Reforms in Africa to extend contributory old-age pensions to difficult-to-cover groups

Reforms in Africa to extend contributory old-age pensions to difficult-to-cover groups

The extension of social security coverage is a key topic for the International Social Security Association (ISSA) and its members. It is one of the main ISSA topical priorities for the 2023–2025 triennium, with particular emphasis given to innovations and strategies to extend contributory social security schemes to the self-employed, workers in the informal sector, migrant workers and other difficult-to-cover groups.

Over the past three years, several African countries have reformed their social security systems to extend coverage of old-age pensions to these difficult-to-reach groups. This article highlights developments that took place in Côte d'Ivoire, Egypt, Morocco, Nigeria, and Zambia.

The context

An important part of the global population still has no access to social security coverage. Within Africa, the International Labour Organization (ILO) estimates that only 17.4 per cent of the population is effectively covered by at least one social protection benefit. Among the older population, there is a slightly higher coverage rate of an estimated 27.1 per cent who receive a pension (ILO, 2021, p. 47).

Often the lack of coverage is related to an individual’s employment status. Social security systems were often designed with full-time, urban employees in mind. Many systems do not cover, or only partially cover part-time, temporary, agricultural, self-employed, and informal-sector workers. Employment-related contributory systems, such as social insurance or employer-liability systems, have particular difficulties in covering these groups.

For instance, of the 50 African countries surveyed by ISSA and the United States Social Security Administration (SSA)  in 2019, 47 had contributory pensions schemes, and, of these, 32% did not cover self-employed persons (15 countries; ISSA/SSA 2019).

Chart 1: Legal coverage of self-employed persons under contributory old-age pensions in Africa (2019; no. of countries: 47)

Chart 1: Legal coverage of self-employed persons under contributory old-age pensions in Africa (2019; no. of countries)

Source: ISSA/SSA, 2019 (As reported by countries for the ISSA/SSA country profiles. Mandatory legal coverage and actual effective coverage may differ.)

Aside from legal challenges, difficult-to-reach groups often face practical barriers to coverage. These can include low and/or unstable income, the lack of a formal employer-employee relationship, frequent changes of job or place of work, and other barriers such as literacy, language barriers, lack of formal identification documents, remoteness, and inadequate access to financial services.

The high levels of income insecurity and poverty that these groups face make social security coverage especially important. Yet, simultaneously, it raises the question of how to effectively finance the benefits for these difficult-to-reach groups, who may not have the same financial capacity as current members nor, in many cases, an employee-employer relationship.

Below are a few examples of African countries that recently undertook legal reforms to make it easier for difficult‑to‑reach groups to enjoy old-age pensions.

Côte d'Ivoire creates a new special system for self-employed and informal-sector workers

In March 2020, Côte d'Ivoire made a significant reform to its social protection system by extending mandatory coverage to the self-employed and informal-sector workers Through Ordinance No. 2019-636, and the follow-up Decree No. 2020-308, the country set up a special Social Security Scheme for Self-Employed Workers (Régime Social des Travailleurs Indépendants – RSTI) as part of its strategy to reach 50 per cent social protection coverage by 2025.

Run by the Social Insurance Institute - National Social Insurance Fund (L'institution de Prévoyance Sociale Caisse nationale de prévoyance sociale – IPS CNPS), the mandatory scheme now provides the self‑employed and informal‑sector workers with a comprehensive benefit package of old age and survivor benefits, and temporary benefits for maternity, sickness, and work injuries. Participants are required to contribute 12 per cent of earnings ranging from 30,000 to 180,000 CFA francs (XFO), depending on their declared professional activity. In addition, individuals with earnings above XFO 180,000 are automatically enrolled in a complementary scheme and pay an additional contribution of 9 per cent of earnings above this threshold.

The RSTI offers a pension calculated based on a points system at age 60 (paid as a survivor’s pension, in the case of death), 14 weeks of maternity leave paid at 100 per cent of the insured’s earnings in the last year, and up to 300 days of leave paid at 50 per cent in case of a sickness or work injury. The amount of the old-age pension is doubled if the insured contributed to the complementary fund.

Egypt extends mandatory social insurance coverage to new categories of workers

In January 2020, in a move to sustainably improve social protection coverage, the government of Egypt implemented the Law No. 148 of 2019, bringing extensive changes to the country's social insurance system administered by the National Organization for Social Insurance (NOSI). The new legislation has extended mandatory coverage for the old-age, invalidity, and survivors’ programme to ten new categories of workers, including seasonal workers, irregular workers, domestic workers, and small employers.

The distinctiveness of the reform lies in its recognition that self-employed individuals form a heterogeneous group with varying levels of income and irregularity in their earnings. As such the law has established different payment categories for each group. While the contribution rate is set at 21 per cent for all self-employed, the insured can choose their insurable earnings bracket. With this extension, new categories of workers will now enjoy a defined-benefit old age pension of 2.22 per cent of average lifetime earnings for each year of coverage, once they have completed 120 months of contributions (increasing to 180 months in 2025). They can opt for early and deferred retirement, if they so desire.

These changes were part of a far-reaching reform of Egypt’s social protection system (for a concise summary of the reform, see SSA, 2020).

Morocco progressively introduces mandatory pension coverage for self-employed and non-salaried workers

In July 2021, Morocco adopted decree n°1.21.80 to implement the earlier Law No. 99-15 of 2017 extending old-age and survivors benefits to self-employed and non-salaried persons in liberal professions. The programme is being implemented in stages, based on the professional category of workers, with the aim of full coverage by 2025. During the transitional period, each category is slowly eased into mandatory coverage, while professions yet to be incorporated can opt in on a voluntary basis. In 2025, it will become mandatory for all low-income self-employed and non-salaried persons (namely, those with a monthly income of less than 1.5 times the minimum wage).

Managed by the National Social Security Fund (CNSS), the contribution rate is set at 10 per cent and is applied to income brackets indexed to the minimum wage by socio-professional category. Beneficiaries can opt to use a higher income bracket if they would like to receive a larger pension. For ease of payment, the scheme collects contributions through direct debit set up upon enrollment.

The pension provided depends on the points the individual has accumulated at time of retirement. While the legal retirement age is 65, the scheme allows for early retirement at age 60 or for deferred retirement up to age 75 (benefits adjusted). In addition, individuals can continue to work and contribute while receiving a pension to acquire additional benefits. If at the time of reaching retirement age, the calculated pension is below the minimum threshold, additional points can be purchased, or the duration of activity and contribution can be extended. In case of death, the surviving spouse receives 50 per cent of the pension the insured was entitled to receive, while the remaining 50 per cent is equally divided among the deceased’s dependent children.

Nigeria launches a voluntary Micro Pension Plan for the self-employed and workers in micro-enterprises

In March 2019, Nigeria implemented part of the 2014 Pension Reform Act No. 4, creating a voluntary Micro Pension Plan for self-employed persons and workers in micro-enterprises (with less than 3 employees). The programme is tailored to the unique needs of these workers, especially low-income earners, allowing for small but regular contributions, as low as 50 Nigerian Naira (NGN) (approximately 0.11 USD) a month, to licensed pension funds, under the supervision of the National Pension Commission (PenCom).

Upon establishment of a Retirement Saving Account, 60 per cent of the contributions go towards retirement benefits, accessible to the insured upon reaching the age of 50, or earlier if medically required. Upon retirement, the insured can choose between programmed withdrawals or an annuity. If opting for programmed withdrawals and fulfilling the minimum contribution period, beneficiaries may be entitled to a guaranteed minimum pension (the amount is still to be determined). The system also allows for continued contributions after retirement.

The remaining 40 per cent of contributions go to an easy-to access contingent account. After three months of affiliation, the insured can withdraw from the contingent account as often as once a week. At the end of any given year, the contingent account can be partially or totally transferred into the retirement account.

In terms of portability, workers can easily transfer their Retirement Saving Account into the country’s main programme, the Contributory Pension Scheme, if they begin to work in a firm with three or more employees.

The country is taking steps to incorporate technology, especially mobile phone applications, to promote and facilitate contribution payments, allowing these to be made on daily, monthly, or quarterly basis.

Zambia introduces a voluntary social insurance scheme for informal-sector workers

In 2019, the government of Zambia issued the Statutory Instrument No. 72 extending coverage to informal self-employed persons under a voluntary social insurance programme administered by the National Pension Scheme Authority (NAPSA). This builds on earlier reforms to expand coverage to the informal sector. Under the new system, for workers who choose to register, contributions can be made in a flexible way, either on a daily, weekly, monthly, or even yearly basis. They are set at 5.4 per cent of the insured’s annual average earnings, with a minimum monthly contribution of 50 Zambian Kwacha (ZMW) in 2022 (National Pension Scheme Authority, 2017a).

The benefit package was specifically designed for informal-sector workers. Based on the identified needs of five target groups – domestic workers, bus and taxi drivers, sawmill workers, small scale farmers, and marketeers and traders – the scheme provides benefits for old age, invalidity, survivors, and maternity, as well as protection in the case of bad weather and facilitated access to credit.

Under the programme, the old-age pension is available with 120 months of contributions (as compared to 180 months under the formal-sector scheme) and the insured is entitled to a minimum pension that is one-third of that used for the formal-sector scheme. There is also the option of a lump sum settlement if the insured fails to meet this qualifying period. While the legal retirement age is 60, the scheme allows for early retirement at age 55 or for deferred retirement until age 65 (benefits adjusted). Unlike the formal sector programme, the new scheme also offers maternity benefits paid at 50 per cent of previous earnings for three and a half months.

Those participating in the scheme can also benefit from facilitated access to credit and a Weather Index Insurance Benefit, which NAPSA will outsource to a financial institution and insurance company, respectively. Under the weather index insurance, farmers who make a yearly contribution of 50 ZMW are entitled to a pay-out if there is adverse weather (e.g. droughts, dry spells, or excessive rainfall). The payout is made automatically based on how weather compares to a pre-defined index. It does not relate to crop failure and farmers do not need to file a claim to receive benefits.

To facilitate take up of this scheme, NAPSA has eased contribution payment via a dedicated online platform (eNAPSA) and by permitting the use of mobile money payments. It has also partnered with workers’ and employers’ organizations in the target occupational groups and engaged in outreach activities, such as seminars and exhibitions designed to educate informal sector workers on their social security rights (National Pension Scheme Authority, 2017b).

Finally, the system is designed with portability in mind. The 2019 law allows workers to transfer their contributions from the informal to formal scheme if they wish (with a 2:1 conversion ratio). It also allows for concurrent membership in both the formal and informal scheme.


The reforms undertaken in the five countries vary widely but all form part of a larger trend aiming to include self-employed and informal-sector workers within legal frameworks.

In Côte d’Ivoire, Egypt, and Morocco, the self-employed are – or will soon be – mandatorily covered, whereas in Nigeria and Zambia their coverage is voluntary.

The contribution rates vary widely from as a low as 50 NGN in Nigeria, to 5.4 per cent of earnings in Zambia, 10 per cent in Morocco, 12 per cent Côte d’Ivoire, and finally to as high as 21 per cent of earnings in Egypt. In all countries, the determination of insurable earnings is simplified, either via earnings brackets fixed by socio-professional category, or via flexibility in the chosen contribution or declared earnings.

Benefits are calculated in different ways across the countries. While Egypt and Zambia offer a defined benefit scheme, Côte d’Ivoire and Morocco calculate benefits based on a points system, and Nigeria uses a defined contribution model. Many of the countries allow for early or deferred retirement and include provisions for invalidity if the insured becomes unable to work before reaching retirement age.

Most reforms take a holistic view, with consideration given to how the new scheme or target group fits within the larger system. For instance, portability has been considered in many countries, and benefit formulas have been designed in a way that does not undermine the existing formal sector schemes.

These five legal reforms are part of a larger trend of trying to include the self-employed within legal frameworks of contributory schemes. It goes without saying that such legal reforms do not necessarily result in high rates of effective coverage. For this reason, it is important to note that these legal reforms have been accompanied by other efforts to facilitate access, such as online platforms, mobile applications and mobile money payment options, community outreach, and partnerships with workers’ and employers’ associations.

The ISSA Guidelines on Administrative Solutions for Coverage Extension address these issues (ISSA, 2022). They aim to support institutions to strengthen their capacity to maintain and extend the social security coverage of difficult-to-reach groups.


ILO. 2021. World Social Protection Report 2020–22: Social protection at the crossroads ‒ in pursuit of a better future. Geneva, International Labour Office.

ISSA. 2022. ISSA Guidelines on administrative solutions for coverage extension. Geneva, International Social Security Association.

ISSA. Forthcoming. Social Security Programs Throughout the World: Africa, 2022. Geneva, International Social Security Association.

ISSA/SSA. 2019. Social Security Programs Throughout the World: Africa, 2019. Washington, DC, U.S. Social Security Administration.

National Pension Scheme Authority. 2017a. Extension of coverage to the informal sector (Good practices in social security). Geneva, International Social Security Association.

National Pension Scheme Authority. 2017b. The e-NAPSA: A case of the National Pension Scheme Authority (Good practices in social security). Geneva, International Social Security Association.

SSA. 2020. “Egypt implements extensive pension system changes” in International Update, February.