Budget Brief 2017: Social Protection
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- Moris Greer
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1 Photo credit: UNICEF, 2017 Budget Brief 2017: Social Protection KEY MESSAGES 1. The Ministry in charge of Social Protection is only allocated 0.57 per cent of the Total State Budget in This weak share explains the many challenges encountered by the Department in charge of social protection within the Ministry to properly coordinate interventions in the sector. Real spending on social protection is less in 2017 than in The ongoing crisis serves as opportunity for Burundi to present a coherent national cash transfer program as key instrument to support the poorest and most vulnerable households and to strengthen their resilience. 3. Expenditures need to increase to their 2013 level to enable the implementation of a cash transfer program benefiting 50,000 households. A cash transfer program targeted at 100,000 or 150,000 households would costs 1.37% and 1.89 % of GDP, respectively. 4. The significance of social protection needs to be clearly communicated. If prioritized, the Government would have enough public resources available to finance a substantial cash transfer program despite budgetary austerity. 1. Introduction In April 2011, the Government of Burundi adopted its National Policy on Social Protection (NPSP) underscoring the importance of reducing widespread poverty and vulnerability through the provision of social safety nets aiming to improve the lives of the most vulnerable children and their families. A coherent program for social protection is one of the crucial elements to reduce high levels of (child) poverty and vulnerability in the country (see Table 1). Social protection includes contributory programs such as medical or unemployment insurance and public pension schemes as well as noncontributory programs. Social safety nets aim at transferring resources (transfers in kind, cash or vouchers) to the most vulnerable and poor households in order to increase household consumption of basic commodities and facilitate access to health services and education. UNICEF Burundi in collaboration with the Government of Burundi, the World Bank and other technical and financial partners in the sector are currently developing a first pilot cash transfer project targeting more than 40,000 households. Table 1: (Child) Poverty rates Poverty Rates National poverty line (636,510 BIF) Old international threshold (1.25 USD) New international threshold (1.90 USD) Total Population Source: ECVMB 2013/2014 Children (> 18y) 65% 69% 70% 74% 86% 89%
2 2. Allocations to social protection resume after the 2015 crisis (i) Slight increase in allocations to the social protection sector in After allocations to social protection decreased in 2016 as a consequence of the sociopolitical crisis which resulted in temporary suspension of donor support, allocations to the social protection sector have resumed in In 2017, billion BIF (85 million USD 1 ) were allocated to the sector, representing a 48% increase compared to allocations in 2016, but remain 26% below 2015 precrisis allocations. Nonetheless, this slight improvement is rather superficially and if inflation tendencies are taken into account, the volume of allocations in 2017 linger at the 2011 level (see Fig. 1). Furthermore, the analysis of allocations by financing source shows that public resources to the sector stagnate and have only increased by 2% in nominal terms between 2016 and On the other hand, external resources increased by 199 per cent. This considerable increase in donor support is mostly attributable to increased foreign aid for (i) the purchase of vaccines; (ii) activities related to the prevention and management of HIV/Aids; (iii) activities aimed at fighting sexual and genderbased violence and (iv) assuring access to feefree health services and the functioning of the Performancebased financing mechanism (see Fig. 2). (ii) Reverse tendency in the social protection sector compared to overall tendency within State Budget with regards to foreign support. As illustrated in Fig. 3, in contrary to the overall tendency, characterized by decreasing foreign resources within the State Budget (49.5% in 2015; 30.2% in 2016 and 28.4% in 2017), donor support to the Burundian social protection has been increasing (46.6% in 2017 compared to 23.1% in 2016). 3. Composition of budgetary allocations to Burundi s social protection sector In Burundi, the Ministry of Human Rights, Social Affairs and Gender is in charge for the coordination of social protection services. However, several other Ministries oversee interventions in the area of social protection, most notably, the Ministry of Public Health, the Ministry of Education and the Ministry of Fig. 1: Trends in allocations to Social Protection (in billion BIF) Allocations to Social Protection Allocations to Social Protection (inflationadjusted) Fig.2: External vs. Domestic Allocations, (in billion BIF) External resources Domestic resources Fig.3 : AidDependency (Shares) Total, Allocations 76.9% 53.4% 42.5% 49.5% 30.2% 28.4% Social Protection Total State Budget Source: Financial Laws , Ministry of Finance Agriculture (see detailed table in annex). If allocations are portioned by Ministry, the Ministry to which most resources are allocated to is the Ministry of Health (57%), followed by the Ministries of Education (20%) and of Agriculture (18%) (See Fig. 4). 1 1 USD = BIF (Exchange Rate, April 2017)
3 The most significant budget lines receiving the biggest bulk of resources are the allocations guaranteeing the gratuity of health services (22.9 billion BIF) and allocations for the procurement of vaccines (18.7 billion BIF). The Ministry of Human Rights, Social Affairs and Gender, in charge of the social protection sector, only receives 5% of allocations to the sector, and the Ministry s budget represents less than 0.57% in the Total State Budget. Similar to previous years, the Ministry only receives limited attention and resources compared to other Ministries (see Fig 5) challenging the satisfactory coordination of the social protection sector. The absence of a true cash transfer program further explains the weak proportion of resources made available. On the contrary, resources allocated to the social protection sector are as follows (ranked by order of importance): (i) gratuity of health services (29%); (ii) subsidies in support of vaccine procurement (14%), (iii) university scholar ships (12%); (iv) subsidies to improve the food security of poor communities; (v) health insurance; (vi) subsidies for seeds and grains (see Fig. 6). Ministry of Agriculture 18% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Fig.4. Share of Allocations by Ministry, 2017 Ministry of Social Affairs 5% Ministry of Health 57% Fig.5. Share of Budget of the Ministry of Social Affairs within State Budget Ministry of Education 20% Share (%) Source: Financial Laws , Ministry of Finance Fig.6: Share of allocations by type of intervention, 2017 Other assistance to vulnerable groups School cantinas and school insurance Gratuity of school fees 29% 0% 7% 11% 5% 2% 3% 3% 12% 7% Common Fund for Education University scholarships and other subsidies Health insurance Subsidies for Vaccines 4% 3% 14% Subsidies for essential drugs (Vitamin A, AntiMalaria) Prevention and care to vulnerable groups (HIV/Aids, SGBV) Gratuity of health services Development of basins and swamps Subsidies for seeds and farm inputs (fertilizers) Source: Financial Law 2017, Ministry of Finance
4 4. Limited national effort to finance the social protection sector in Burundi National effort to finance the social protection sector so far has never attained the 4% of GDP benchmark and remains below 11% of Total Budget allocations, despite the recent augmentation after the decrease in 2016 (see Fig. 7a & 7b). National endeavors to prioritize social protection interventions, thus, remain weak taking into account widespread poverty and vulnerability. In fact, 69% of children are poor in monetary terms and 78.2% 2 suffer from at least three types of deprivations (multidimensional poverty). Even worse, if the international threshold of 1.90 USD per day (per adult equivalent) is considered, 89% of Burundi s children are poor meaning they live in households that do not have enough financial means at their disposal to cater for their children s basic needs and thus only limited capacity to provide them with quality social services (see Table 1 and Fig. 8). The lack of a proper cash transfer program as well as a weak health insurance coverage rate are consequence of the small proportion allocated to the social protection sector in Burundi. Despite considerable efforts made over past years, notably the introduction of feefree access to health services and primary education, the ongoing crisis reinforces the need to establish a structured system of social safety nets to protect the most vulnerable populations. Labourintensive public work programs, such as the program previously supported by the Belgium Development Cooperation have been suspended as a result of the crisis. The envisaged cash transfer program will cover 48,000 of the 300,000 poorest households in Burundi 3 and will provide for some relief amongst the most vulnerable populations of the country, but remains insufficient to respond to all people in needs in the country. The fiscal space analysis for the potential implementation of a cash transfer program (ECORYS 2016) has shown that it would be possible to finance a cash program, which is covering 50,000 ménages, if resources are only slightly increased to 0.85% of GDP. A cash transfer program targeted at 100,000 or 150,000 households would costs 1.37% and 1.89 % of GDP, respectively. More specifically, the national effort of ensuring that 50,000 households can benefit from a cash transfer program, would requires to return to the 2013 level of allocated resources. This is entirely possible even within Burundi s current context, which is expected to profit from a 2% GDP growth rate in 2017 according to the IMF). This analyses and considerations demonstrate that the social protection sector is foremost victim of lack of prioritization and political effort, rather than lack of resources. 20.0% 0.0% 20,000 10, % 2.8% 2.6% 3.1% 3.8% 1.9% 2.6% Source: Financial Laws , Ministry of Finance Fig. 7.a: National effort to finance social protection Allocations to social protection / GDP Source: ECVMB 2013/ % 0.0% Share of allocations to social protection within State Budget Fig. 7.b: GDP/capita vs. per capita allocations to social protection (in BIF) 2.5 Nominal GDP/capita (current BIF) 500,000 Per capita allocations to social protection Fig. 8: Percentage of children suffering from (overlapping) deprivations (%) Enquête sur les Conditions de Vie des Ménages (ECVMB 2013/2014). 3 The program will be implemented in 4 out of the 18 provinces of the country
5 Annex 1: Repartition of resources by type of allocation (in million BIF) Allocations to the social protection sector Other assistance to vulnerable groups 8,185 8,435 9,694 9,604 9,475 7,969 7,760 School cantinas and school insurance 3,047 3,050 3,050 3,050 3,050 2,750 2,650 Gratuity of school fees 3,900 4,047 4,209 4,094 4,161 3,870 3,870 Common Fund for Education 19,813 23,700 37,927 66,219 87,185 12,843 4,600 University scholarships and other subsidies 12,813 14,543 19,309 17,703 18,086 17,001 17,001 Health insurance 1,157 2,343 2,343 12,905 9,236 8,774 9,376 Subsidies for Vaccines ,514 1,662 1,159 19,934 Subsidies for essential drugs (Vitamin A, AntiMalaria) Prevention and care to vulnerable groups (HIV/Aids, SGBV) ,698 4,838 4,890 1,800 1,615 1,646 1,584 1,584 1,984 5,742 Gratuity of health services 12,385 16,650 17,930 16,248 19,918 17,926 41,802 Development of basins and swamps , Subsidies for seeds and farm inputs (fertilizers) 9,600 9,565 26,180 21,000 33,572 10,063 9,972 Food security of poor households 1, ,760 15,831 72,708 84, , , ,295 97, ,827 Annex 2: Selected foreign support in the area of social protection Donor Project Period USD AfDB Projet d Appui au Programme de Création d Emplois (PAPCE) ,500,000 AfDB Projet Multisectoriel de Réinsertion SocioÉconomique (PMRSE) ,000,000 AfDB Projet d aménagement des bassins (PABVAR) Depuis juin ,070,000 World Bank Projet de Travaux Publics et de Gestion Urbaine (PTPGU) ,000,000 IFAD, OPEC, Belgian Fund for Food Security IFAD EU, WFP IFAD EU EU Programme Transitoire de Reconstruction Post Conflit (PTRPC) ,700,000 Projet d'appui à l'intensification et à la Valorisation Agricoles du Burundi (PAIVAB) Programme National de Sécurité Alimentaire et le Développement Rural de l'imbo et Moso (PNSADRIM) RAMBA Rendre Accessible les services de santé Maternelle, jeune et adolescent Beaucoup plus Améliorés Projet pour accélérer l'atteinte de l'omd1c au Burundi (PROPA O) ,600, ,400, ,399, ,200,000 Belgium, UNDP Développement socioéconomique à travers le pavage à HIMO ,540,000 Belgium, UNDP Programme de développement économique et social par la mise en œuvre d'un programme de pavage à Haute Intensité de Main d'œuvre ,084,000
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