Protection Programmes

Table 7: Estimated Cost of Coverage for Vulnerable Groups

Table 8: Budgetary Allocation for Safety Nets FY2014/2015



Table 11: Possible Advocacy Interventions

Table of Figures

Figure 1: Graph of Poverty and Population Trends 2006-2012

Figure 2: Coverage within RBA

Figure 3: Proposed Administrative Structure for Social Protection under the NSPP

Figure 4: Social Assistance Administrative Structure

Figure 5: NSSF Administrative Structure

Figure 6: NHIF Administrative Structure

Figure 7: Coverage of the Poor by Relief and Social Protection interventions

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Abbreviations and Acronyms

AU - African Union

AU – SPF - Africa Union Social Policy Framework

ASAL - Arid and Semi-Arid Lands

CT - Cash Transfer

DFID - Department for international Development

FAO - Food and Agriculture Organisation of the United Nations

FY - Financial Year

GoK - Government of Kenya

GFD - General Food Distribution

HCF- ICC - Healthcare Financing Interagency Coordinating Committee

HSCC - Health Sector Coordinating Committee

HSNP - Hunger Safety Net Programme

JICA - Japan International Cooperation Agency

KIPPRA - Kenya Institute for Public Policy Research and Analysis

MGCSD - Ministry of Gender, Children and Social Development

MoA - Ministry of Agriculture

MoE - Ministry of Education

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MoMS - Ministry of Medical Services

NHIF - National Hospital insurance Fund

NSNP - National Safety Net Programme

NSPP - National Social Protection Policy

NSPS - National Social Protection Secretariat

NSSF - National Social Security Fund

OP - Older Persons

OPCT - Older Persons Cash Transfer Programme

OVC - Orphans and Vulnerable Children

OVC-CT - Orphans and Vulnerable Children Cash Transfer

RBA - Retirement Benefits Authority

SP - Social Protection

UN - United Nations

UNICEF - United Nations Children’s Fund

WB - World Bank

WFP - World Food Programme

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THE STATE OF SOCIAL PROTECTION IN KENYA

1. Introduction & Background

1.1 Setting the stage The issue of poverty has plagued generations in Africa and around the world, thereby constituting the principle basis

for socio-economic development discourse and more so for the investment in social protection. Although the

premise of social protection is social security, it was recognized that to address poverty in its entirety a multi-faceted

approach had to be embraced to ensure that those considered vulnerable and marginalized benefit from a multiplicity

of both government services and social security measures.

Regionally, African countries working through the African Union (AU) identified Social Protection as one key

strategy to enhance inclusive growth and social development. This was road mapped by commitment to the

Ouagadougou Declaration and Plan of Action that seeks to strengthen Social Protection schemes especially those

that reach the poorest, the vulnerable and the excluded. In 2006 the AU’s Livingstone and Yaoundé Calls for Action,

and the 2008 recommendations to invest in Social Protection in Africa, gave rise to the development of the AU

Social Policy Framework (AU-SPF). The framework was adopted by African heads of state and government in 2009

providing a guide for what constitutes an acceptable minimum package of social protection for households. This was

one of the first times that the concept of a basic minimum standard for all citizens was conceptualized.

Since then social protection interventions have grown from pilots to fully fledged programmes, and governments

have increased investments in the sector, thereby increasing the numbers of beneficiaries covered by such

programmes. In 2010, only about twenty-one (21) countries in Africa had a cash transfer, but as of 2013, about thirty

seven (37) countries had a safety net programme in place (World Bank, 2014)

1.2 Background

Poverty in Kenya specifically

has been a driving factor to

the formulation of

mechanisms that promote the

development of coping

mechanisms and measures

that reduce risk as well as

promote livelihoods. In 2012,

49.8% of the Kenyan

population was considered to

be living in poverty

(KIPPRA, 2013).

Source: KIPPRA 2013

Figure 1: Graph of Poverty and Population Trends 2006 - 2012

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The graph shows the clear growth of poverty in the country between 2006 and 2012, the need to deepen

interventions that safeguard not only the socio-economic rights of individuals but also inclusive growth are critical

for sustainable development. It has to be noted that poverty in Kenya is worse in rural areas as compared to urban

areas. The prevalence of which varies tremendously across counties i.e. in Arid and Semi-Arid Lands (ASAL)

poverty rates peak at 74%, whereas in urban areas such as Nairobi, rates dip to 22% (Ministry for State for Planning,

National Development and Vision 2030, 2012). In addition, poverty was higher among households with vulnerable

persons (53.5%) and even harder on specific demographics such as: Orphans and Vulnerable Children (OVC)

(54.1%), older people (53.2%), and people with disabilities (57.4%) than among the general population (Ministry for

State Planning, National Development and Vision 2030, 2012).

1.3 Social Protection by definition Social Protection can be defined by the perceived outcome of interventions and unfortunately this forms the basis for

both contradiction and sectoral interests being championed. The issue raised in the murk of definition then becomes

where does social protection end and social policy begin, but to avoid the rhetoric we shall examine key definitions

from the Africa Union (AU), International Labour Organisation (ILO), Southern Africa Development Community

(SADC) and from Kenya. Kenya as it is our scope of interest as we examine the state of Social Protection in the

country. The AU-Social Policy Framework and ILO Social Protection Floors as Kenya makes reference to both

documents in the operationalisation of the National Social Protection Policy. The SADC Code on Social Security is

critical because it offers a regional comparison and which will probably form a basis of reference in the discussions

around an East African Code on Social Protection as the current strategy for the region winds up in 2015.

Going by the AU’s prescription’s which forms the principle overarching (continental) framework; social protection:

“…includes social security measures furthering income security, and also the pursuit of an integrated policy

approach that has a strong development focus, such as in job creation, equitable and accessible health and other

services, social welfare, quality education and so on.”

The ILO defines Social Protection Floors as:

“…nationally defined sets of basic social security guarantees which secure protection aimed at preventing or

alleviating poverty, vulnerability and social exclusion.”

SADC Code on Social Security:

“Social Protection is broader than social security. It encompasses social security and social services, as well as

developmental social welfare. Social protection thus refers to public and private, or to mixed public and private

measures designed to protect individuals against life-cycle crises that curtail their capacity to meet their needs.”

Kenya National Social Protection Policy:

“…policies and actions, including legislative measures, that enhance the capacity of and opportunities for the poor

and vulnerable to improve and sustain their lives, livelihoods, and welfare, that enable income-earners and their

dependants to maintain a reasonable level of income through decent work, and that ensure access to affordable

healthcare, social security, and social assistance.”

Each definition looks at safeguarding the individual from shocks and stresses which have the potential to interrupt

income, or safeguard those that lack the ability to provide for themselves for one reason or another. It is important to

note that Social Protection does not operate in a vacuum and interventions are meant to be complimented by other

socio-economic interventions.

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It is however important to note that there are other key institutions such as the World Bank and other development

partners who have largely driven the Social Protection agenda, and who cannot be ignored in their conceptualization

and operationalization of Social Protection.

As a guiding ethic for social protection and specifically one of its constitutive element, social security as put forth

under General Comment 191 the minimum social security standards should cover:

Healthcare

Sickness

Old Age

Unemployment

Employment Injury

2.0 Kenya’s State of Social Protection

To disengage interpretive bias, Social Protection in Kenya was defined within both legislative and policy

prescription. The legislative component of the definition of Social Protection speaks to Article 43 (Government of

Kenya, 2010) of the Kenyan Constitution which guarantees Social Protection as a right and operationalised by

specific Acts which will be discussed further. The definition also addresses programmatic and policy direction based

on the concept of universal enjoyment of rights taking care of both poor and vulnerable segments of the population

as well as those who could fall into poverty. This approach addresses a critical element of capacity development,

social justice and structural inequality. An approach defined by Sabates-Wheeler and Stephen Devereux as

transformative social protection (Sabates-Wheeler R. and Devereux S., 2007).

Its limitation in scope is also its strength as it clearly categorises social protection interventions into three broad

categories. This will be discussed in detail under the National Social Protection Policy.

2.1 Social Protection Legislative and Policy Environment Social Protection as stated earlier does not operate in a vacuum but rather draws from a multiplicity of interventions.

The legislative components of social protection are rooted in policy direction. These draw from both international

and local environments. Arguably, the most important policy is the National Social protection Policy of 2012, which

explicitly defines social protection rather than takes inference from sectoral policies that contribute to the realization

of Social Protection benefits. Kenya is the only country in the East African Community (EAC) with a policy in

place, explaining why it is made reference to in the Strategy for the region.

2.1.1 Legislative framework

The Kenyan constitution is deemed superior to any other legislation but has a duality principle as the constitution is

read together with other international laws and instruments that it is signatory to. The constitution of Kenya

guarantees basic rights to health, education, livelihood etc. as inalienable to the citizen. It is important to note that

the right to social protection is guaranteed explicitly in the Constitution of Kenya of 2010 under Article 43 which

addresses Economic, Social and Cultural Rights, Article 53 addresses Children’s rights, Article 54 makes reference

to persons with disability, Article 55 speaks of the youth, Article 56 of minorities and marginalized groups while

1 Committee on Economic, Social and Cultural Rights, General Comment 19, The right to social security (art. 9) (Thirty-ninth session, 2007), U.N.

Doc. E/C.12/GC/19 (2008).

Family & Child Support

Maternity cover

Disability benefits

Survivors & Orphans benefits

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Article 57 looks at older persons. In addition, Chapter 11 on devolution makes provision for devolved governments

to provide for the well being of all in the country. Article 43(1) states that every person has a right to social security,

which is non-discriminatory in nature speaking to universal provision and access to social security. Article 43(3)

goes further to make provisions for those that are unable to support themselves and their dependants, which falls in

line with the specific categorization of social safety nets looking at particular groups deemed vulnerable. In addition,

the Kenyan government commits to creating the requisite conditions for the attainment and enjoyment of the rights

afforded in the constitution. The Kenya constitution as stated above is dualist in nature and makes provisions for the

appreciation of social protection as bolstered by other international provisions including:

Universal Declaration on Human Rights

International Covenant on Economic, Social & Cultural Rights

African Charter on Human & People’s Rights

Employment Injury Benefits Convention

Invalidity, Old Age & Survivors Benefits Act No. 128

Equality of treatment (Social Security) Convention No. 118

Employment Promotion & Protection Against Unemployment Convention No. 168

Maintenance of Social Security Rights Convention No. 157

Social Security (Minimum Standards) Convention No. 102

ILO Convention 202 (Social Protection Floors)

These address specific areas such as the decent work agenda, employment benefits, equality etc. which gives

credence to the cross functionality of Social Protection provisions.

Even though the constitution of Kenya, as the supreme law of the land, provides the prerequisite conditions for the

enjoyment of Social Protection rights, other laws that are read together with constitutional provisions which shall be

discussed in detail later include:

National Social Security Act

National Hospital Insurance Fund Act

Pensions Act

Retirement Benefits Act

Social Assistance Act

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2.2 Policy Framework

Social Protection gets direction from policy prescriptions that seek to address: poverty, sustainable development,

cohesion, food security, health care benefits etc. These are drawn from both local and international

recommendations that inform the development agenda. These are some of the policy prescriptions informing Social

protection in Kenya:

2.2.1 Millennium Development Goals Millennium Development Goal 1; which speaks to eradicating extreme poverty & hunger. This is directly linked

with the overall goal of Social protection which is to reduce poverty and vulnerability.

2.2.2 Vision 2030 The Social Pillar of Vision 2030 which is the main development plan for the Republic of Kenya speaks to investing

in people to improve the quality of life. This links directly with Social Protection goals geared towards creating

opportunities, capacity etc. Vision 2030 aims at steering Kenya to a middle income economy which is anticipated to

improve the standard of living for its citizens.

2.2.3 National Food Security & Nutrition Policy To protect vulnerable populations using innovative and cost-effective safety nets linked to long-term development.

This particular policy informed the development of programmes such as the Urban Food Subsidy programme, and is

geared towards addressing both poverty and food insecurity.

2.2.4 National Social Protection Policy Thos policy was developed in June 2011 and aimed at reducing poverty and the vulnerability of the population to

economic, social, and natural shocks and stresses. This policy sets the basis for social protection intervention as it

preceded the Social Assistance Act of 2012 establishing the formal basis for engagement in Social Protection.

It has to be noted that the policy was an attempt to coordinate the different social protection interventions which had

previously been run by different ministries such as education, health, agriculture etc.

The main objectives of the policy are (Government of Kenya, 2012):

Protecting individuals and households from the impact of adverse shocks to their consumption that is capable

of pushing them into poverty or into deeper poverty.

Supporting individuals and households to manage these shocks in ways that do not trap them in poverty by

reducing their exclusion and strengthening their ability to graduate from social assistance and to become

financially self-sufficient.

Cushioning workers and their dependants from the consequences of income-threatening risks such as

sickness, poor health, and injuries at work as well as from the threat of poverty in their post-employment life.

Promoting key investments in human capital and physical assets by poor and non-poor households and

individuals that will ensure their resilience in the medium term and that will break the intergenerational cycle

of poverty.

Promoting synergies and integration among social protection providers as well as positive interactions among

stakeholders for the optimal functioning of this Policy.

The policy divides social protection into three distinct areas:

Social Security

Social Insurance

Social Assistance

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2.2.4.1 Social Security

Social Security in Kenya is governed under the National Social Security Fund (NSSF) Act, 2013. It has to be noted

that the act is read together with other provisions such as the Retirement Benefits Act, Pensions Act, Employment

Act to name a few. Of particular interest is Section 4 (a) of the NSSF Act which commits “To provide basic social

security for its members and their dependants for various contingencies …” (Government of Kenya, 2013). The

NSSF is governed by a Board of Trustees, with an ex-officio Managing Trustee. The fund is open to all employees

and self employed persons and provides benefits for themselves and their dependants. Benefits include retirement

pension, invalidity pension, survivors benefit, funeral grant and emigration benefit.

2.2.4.1.1 Social Security can be divided into three categories:

2.2.4.1.1.1 Public Schemes

Civil Servants Pension Fund

Local Authorities Pension Trust

Public Universities Superannuation Pension Fund

Workmen’s Compensation Fund

Widows and Orphans Compensation Fund

Parliamentary Pension Fund

County Pension Fund

2.2.4.1.1.2 Occupational Schemes Run by employers for their employees and are underwritten by private insurance companies.

2.2.4.1.1.3 Individual Schemes These are private schemes designed for persons who are employed, self-employed and/ or for those in non-

personable employment. These are underwritten by insurance companies, premiums paid based on anticipated

benefits after risk calculations.

Source: (Ministry of Gender, Children and Social Development, 2011)

Table 1: Social Security Schemes in Kenya

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Source: (Chitembwe, 2007)

Formal Sector & Informal Sector About 80% of Kenya’s work force is in the informal sector and only 15% of the population is covered by social

security old age benefit programmes (Turner John, 2013). Efforts by the social security fund to include the informal

sector are therefore vital for the growth of the fund as well as increasing social security benefits for workers. The

attempts to grow membership have included extending the benefit to single employee enterprises which were

previously excluded.

The table below shows workers and earnings by sector:

Source: (Kenya National Bureau of Statistics, 2012)

NB

Following reforms within government i.e. devolution, pension funds such as the Local Authorities Pension Trust

(LAPTRUST) was rebranded to the County Pension Fund (CPF) a Retirement Benefits Scheme offering retirement

benefits services to clients in the County Governments, Water Companies and Associated Organizations.

1 - National Social security

Fund

2- Civil service Pension

Scheme

3- Occupational

Retirements Benefit

schemes

4- Individual Retirements

Benefits Scheme

Figure 2: Coverage within the RBA

Table 2: Employment and Earnings by Industry

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2.2.4.2. Health insurance Only about 20% of Kenya’s population is covered by some form of health insurance. From that figure about 85%

are covered by the National Hospital Insurance Fund (NHIF) making it the principle insurance scheme for Kenyans.

It has to be noted that the scheme mainly targets formal sector workers. The remaining percentage is divided into

9% by private health schemes and 6 % by Community Based Health Financing schemes. (Deloitte, 2011)

Although coverage is low in the informal sector the list below shows other health financing practices in Kenya.

1. General tax financing e.g. free maternity care

2. National Hospital Insurance Fund

3. Private health insurance

4. Employer Funded schemes

5. Community based health financing (CBHF) schemes

6. Out of pocket (OOP) health spending:

7. Development partners & Non-governmental Organisations (NGOs)

8. Other Mechanisms: Two other financing mechanisms in Kenya are worth mentioning namely:

a) Mbao pension plan; this is a public-private partnership targeting the jua kali sector i.e. informal

sector workers, to contribute on an individual voluntary basis. It is regulated by the RBA.

b) Health Sector Services Fund (HSSF) under the Ministry of Health launched 2010. It is a form of

supply side financing to lower level health facilities (mainly health centres in the public sector but

will also in future cover FBO/NGO providers). It is aimed at improving service availability and

quality particularly for low income earners and the poor who are served by this level of

b) Output Based Approach Reproductive Health Voucher (OBA) is a form of demand side financing

that targets the poor. The poor buy the health vouchers at token prices and the voucher is

redeemed within a specific service provider network for specified health services. The OBA

program is managed by NCAPD under Ministry of Planning, administered by a private firm and

funded largely by donors key among them KFW and to a small extent the government.

The figure under social security on the distribution of working populations, also paints a picture on health insurance

penetration, presenting similar challenges with regards to financing and coverage of schemes.

2.2.4.2.1 The National Hospital Insurance Fund (NHIF) The National Hospital Insurance Fund (NHIF) which offers the widest coverage is governed by the NHIF Act No. 9

of 1998 and is compulsory for salaried employees. In an attempt to extend coverage to the informal sector,

membership has been opened up to the sector on a voluntary basis. Some of the services offered under the NHIF

include:

An in-patient cover for the contributor, declared spouse and children

Provides comprehensive medical cover in majority of over 400 accredited Government facilities,

Mission health providers and some private health providers across the country

Provides in-patient services in private and high cost hospitals on a co-payment basis

Comprehensive maternity and CS (Caesarian) package in government hospitals, majority of

mission and some private hospitals

Dialysis at Kenyatta National Hospital & Moi Teaching & Referral Hospital at a rebate

Family planning – Vasectomy and Tubal Ligation

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2.2.4.2.2 Proposed Reforms to Health Care and Financing in Kenya Recent reforms in the NHIF were embodied in the National Social Health Insurance Bill and Sessional Paper No. 7.

It has to be noted that reforms have punctuated healthcare since 1963 with key elements of the reforms centering

around decentralization versus centralization of the management of healthcare, increasing coverage of healthcare

services i.e. user fees versus free universal access and sustainability of financing for health care.

To this end several reforms have been proposed including:

To create a pool of funds to enable universal access of health care based on the principles of equity and

affordability, at the highest achievable standard.

Extend and diversify the range of benefits offered by the NHIF

Overhaul of NHIF from a hospital to a social health insurance fund

Exploring alternative financing mechanisms to increase funding in the health sector

Decentralisation of health sector management

Universal Health Coverage for all Kenyans

Achieving universal free primary health care

A proposed Healthcare Financing Policy and Strategy has been developed and is looking at increasing access

through affordability. There is currently a pilot Health Insurance Subsidy programme being implemented by

government and is similar to the cover that is extended to civil servants. There has also been the set up of a multi-

sectoral technical working group on healthcare financing operating under the Healthcare Financing Inter-agency

Coordinating Committee (HCF ICC) and the Health Sector Coordinating Committee (HSCC).

2.2.4.3 Social Assistance Social Assistance in Kenya as one key element of the Social Protection mix is governed under the Social Assistance

Act of 2013 and implemented together with other group specific legislation and policies. Some examples include the

Children’s Act, Persons with Disabilities Act, National Children’s Policy (2010), National Policy on Older Persons

and Aging, National Policy on Youth, National Policy for the Sustainable Development of Arid and Semi-Arid

Lands (2007). The Acts and policies are established pursuant to Article 43 (1) (e) of the Constitution giving effect to

the rights component looking to take care of persons considered vulnerable.

There are two components of social assistance:

2.2.4.3.1 Financial assistance Financial assistance refers to social assistance provided as:

(a) payment for food, shelter, clothing, fuel, utilities, household supplies and personal requirements;

(b) payment for special needs of the kind prescribed by the regulations;

(c) payment for care in residential institutions;

(d) payment for travel and transportation expenses;

(e) payment for funeral and burial expenses;

(f) payment for health care services; and

(g) comfort allowances and allowances for other needs of residents of residential institutions.

2.2.4.3.2 Social services Social Assistance refers to services which are intended to reduce, remove and prevent individuals from the causes or

effects of poverty, child neglect or dependence on public assistance, including:

(a) rehabilitation services;

(b) counseling services;

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(c) adoption services;

(d) day care services;

(e) community development services;

(f) consulting, research and evaluation services with respect to social programmes ;

(g) provision of income assistance or indigent relief; and

(h) administrative, secretarial and clerical services, including staff training, relating to the provision of any of

the foregoing services.

Unlike social security and social insurance which are dominated by contributory schemes, social assistance is the

first attempt by the social protection mix to have benefits accruing to non-contributory members of society.

Coverage of social security and social insurance has been on formal sector workers leaving exposed informal sector

workers who constitute the majority of workers.

2.2.4.3.3 Snap Shot of Social Assistance Programmes

Table 3: Social Assistance Programmes

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2.2.4.3.4 Snap Shot of Social Protection Programmes in Kenya

Table 4: Social Protection Programmes

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Source: (Ministry for State for Planning, National Development and Vision 2030, 2012)

2.2.4.4 Administration of Social Protection in Kenya The administration of social protection before the National Social Protection Policy was highly fragmented because

programmes were run by different implementing agencies. What this meant is that line ministries had their own

structures through which they implemented programmes. The National Social Protection Policy proposed a strategy

that would coordinate the different interventions reducing duplication and fragmentation of benefits which would in

effect compromise benefits to the most vulnerable.

However, it has to be noted that Social Protection in Kenya reflects three distinct branches all which are governed

by specific legislation and which defines its own structures. The Social Assistance Act of 2012 for instance provides

an alternative structure for the administration of Social Assistance as do the Social Security and Social Insurance

Acts. This again still creates the fragmentation that was being avoided by the policy, for instance the Social

Assistance Act provides for the creation of an Authority under a Board which has a mandate to create any other

structures it deems necessary for the achievement of its mandate.

Presently, the National Social Protection Secretariat housed in the Ministry of Labour, Social Security and Services,

is coordinating social protection activities in the country. Although the Secretariat is functioning it has no footing in

law and exists as a specialized unit with a cross cutting mandate. The Ministry also houses a Social Development

department which is charged with specific elements of social protection e.g. older persons, persons with disability,

orphans and vulnerable children etc. These departments have structures that extend to the county and sub-county in

the person of county coordinators and social development officers.

This has become the fundamental challenge with the administration of Social Protection as a whole as mandates, cut

across different ministries and the principle aim is to establish a coordinating mechanism which can then deliver

maximum benefits to the poor.

The National Safety Net Programme has already been created and puts all the five cash transfer programmes under

one coordinating agency which is the National Social Protection Secretariat (NSNP). The NSNP has established a

single registry and working toward a monitoring and evaluation system as well as a grievance mechanism that will

enhance efficiency and effectiveness of programme delivery.

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2.2.4.4.1 Structure for Coordination of Social Protection by the National Social Protection

Policy


Figure 3: Proposed Administrative Structure for Social Protection under the NSPP

Figure 4: Social Assistance

Administrative Structure

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3.0 Adequacy of Coverage of Social Protection Programmes Even with the impressive statistics put forth by the Kenyan government Social Protection measures cover only about

13% of the population (excluding civil service pension). (Ministry for State Planning, National Development and

Vision 2030, 2012). One has to take into consideration the domination of formal (contributory) safety net measures

in the coverage of mostly formal sector workers. Only about 20% of workers are in the formal sector meaning that

especially given that both social insurance and social security are dominated by formal sector employees who

constitute a minority of workers although with provisions existing to include informal sector workers, penetration is

still low. Only about 20% of Kenyans for instance are covered by social insurance schemes, this number could be

lower given the fact that formal sector workers tend to be the same individuals covered under private schemes

therefore enjoying parallel coverage again leaving out the majority; informal sector workers.

The issue of coverage of the informal sector especially in the contributory schemes cannot be ignored because

between 2005 – 2010 these schemes had the rapidest growth of about 18.5%, a factor aided by reforms that allowed

for voluntary enrolment and lower contribution rates as well as a diversification of services. Even with the growth,

insurance penetration among the informal sector is hampered by unpredictable income flows which discourage

many, pushing them to opt for out of pocket expenditure on health for instance.

Figure 6: National Hospital Insurance

Fund Administrative Structure

Figure 5: National Social Security Fund

Administrative Structure

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This increases the vulnerability o the informal sector given that health shocks tend to dip into assets and savings

plunging households further into vulnerability. Social insurance coverage and social security benefits offers a

cushion for shocks and stresses but given the poor coverage of both among informal sector workers this population

remains highly vulnerable.

Evidence suggests that targeted programmes are susceptible to errors of both inclusion and exclusion for instance it

is estimated that only 28% of OVCs and 0.38% of persons with disability are covered by programmes targeting poor

households. Even with perfect targeting only 25% of poor people would be covered by existing programmes

(Ministry for State for Planning, National Development and Vision 2030, 2012). There is geographic overlap in

programming as rural areas for instance which experience higher poverty levels are more likely to be targeted as

opposed to urban areas. Geographic targeting is aimed at rolling out country wide programmes which skews

delivery as the aim is to ensure even distribution rather than poverty based targeting. Some of the targeting

mechanisms in use vary from programme to programme and in most instances a mix of targeting mechanisms are

employed. The most commonly used targeting mechanisms include:

Community based targeting

Geographical targeting and resource allocation

Household targeting and Proxy means test

Given that targeting practices are often prone to errors and contributory mechanisms fail to reach a majority of those

who need social protection it can be surmised that interventions are inadequate. In addition, non-contributory

schemes fall short given that one of the guidelines for targeting is one can only receive money from one cash

transfer. Therefore if one has more than one vulnerable individual in a single household that is not taken into

consideration, neither is household size. Other concerns are inflation and delays in disbursement; timely and

predictable transfers are critical for both survival and coping.

Kenya is hiding behind progressive realization which buys them time in increasing coverage of programmes with

the key argument being that levels of poverty are high and consequently beneficiary numbers are also high. This is

an opportunity cost for government and therefore to ensure both sustainability and presence of capacity programmes

have to be scaled up gradually.

The table below shows a basic picture of coverage of some social assistance programmes based on key targeting

indicators.

Source: (Ministry for State for Planning, National Development and Vision 2030, 2012)

Figure 7:

Coverage of the

Poor by Relief

and SP

Interventions

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Source: (Ministry for State Planning, National Development and Vision 2030, 2012)

4.0 Budget Analysis & Trends on Allocation

Given the multifaceted nature of social protection mechanisms it is hard to cost the interventions as a whole without

making reference to budgets from health, education, agriculture, public works etc. However, government estimates

assert that budgetary expenditure on Social Protection has increased especially looking at the benefits paid out of

contributory schemes and investment in social assistance schemes. However, figures put forth by government

indicate that between 2005 and 2010 Kenya increased spending from Kshs. 33.4 Billion to 57.1 Billion. In addition,

increase in contributions to the civil service pension, NHIF payouts due to increased numbers of beneficiaries rose

to about 53%. The increase however cannot be fully appreciated as benefits accruing to the those covered by the

schemes but a significant portion is attributable to greater operational costs. During the same period expenditure on

safety nets also increased from Ksh 11.9 billion to Ksh 20.5 billion about 0.8% of the GDP. Collectively cash

transfer programmes in Kenya i.e. OPCT, UFSCT, OVC-CT, PWSD-CT, HSNP has increased coverage tenfold

since 2005 and currently covers 4% of Kenya’s population about 279, 843 households. Given that the population

living in poverty is more than 50% we can see the coverage of the programmes is still quite low and therefore more

resources need to be allocated.

Going by earlier precaution, budget expenditure on social protection including contributory schemes was dominated

at 53% by the General Food Distribution (GFD) programme. This means that examining real expenditure based on

all categorizations of Social Protection budgetary allocations would delve into expenditure on health and access of

health facilities, payments into pension schemes, education especially school feeding programmes and universal

primary education, and so on. It is estimated that government is the biggest spender in social protection accounting

for 55% of all financing going to the sector, followed closely by development partners at 22%. However it has to be

noted that 88% of all financing by government went to the civil service pension funded entirely by government. This

leaves only a paltry 12% to go into other sectors even though backed by other financing streams such as contribution

by members and development partners. Safety nets for instance are largely financed by development partners

staking 71% in interventions.

Table 5: Coverage of Safety Nets among the Absolute Poor

23


In 2010, it was estimated that with continued economic growth, if an additional Kshs. 20 Billion was pumped into

cash transfer programmes annually, comprehensive coverage of households with members deemed to be vulnerable

such as OVC’s, persons with disability, older persons and persons with chronic illness would be achieved in 9 years.


Given current trends in government expenditure, government continues to allocate funds to social protection in

general and safety nets in particular which enhance ways in which informal sector workers can fall under the

coverage of both NHIF and NSSF, to reduce vulnerability. Even with projections of comprehensive coverage of

vulnerable households in 9 years, government prioritization has spelt little to achieve this goal.

Since the new regime took over government spending in safety nets has constituently increased as is demonstrated

by the tables below. The following allocations were made for safety net programmes:

FY 2014/2015:2

Allocation Group

Kshs. 7,200,000,000.00 Orphans and Vulnerable Groups

Kshs. 4,900,000,000.00 Older Persons

2 Budget Statement FY2014/2015 Delivered by Cabinet Secretary for the National Treasury Mr. Henry Rotich

Table 7: Estimated Cost of Coverage for Vulnerable Groups

Table 6: Spending on Social Protection Programmes

Table 8: Budgetary Allocation for Safety Nets FY 2014/2015

24

Kshs. 800,000.00 Extreme Disability

Kshs. 300,000.00 Persons with other disability

Kshs. 300,000.00 Rehabilitation of Street Families

Kshs. 500,000.00 Insurance Cover for persons under Social Safety Nets

Kshs. 800,000.00 Child Welfare Society

Kshs. 400,000.00 Bursary Scheme

Kshs. 600,000.00 Resettling of Internally Displaced Persons (IDPs)

FY 2013/20143

Allocation Group

Kshs. 8,000,000,000.00 Orphans and Vulnerable Children


Kshs. 770,000,000.00 Severe Disability

Kshs. 452,000,000.00 Other Disabled Persons

Kshs. 400,000,000.00 Presidential Secondary Bursary

Kshs. 356,000,000.00 Urban Food Subsidy

Kshs. 100,000,000.00 Albino Fund

FY2012/20134

Allocation Group

Kshs. 4,400,000,000.00 Orphans and Vulnerable Children

3 Budget Statement FY2014/2015 Delivered by Cabinet Secretary for the National Treasury Mr. Henry Rotich

4 Budget Statement FY2012/2013 Delivered by Minister for Finance Hon. Robinson Githae



25


Kshs. 2,100,000,000.00 School Feeding Programme

Kshs. 2,000,000,000.00 Famine Relief

Kshs. 342,000,000.00 Persons with severe disability

Kshs. 925,000,000.00 Urban Poor Cash Transfer

5.0 Analysis of Kenya’s State of Social Protection Social Protection interventions in Kenya continue to grow and can be aptly described as being in the nascent stage.

This is not to say that social protection measures have not been around, quite contrarily traditional mechanisms for

coping with shocks and stresses have been around fostered strongly by the family unit. However, with recent

changes in the family unit other coping structures have had to develop and these have increased state led

interventions. The coming up with a proposed coordination mechanism to avoid duplication of interventions as well

as with an operational definition has cast a concrete policy direction towards poverty alleviation.

Social Protection in Kenya is continuing to grow but the rate of growth has to be examined against the backdrop of

both poverty rates and coverage of programmes. Above 50% of Kenyans live below the poverty line and 80% of the

productive population works in the informal sector.

Contributory schemes constitute the majority of social protection interventions which are dominated by the formal

sector, leaving out a sizeable number of beneficiaries occupied in the informal sector. Even though there are

attempts to expand coverage of the informal sector much more needs to be done. Social Security and Social

Insurance reforms are critical these should focus on sustainable financing and flexible contributions that allow

irregular income from informal sector workers.

Empowering vulnerable groups and stimulating markets through income generating activities and fostering coping

mechanisms is key in building resilience. One way is through programmes that reach those that are deemed to be

vulnerable and marginalized. The limited resources argument which gives credence to progressive realization and

targeting, unfortunately has allowed vulnerable cases deserving coverage (enrollment) to fall through the loops and

fall further into poverty. Targeting mechanisms have been fraught with irregularities including political interference

and human error. Increasing investment in Social Protection is key to reaching more vulnerable groups. Social

Protection provisions are fundamentally guaranteed rights under the constitution as well as in international charters

that the Kenya government has signed on to.

Essentially operational costs in programme implementation have to drastically reduce. This refers to NSSF and

NHIF expenditure which goes into administrative costs, in the case of NSSF 77% of contributions went into

administration. Another challenge is the fact that both funds are dominated by the formal sector workers yet payouts

by the NHIF were done more frequently to informal sector workers who contribute 50% less of what formal sector

workers contribute and only a mere 5% of the total fund. This is not sustainable over the long run. Alternative

financing mechanisms have to be put in place. Informal sector coverage has to be increased as well alternative

funding mechanisms which increase the resilience of vulnerable populations.

Social assistance measures are also up for reforms as spending on targeting and interference in targeting methods

means that coverage is limited. Investment in the sector needs to increase to ensure that more people who fall under

the informal sector are covered. Even with attempts to bring on board more informal sector workers to formal safety

nets (contributory), these need to be designed to remove late penalty fees, and allow for flexible remittance

structures that allow for payments on an irregular basis setting categories for benefits or having these matched by

26

government. The social protection fund would be great to kick start to ensure that a fund is available to supplement

costs. Targeting also needs to embrace technology in the collection, storage and access o information. The National

Safety Net Programme, is a great start in this regard, however the wastage already occurring from the manual

system.

Accountability and transparency in Social Protection programmes is weak. Firstly, accountability tends to be

upwards towards government and ministry officials rather than downwards towards citizens. This has meant that the

quality and effectiveness of programmes has not been a prudent consideration with respect to service delivery. It is

for this reason that issues of delayed disbursement, double dipping and corruption plague the programmes. The

NSNP proposes to institute a monitoring and evaluation framework, which is a commendable initiative which

should really encompass both an upwards and downwards accountability framework.

The establishment of a single registry is a great milestone for Social Protection programmes, it is key for the sake of

coordination of programmes which have sometimes been the subject of duplication both in terms of geographic

presence and beneficiary lists. This has led to missed opportunities to harness efficiencies and which could deliver

multiple benefits to recipients of programmes. Coordination will also ensure that capacity challenges are addressed

rather than having duplication of roles in different departments.

It has to be noted that a comprehensive social protection programme should in essence provide multiple benefits to

beneficiaries so as to ensure that poverty is addressed through a multi-faceted approach. There is no evidence to

support suggestions that a conditional safety net measure is more successful than an unconditional one. However,

there is logic is seeing how access to health, education services and a cash transfer for instance could benefit a

vulnerable individual. Social Protection programmes are designed to be complimentary in nature and act as a

catalyst for the enjoyment of other rights and social services.

Kenya is still a long way out with regard to ensuring that the vulnerable and marginalized are covered by social

protection programmes. The first instance of reform would have to be to establish the requisite structures and

systems to ensure that the institutional framework is in place to do what it is supposed to do. The second step would

be to increase coverage of programmes.

6.0 Recommendations

Increase coverage to informal sector

Evidently much work needs to go in to Social Protection programmes to ensure that both coverage and effectiveness

of programmes. One critical issue to address is the vulnerability that faces those working in the informal sector and

who often fall outside most formal safety nets. As a matter of priority efforts to bring reforms to the NSSF and the

NHIF are critical to ensuring that more Kenyans are covered by the scheme. These reforms should include

sustainable financing option for both the NHIF and means of enticing and retaining informal sector workers in the

contributory mechanisms. It may be of consideration to come up with a scheme dedicated entirely to the informal

sector. The Mbao pension scheme is a valid example o a scheme targeting Jua Kali artisans offering coverage to a

segment of the informal sector. Other schemes targeting organizations of informal sector workers can develop

pertinent schemes. This means that government also has to push for the establishment of formal societies for

informal sector workers.

27

Increased Investment in Social protection

Government needs to increase investment in Social Protection programmes this is especially true or safety nets

programmes and social health insurance. Current government expenditure on Social protection is low, and the fact

that the civil service pension scheme constitutes a large portion of spending means that interventions to the most

vulnerable are questionable. Civil servants need to shoulder part of the costs and relieve government of the massive

expenditure in their pension. This should be coupled with higher returns on contribution through investment as well

as reduction in administrative costs. Government needs to actively look at long term sustainable financing

mechanisms that start with increased budgetary allocation to safety nets which seem to be the principle recourse to

informal sector workers.

Increased Grassroots Demand for Social Protection

This lines up well with developing a strong grassroots push for services rather than leaving the social protection

discourse to the supply side. Demand for social protection services can very well link with monitoring and

evaluation components which look at both budgetary allocation and expenditure. This should also take into

consideration grievance and redress mechanisms that look at programme quality and effectiveness, translating policy

into practice and working out the kinks of day to day delivery of services.

Advocacy for Coordinating Mechanism for Social Protection anchored in Law

One key problem with the delivery of social protection services is the lack of a legitimate overarching structure to

coordinate social protection interventions. The social protection policy which attempts to bring together the three

arms as it were of social protection fails to give legal backing to the social protection council. Ass it stands the lack

of an institutional mandate compromises the delivery of services. Although the social protection secretariat exists,

one cannot ascribe its functions to the council which it is supposed to report to but rather works as an entity within

the Social Development Department of the Ministry of Labour, Social Security and Services.

Universal access to Social Protection

Targeting of programmes as a facet of implementation breaches the constitutional sanctity of the right to social

protection. Even though there is a premise of progressive realization the effects of poverty are dire. At a layman’s

level, poverty will not wait for the situation of government to get better for an orphan child to get a meal, or an older

person to access productive assets. The situation of poverty is not inlaid by delayed gratification but rather by the

here and now. That being said, universal access to social protection is paramount to reducing the failures of targeting

be it through exclusion or inclusion. This will effectively increase coverage of vulnerable groups not discriminating

between formal and informal sector workers.

These are by no means exhaustive but present a wide net through which reforms can take root to ensure that the

vulnerable and marginalized are cushioned and transformed from their situation of poverty.

28

7.0 Areas for Advocacy Intervention

There are crucial areas of intervention that are presented from the current state of social protection in Kenya that can

form the basis of key advocacy work.

Advocacy Issue Message Audience

Right to Social Protection Rights awareness on Social

Protection

Government

o Line Ministry

o Members of Parliament

o Members of County

Assemblies

Citizens

Civil Society

Coverage of Social Protection Universal access to Social

Protection

Available Social Protection

entitlements

Increased coverage to

especially vulnerable groups

i.e. women, children, informal

sector workers, older persons,

persons with disability etc.

Government

o Line Ministry


o Members of County

Assemblies

Citizens

Policy Reforms Establishment of Social

Protection Council

Creation of an East African

Social Protection Policy

Government


o Ministry of Labour, Social

Security and Services

o Ministry for East African

Affairs, Tourism and

Commerce

Table 11: Possible Advocacy Interventions

29

8.0 Conclusion

Social Protection interventions in Kenya are seen as being the pace setter within the region as Kenya is the only

country in the EAC with a policy in place. Although other countries within the region are actively involved in

developing their own policies, the Kenya example shows that challenges abound in the implementation of

programmes. It is not just a question of establishing policy direction, but also operationalising the policy through

legislation that creates institutions and mandates that then ensure the enjoyment of Social Protection rights. In

addition, political will is an essential catalyst to the fulfillment of Social Protection benefits, governments of the day

decide where on the priority list Social protection falls, but by creating a demand for Social Protection from the

grassroots one ensures that Social Protection becomes not just a political agenda but also a regime agenda. Social

Protection by design fosters social justice and equity thereby ensuring peace and legitimacy within a state.

Overarching structures such as the Universal Declaration of Human Rights and Africa Union Social Policy

Framework provides an entry in the appreciation of Social Protection provisions through which to bench mark

current and future interventions.

It is therefore most prudent for governments to move away from the rhetoric of sustainability of Social Protection

programmes and into investment in programmes and people who drive economies and thereby ensure that the social

contract is upheld. Social Protection does not exist in isolation and has been proven to impact on other causes of

vulnerability such as climate change, HIV/AIDS, terrorism, gender equality, food security etc. Drawing linkages and

increasing investment reduces overall poverty levels within a country.

Social Protection offers a clear impetus to the attainment of sustainability goals for the country as well as achieving

middle income status for Kenya specifically by 2030. Reforms and restructuring of existing institutions to ensure

that the maximum benefits are accrued to vulnerable and marginalized groups is critical. The effects of shocks and

stresses do not discriminate, meaning that we are all vulnerable but with the right coping mechanisms in place we

can easily transform our lives to ensure that there is full enjoyment and attainment of one’s fundamental rights.

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