Assessing the potential of strengthening social security services into the informal sector: a case of Iganga Town Council market vendors

Abstract

The provision of social security remains a problem in Uganda. It is generally spread in both the formal and informal sectors. However, comparatively speaking, the formal sector stands more advantage than the informal one since there is some degree of coverage through the NSSF. With the above scenario, informal sector workers are left with no option but to devise different strategies to address their social security needs. This study therefore, was set out to establish the potential of strengthening social security services to the informal sector. The study was conducted in Iganga District, Iganga Town council, targeting market vendors in Iganga central market and Kaliro road market. It employed a cross section study design and involved interviews with market vendors operating in the two markets. It employed both qualitative and quantitative data collection techniques thus, interviews were conducted using questionnaires and key informant interviews were conducted using an interview guide. A sample size of 80 respondents was obtained; involving 65 market vendors and 15 key informants. Documentation of the available schemes was done in line with the study objectives and it was revealed that there are a number of schemes that have been put place to serve the purpose of providing social security services in the sector. These included among others: Agali awamu, black foundation, FrontPage, FINCA, ICEMA, munno mukabi, tweyambe, nsoni bwavu,fish mongers’ association and others with no names. An assessment was done of the different ways through which social security services can be strengthened in the informal sector and the findings revealed that a number of strategies can be adopted to address the necessity for social security provision and consolidation. These include: sensitization of potential members, Government intervention through provision of loans, strengthening leadership of the existing schemes, setting up income generating activities, formalization of existing schemes and making it an obligation for informal sector employees to contribute (by law). A number of factors were identified as being responsible for the low coverage of social security schemes in the informal sector. Among others, these included: fear to have property confiscated, making it hard for potential members to join existing schemes, Government’s failure to provide incentives to the informal sector workers, daily demands which can not allow potential members to make savings, weak groups, poor leadership, lack of security to guarantee loans and low capital. Based on the study findings, the study recommended that Government should intervene and develop special schemes to address the social security needs of the sector, initiate micro insurance schemes and strengthen mutual aid societies through creating awareness and provision of financial and technical support.