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Economic challenges that have been with us for the past 17 years have spawned a huge informal sector in our country.

Those who have lost their jobs or who are graduating from institutions of higher learning but are failing to secure jobs in a contracting market are, instead, employing themselves for a living. They are making household and office furniture, doing metalwork or selling a wide range of imported and locally made products.

While the sector is doing well to create jobs, people working in it lack social protection. When an informal trader or some in his family falls sick they struggle to raise enough money to pay health bills. When one dies relatives and family struggle to raise money to fund burial expenses. Because they are their own workers, their own bosses, for whom formal options to save for their long-term future were non-existent, retirement is out of question for them.

Retirement means instant loss of income and their dependants.  To avoid this, they continue working.

Such a situation is undesirable.

To ensure greater social security for the people employed in the so-called cash economy, the Government, through the National Social Security Authority (NSSA) last week unveiled pension and health insurance schemes for them.

Under the initiative, paid-up beneficiaries would be entitled to retirement pension, survivor’s pension, funeral grants and health insurance coverage.

The three voluntary schemes – Informal Sector, Health Insurance and Maternity Protection – will also include retirement grant, survivor’s grant, invalidity pension, invalidity grant and maternity cover as benefits.

The setting up of the schemes was published in Statutory Instrument 50 of 2018 in the Government Gazette last Friday. A Voluntary Informal Sector Board and Committee which includes NSSA’s general manager, the Statutory Instrument explained, will be established to run the schemes that will be open to Zimbabwean citizens between 16 and 65 years.

Members will be able to access benefits from the Informal Sector scheme upon three months’ contributions.

Payment of retirement benefits will be made upon reaching 65 years, while an invalidity pension will be available for those unable to continue to work. Surviving spouses and dependent children will be entitled to the pension benefits of a deceased member.

On the other hand, the Health Insurance scheme will include access to rural health centres, municipal clinics, general practitioners, ambulance and emergency services, as well as hospitalisation in government, municipal and mission institutions.  Other benefits include dental cover, physiotherapy, psychiatric services and access to drugs from any pharmacy. The Maternity Protection scheme will include prenatal and postnatal care and any prescribed medication.

The schemes are an innovative solution to the challenges that many have been facing all these years in a country that has historically paid little regard to the informal sector and held the formal sector as the beginning and end of employment.

We are unsure how other countries with big informal sectors handle the social security of their people who are out of formal employment but we believe that for those that don’t have them, ours should be an example worth following.

The schemes recognise that the people in the informal sector are as human as those in formal employment, thus require the social protections that everyone enjoys. They, too, recognise that at some point, someone may sustain a lifelong injury while at work, or may fall sick and be unable to work again.

They recognise that everyone gets old and at that point, he or she will be unable to work as much as they did during their younger years. Also, the schemes recognise that women will at some point in their lives fall pregnant and will need to access quality pre and post-natal services. The invalid will need to have some form of income, as would those who leave employment due to old age.

Traditionally, only the formally employed could contribute for them to be able to access a pension or medical aid. Without an insurance of some kind, many in the alternative economy suffered with limited access to health services and loss of income since it is always difficult for one to save for the day when they get sick or when they are too old to work.

We applaud the Government for taking everyone on board through the NSSA schemes. Now, anyone who contributes even if they are self-employed has somewhere to fall back on. To us, the schemes also represent a big, bold step on the road to Government’s efforts to formalise the informal sector.

It was a misnomer for the so-called conventional pension, health and maternity schemes to exclude the informal sector which commands such a huge contribution to the economy.

In January, the International Monetary Fund published a working paper titled Shadow Economies Around the World: What Did We Learn Over the Last 20 Years? that estimates that more than 60 percent of the Zimbabwean economy is informal. The Government estimates that the sector is worth between $3 billion and $7 billion.

It cannot be morally right for a serious government such as ours to leave out of social safety nets such a key sector which employs so many people. Actually, it is bad business to exclude an industry that holds so much money from the social protection schemes.

We urge those working in that market to take up the NSSA schemes by contributing regularly so that they are prepared for the rainy day which typically comes without warning.