Informal employment and decent work: Contributory Social protection for the informal workers in Tanzania

Informal employment accounts for more than half of all jobs in low income countries. In Sub-Saharan Africa the share rises up to 80% and even 90% if agriculture is included (Chen et al., 2005, Vanek et al. 2014). Tanzania is considered to have one of the highest levels of informal employment in East  Africa. In  2017, it was ranked by IMF as the country with the second largest share of informal economy in Africa after Nigeria. Also the Integrated Labor Force Survey (2014) shows that informal employment in Tanzania constituted 75.9% of non-Agricultural Employment, bringing it in the top 4 countries with high non-agricultural informal employment after India, Mali and Pakistan (Vanek et al. 2014).

The majority of people who work in the informal economy are engaged in vulnerable employment ILO (2002). The statistics for Tanzania show that 83.4% of all employees are vulnerable meaning that they are unlikely to have formal employment and access to social protection (NBS 2014). This implies that the large size of the informal employment in the country is a challenge for  national development not only due to its limited contribution towards government revenues from taxes, but also for the employees concerned. The 2002 International Labor Conference Resolution on Decent Work and the Informal Economy marked an important milestone in this concern as it suggests a comprehensive response based on the four pillars of Decent Work (Employment, Rights, Social Dialogue and Social Protection) in order to bring the informal economy progressively into formal channels of social protection (ILO, 2013). However, effective ways to address the challenges related to decent work for the informally employed still remains an uphill struggle. For example, most social protection programs either focus on the very poor who do not or cannot work or on employees with formal employment.

To address this challenge the government of Tanzanian in collaboration with development partners has been progressively seeking to develop effective strategies to address the decent work agenda within informal employment. The development of a social security policy in 2003, the Social Security Act in 2008 and its amendment in 2012 provided room for social security schemes to accommodate the informal sector. Also, there has been several interventions aimed at extending social security coverage to the informal sector such as the Tanzania action fund (TASAF), which is a cash transfer program for poor segments of the population; and the Community Health Fund (CHF) which is a voluntary health insurance scheme for the informal workers. For the current Five Year Development Plan (2016-2020), the improvement of the CHF is one of the main priorities in achieving universal coverage. Several improved CHF programs have already been implemented in different parts of the country. But still, recruiting and retaining informal workers in CHF schemes remains a challenge.

This project aims to bring an understanding of the key drivers that determine the sustainability and coverage of voluntary social security schemes for informal workers in Tanzania by assessing on-going reforms in the community Health Fund (CHF) in Tanzania. Specifically, the study seeks to answer the following research question: 1. What factors influence informal workers' decision to enroll/contribute into a respective Community Health Fund?; 2. How do the enrollment strategies across different CHF models affect the level of scheme uptake?; 3. What is the effect of the ongoing health  insurance plans/programs for the informal workers on universal social health protection in Tanzania?; and 4. How does the Public-Private Partnership (PPP) impact the transformation of CHF into a sustainable health insurance scheme? The study uses information from key informants at national regional and local government authorities; Focus group discussions and household survey from two CHF models.