KAMPALA, Uganda’s experience is consistent with findings in other African countries that have rolled out pensions and other cash transfers. According to a 2013 World Bank report, Reducing Poverty and Investing in People: The New Role of Safety Nets in Africa, in countries such as Swaziland, Ethiopia, Tanzania, Ghana, vulnerability grants targeting specific groups led to improved nutrition and use of social services such as education and health, as well as greater household productivity.
“In Kenya and Malawi, cash transfers led to increased investment in agricultural assets, including crop implements and livestock,” said the report. “Moreover, both programmes fostered increased food consumption and improved dietary diversity, with greater share of household consumption acquired from own-farm production.”
As more evidence emerges that cash grants can make an impact, it is still not known how sustainable they are. South Africa, where everyone over 60 and below a certain income/asset threshold gets an old-age pension under a system inherited from the apartheid era is an exception. In most sub-Saharan African countries – such as Uganda – cash transfers have been entirely or in part funded by donors, prompting the question: what happens if the donors pull out?
The World Bank estimates that social protection grants could cost as little as 2% or 3% of GDP of countries like Uganda. But some ask whether African governments are committed to social protection. Muhumuza points out the Ugandan government is already struggling to pay teachers and medical workers.
“Once the donors pull out, [ESP] will be a shaky thing and will probably have to wind up, or it will begin to default. I don’t see the government of Uganda [consistently] finding that much money,” Muhumuza said.
Pius Bigirimana, the permanent secretary in the Ministry of Gender, Labour and Social Development, said in a recent interview that the government was committed to social protection as a broad empowerment strategy. He said senior citizens’ grants had been budgeted for in the current financial year and would remain in the budget for years to come.