Tanzania’s Vice President, Dr Philip Mpango, has called on African nations to exercise greater caution in deploying social security funds for infrastructure projects, warning that safeguarding the core mandate of protecting contributors must remain paramount.
Speaking at the opening of the 14th International Policy Makers Conference on Social Security in Africa, held at the Arusha International Conference Centre (AICC), Dr Mpango said that while infrastructure investment is necessary to unlock the continent’s economic potential, it must not come at the expense of the financial security of millions of contributors.
“Social security funds were established to provide a buffer against economic and social vulnerabilities, as well as to reduce poverty,” he said.
“Investments must therefore not erode members’ savings or compromise their right to timely benefits.”he added
Dr Mpango cautioned against politically motivated or poorly conceived projects that could threaten the sustainability of the funds.
“Infrastructural investments that are poorly designed, excessively costly, or technically unmanageable risk weakening the ability of social security funds to meet their obligations,” he warned.
He called for rigorous feasibility assessments before committing resources, noting that ill-prepared investments could result in delayed benefit payments or in worst-case scenarios, total losses that affect millions of livelihoods.
The Vice President also urged African social protection experts to craft strategies that would allow well-governed social security funds to support rural infrastructure development which, he said, is key to improving livelihoods, creating jobs, and stemming rural-to-urban migration.
“Investing in rural and peri-urban infrastructure will not only enhance productivity and living standards but also contribute to inclusive and sustainable development,” Dr Mpango told delegates.
Africa’s infrastructure financing gap is currently estimated at between $68 billion and $108 billion annually.
Dr Mpango said social security institutions many of which manage substantial long-term capital are well-positioned to help bridge this gap, provided they adhere to principles of transparency, sustainability, and fiduciary prudence.
He called on policymakers attending the conference to put forward actionable and sustainable solutions on how social security funds can play a catalytic role in infrastructure development, without undermining the trust of their contributors.
The high-level gathering has drawn ministers, senior government officials, and social security experts from across the continent.
Themed “Social Security Funds: Catalysts for Infrastructure Development and Socio-Economic Growth in Africa,” the meeting comes at a time when governments are seeking innovative financing models to close infrastructure gaps and spur post-pandemic recovery.