MINISTER AMONGI LAUNCHES UNRA-NSSF PARTNERSHIP TO SCALE UP COMPLIANCE IN THE ROAD SECTOR.

The minister of gender, labour and social development,hon Betty Amongi has today launched a key initiative aimed at scaling up compliance and expanding social security contributions among companies contracted by UNRA to undertake road construction. In her speech, The minister noted the urgent need for change in the labour market to secure a better future for the country's young population.

She applauded the UNRA- NSSF partnership as key since UNRA spends over 2trillion on contracts executed by private construction companies who employ Ugandans,yet currently these construction companies are remitting only 40% of the social security contributions for their workers. She opened that such initiatives will be scaled up to other government MDAs.

The minister asserted that currently,  there exist labour -capital conflicts resulting in exploitation of workers. She stressed the importance of establishing a fair income distribution between labour and capital, aiming to increase the proportion of workers income in the national income distribution.

The minister highlighted the challenges faced by Uganda,including disguised unemployment,workers without contracts, and exploitation of workers with many working without contacts.

The A.g MD Mr Patrick Ayota presented a comprehensive plan to accelerate social protection based on the NSSF amendment act with the primary objectives being to expand coverage and increase compliance. The national social security fund (NSSF)was tasked with raising membership of contributions and enduring a larger proportion of workers were covered.

The minister urged all stakeholders and employers to comply with the law and to integrate all the aspects of social protection coverage such as health care, maternity protection, unemployment support,and retirement benefits.

PHOTOS:

Details ........

UNRA-NSSF PARTNERSHIP WORKSHOP

SPEECH OF THE HON. MINISTER OF GENDER, LABOUR, AND SOCIAL DEVELOPMENT.

 

It is my honour and privilege to welcome you to the UNRA-NSSF Partnership Conference – a first-of-a-kind gathering that sees two important Government Agencies coming together to implement a strategic program of the Government of Uganda.

Uganda’s economy has seen rapid development of the private sectors of the economy over the last decades. This growth has also seen labor-capital conflicts and contradictions worsened, characterised by low payment of wages, exploitation of labour force, abuse of rights of workers, no contract for workers etc.

Ofcourse, for many of you in this room, economic interest is the most basic unit of the labor-capital relations, so you wish is to save as much as possible on wages and other benefits for workers. Am here to convince you that it is crucial to determine a reasonable proportion of income distribution between labor and capital by companies and private sector players. 

As a Minister incharge of labour, employment and industrial relations, my role is to assess how to increase the proportion of workers’ income in national income distribution and raise the proportion of labor remuneration in the primary distribution. currently, the proportion of workers’ income represents too small a share in the national income, and so is labor remuneration in the primary distribution. We thus, need strutural adjustment to the distribution of national income while retaining continued growth of the enterprises and their normal income, we must make efforts to raise the proportion of labor remuneration and keep income inquality in check so as to ensure that the income growth of both urban and rural residents is no lower than the rate of economic growth, and that labor payment is not lower than the growth rate of the economy.

Uganda has the second youngest population in the world.  The life expectancy of our country is now about 64 years.  Without significant structural changes in our labour market, the young people of today will face a very uncertain future when they cross the threshold of their most productive years.  Uganda’s official unemployment rate in 2020 was 1.7%.  But this hides significant and “disguised unemployment”.  The active labour population is about 16 million.  Of these, more than 80% are described as subsistence workers – literally living from hand-to-mouth.  But there are deeper underlying issues in these statistics:

 

1. At least one-third (1/3rd) of the subsistence workers is excluded from the employment statistics. In very simple terms – this is exploitation.  Yes, this is happening today in Uganda and one of the sectors where it is most prevalent is construction.

 

2. We also observe that when it comes to what we refer to as “casual labour”, the absence of formal contracts is such that many workers are “employed” but left without work for significant periods of the time they have available to work.  In this sense, they are denied benefits for forgoing time they would have spent being productive.

 

3. You all recall that during Covid, workers without contracts were the most affected in terms of being vulnerable to slipping back into subsistence agriculture.  Many simply packed their bags and went to “dig”.

 

4. Exploitation of labour is also very prevalent in the refugee community of Uganda, a country that has one of the friendliest refugee policies globally.  This has attracted a large refugee population who are vulnerable to exploitation.

 

5. Finally, my Ministry’s statistics indicate that there is still a very wide gap when it comes to earnings by women – typically earning just 38% of what men take home.  

 

Against this backdrop, we cannot talk about full monetization of the economy when only 3% of the population is covered by at least one formal social protection benefit.  

 

The Government of Uganda is responding to these challenges with a sense of purpose and urgency.  In January 2022, His Excellency The President, signed into law the National Social Security Fund Amendment Bill – which is a breakthrough Act.  It essentially gives individual informal workers access to a pension for the very first time.  The law of course is a tool for us to use to implement the intended policies of the Government.  As the Minister in charge of Labour, Gender and Social Development, my role is to ensure that Uganda reaps the full benefits of this law.

 

Allow me now to spend a bit of time to share with you our plan for accelerating social protection based on the NSSF Amendment Act.  With this law in place, we will focus on two core objectives, which extend into the NSSF Strategic plan:

 

1. Expand Coverage: Today, NSSF has a membership of about 1.6 million members, of whom about half are active contributors.  If we assume that the labour population is 16 Million, NSSF membership represents just 10% of this, and only half of these – predominantly salaried workers – are active.  I have challenged the NSSF’s Executive Management to increase coverage to at least 50% in their new 10-year strategic plan.  It is a big challenge in a country where 85% of the working population is officially described as poor.  Can you extract savings from someone who cannot feed themselves?  To expand coverage, we cannot run away from the responsibility of "increasing capacity to save”.  These are the initiatives that focus on “monetizing the informal economy”.  Our challenge to NSSF puts them in a very unique position to do what no other national saving scheme in the region has been able to do – participate directly in a Government strategy to increase wealth nationally.

 

2. Increase compliance: The capacity to save is significantly undermined by non-compliance to the laws and regulations of Uganda.  That is why we are here today, i have been empowered by the law to bark and bite, and I could choose to startvwith biting hard should you choose not to comply with the law.  I have however, chosen to start with engagement. Thats why we are here today. I would like to put more emphasis on this issue of compliance by highlighting the ILO rankings of Uganda when it comes to Labour Market efficiency.  1 is the highest rank and 141 is the lowest:

a. Payment of redundancy costs – 21

b. Cooperation in labour-employer relations – 70

c. Active labour market policies – 105

d. Workers’ rights – 77

e. Pay and productivity – 100

f. Ratio of wage and salaried female workers - 104

 

You can appreciate from these findings that non-compliance plays a major role in undermining the Government’s efforts to extend social protection universally.  

 

We shall therefore, start implementing specific strategies to achieve the intended results of expanding coverage and increasing compliance.  In both cases – there is a heavy reliance on strategic partnerships. These includes;

 

Strategy I: Engage & Mobilize Stakeholders to the cause:

 

Under this strategy, our goal is to bring the most critical stakeholders together to work in unison to bridge the existing compliance gaps, learn and adopt best practices in social protection, and enforce the law.  The important stakeholders include Agencies, Partner Ministries, Apex bodies under whom many workers have membership, Regulators, and Labour Unions – whose membership accounts for a large number of informal organized workers via bodies like “Amalgamated Transport and General Workers Union. Today, we have shown you we are serious about mobilizing stakeholders when three Ministries, Two Government Agencies, and one Apex Body - Uganda National Association of Building and Civil Engineering (UNABCEC) converged under one historic partnership.

 

 

Strategy II: Leverage Technology

 

Working with their counterparts at UNRA, NSSF has done some analytics to determine the compliance rate of Contractors who are undertaking work on behalf of UNRA.  Less than 50% are complying with the NSSF Act.  We will use technology to understand this kind of data better, to help our Contractors to plan better, and ultimately to help law enforcement and the judiciary to enforce the law.

 

Strategy III: Increase awareness.

 

When you break the law and your excuse is that “I did not know”, unfortunately you will still face the consequences.  In this case “Ignorance will not be bliss”.  However, we are going the extra mile to sensitize both employers and workers about the new law and their obligations under the new dispensation.  We began this effort with NSSF under the “Now you can” campaign.  This conference is also part of our deliberate effort to increase awareness.

 

Strategy IV: Corporate Social Investment.

 

Uganda’s economy is dominated by micro and small enterprises and many individual informal workers.  These are the most vulnerable communities when it comes to missing out on financial inclusion.  NSSF, under their strategic objective of increasing capacity to save, is addressing this population through the following initiatives:

 

1. Hi-innovator: Together with the Mastercard Foundation, USD 10 million has been put aside as “catalytic funding” for Small-and-Medium-size Enterprises (SMEs) to improve their entrepreneurship skills, access seed-capital, and secure access to “accelerator programs” to help them scale.  132,000 jobs will be created via this initiative alone.

 

2. “Jua-Kali” initiative: Partnering with leaders in digital business models, NSSF is connecting workers in the Jua Kali community to work opportunities via digital platforms.  NSSF is supporting digital platforms like Uncle Bob with awareness and capacity building (to train informal workers), who eventually find more work via the platform – and save seamlessly on the same.  Such platforms will eventually be sources of credit, insurance, and pensions for these workers.

 

3. Livelihood Programs to address rural communities: The Fund is working with strategic partners to specifically address the challenges around market linkages in rural communities.  Most of the effort will impact farmers who account for the bulk of subsistence workers. The Fund will intervene to establish national off-take vehicles with strategic partners to address the challenges around aggregating demand, and to improving standards on inputs and processing to help unlock new domestic and international markets.  Our role will also extend to mobilising rural agriculture workers into Cooperatives with formal employment structures.

 

4. PPPs: As Government looks to reduce its appetite for loans, PPPs will become a more prevalent method of developing and maintaining infrastructure.  This includes procurement of roads where the Government is committing over half of the works and transport sector’s UGX 4 trillion budget to our sister agency UNRA.  As Government invests in infrastructure – jobs are being created.  But to get a piece of this pie, we will require Contractors to comply with the NSSF Act for the protection of workers’ rights.

I therefore, call on all stakeholders and employers to comply with the law. Contractors under UNRA for example has compliance rate of abput 40%.  This means, for every 10 workers, 6 do not have social security coverage. To NSSF, you should scale up such partnership which can enable you to reach volumes of employers in just one enegagement like in this room. With this approach, our compliance will increase. I urge you to utilise labour officers whose mandate is to enforce compliance by law. It is through collaboration that we can achieve 100% compliance. Let me remind you remind you that under ILO, Social protections are comprised of nine main areas: child and family benefits, maternity protection, unemployment support, employment injury benefits, sickness benefits, health protection (medical care), old-age benefits, invalidity/ disability benefits, and survivors’ benefits. I urge you to incorporate all these to your workers.

 

I would like to thank the team at NSSF under the leadership of Patrick Ayota for following through with this initiative that we discussed back in December 2022.  The UNRA-NSSF partnership is just the beginning of many more such partnerships to get more Ugandans into the money economy.  This in fact is an act of patriotism.  As vested partners, let us continue to work to improve the quality of life of majority of our citizens.

 

I thank you and wish you fruitful deliberations over the next two days