A paper written by International Labour Organisation, examines the costs of different social security measures in order to determine whether low-income countries can afford social security. Essential health care is the most cost intensive part of the social security package. Social security, especially in health care is a core area of focus of the GTZ Health Sector Programme. Towards this end, GTZ HSP is currently supporting the Kenyan Government to develop a health financing strategy that incorporates pro-poor approaches towards providing health care in Kenya.
The reasons given for the need for social security are the following:
There are 4 different measures of social security suggested.
The total package would cost in the case of Kenya 8% of GDP.
If the Kenyan government does not change the share of the budget allocated to social issues, then the amount spent for these will be 1.6% of GDP by 2010. With these resources, less than 20% of the required financing for the social security measures would be available.
In a second scenario, the authors calculated with an increase of social spending to 1/5 of the governmentâ€™s budget. In this case 6% of GDP would be spent for social security in 2010 and 70% of the required resources for financing the proposed social securities would be available.
Domestic revenues available for social security are determined by both the fiscal space and political will to increase the share of public expenditure dedicated to this field. To close the remaining financial gap, measures like increasing the tax base could be taken.
Although this figures show that the financing of a social security package is possible for Kenya and other low-income countries, there are major constraints, especially concerning administrative feasibility. As such, the suggestions for the development partners, especially GTZ HSP – besides a direct financing – to strengthen the administrative and delivery capacity of national social protection institutions by providing the necessary technical advice and other support.
Follow link to download the full paper:Â Can low-incomce countries afford social security paper-1.pdf2009-09-27