Ageing and poverty in Africa and the role of social pensions

This study aims to analyse the poverty situation among the elderly (relative to other groups) in 15 low income countries Africa, and the role of social pensions. Analysis takes place within the context that in many low income African countries, three factors are placing an undue burden on the elderly:

• first, the burden on the elderly has enormously increased with the increase in mortality of prime age adults due to HIV AIDS pandemic and regional conflicts
• second, thetraditional safety net of the extended family has become ineffective and unreliable for the elderly
• third, in a few countries, the elderly are called upon to shoulder the responsibility of the family as they became the principal breadwinners and caregivers for young children

Findings show much heterogeneity across countries with respect to the proportion of the elderly population, the living arrangements and the composition of households, and household headship. The variations in household types and living arrangements reflect the variations in, and changing character of, the traditional family support system and household coping strategies in the wake of covariate shocks and the HIV-AIDS pandemic.

However, the proportion of the single elderly is still very small in most countries. A household type "elderly and children" or what is known as "skipped generation household" has emerged as an important structure in some countries. In addition, “households headed by the elderly” has also emerged as a significant household type in several countries.

The analysis shows that the poverty situation, and especially the poverty gap ratio, for the household types the elderly only, the elderly with children and the elderly-headed households is much higher than the average in several countries and the differences are statistically significant.

While the study finds the case for an universal social pension for all of the elderly to be weak, it does point to the need to consider a non-contributory social pension targeted to certain groups of the elderly.

The report finds that:

• when defined by household structure, the elderly only, elderly with children, and the elderly-headed households are poorer than others in eleven out of fifteen sample countries
• in four countries, groups other than the elderly seem to be at a higher risk of poverty, such aschildren and families with many children. Thus, while certain groups of the elderly undoubtedly face a greater risk of being poor, the elderly as a whole do not seem to be overrepresentedamong the poor
• the findings suggest that even in the eleven countries where certain categories of the elderly happen to be at a higher risk of poverty, the case for an universal social pension for all of the elderly is weak both on welfare grounds, and on considerations of fiscal affordability
• there is a case however for a non-contributory social pension aimed at some of the elderly in all countries. Further detailed analysis and simulations suggest that from the perspective of maximum impacts on reduction in poverty among the poor elderly, and for national poverty reduction, there appears to be a need for a non-contributory pension program restricting the eligibility to the poor among the elderly. Considerations ofaffordability and fiscal sustainability suggest that it is best to limit the benefit level to about one-third of the poverty threshold, eligibility age threshold to be 65+, and explorealternative non-income-based methods of targeting to restrict the pension only to the poor among the eligible elderly (i.e., 65+)

[adapted from author]