Salt, Soap and Shoes for Tanzania’s Elders – A Success Story

Old people in rural Tanzania face a difficult life. While health and strength deteriorate they can not hope to be supported by one of their many children, who are either unwilling or unable to help or have been consumed by AIDS.

In addition to being less and less able to provide an income they sometimes become primary caretakers of their orphaned grandchildren. The Global Age Watch Index 2014 released by HelpAge International confirms that Tanzania is amongst the worst places in the world to live for the elderly.

Tanzania’s government is thinking about giving away money for free to the elderly. No strings attached. What sounds revolutionary is actually more or less the same kind of pension old citizens get elsewhere in the world.

	where does money come from	when received	how long received
social pension (e.g. social security)	through tax returns from whole population	old age, poverty, no job	lifelong
contributory pension	through personal contributions in a paying job	old age	lifelong
insurance solution (e.g. unemployment benefits)	through contributions by the whole population	no job	finite period to lifelong, depending on scheme and country

Social pensions are regular cash transfers paid to certain citizens by government. Unlike contributory pensions, they do not require any previous contributions from the recipients. Instead, a social pension in Tanzania would acknowledge that all Tanzanians have paid some form of tax and make other contributions to national social and economic development.

Social pensions are proving extremely successful elsewhere in Africa with national schemes in a number of southern African countries and pilot schemes being implemented in Zambia, Kenya and Uganda. Evidence from these schemes has shown that social pensions not only reduce old age poverty but make wider contributions to achieving national social and economic development objectives.

Kwa Wazee is the organization which set up a successful pilot project in Northwestern Tanzania. Each older person receives a monthly pension of TZS12,000 (US$ 7.50) plus an additional supplement of TZS7,000 (US$4.40) for each child in their care. This small amount made a huge difference to their lives. 5 years later a study showed that they had become able to buy “Salt, Soap and Shoes”, each signifying a bigger picture.

Salt was the metaphor, not only for more food security, but also for tastier food and for being part of a reciprocity process where salt is commonly shared among neighbors.

Soap was not only associated with better hygiene and cleaner appearance, but also with a greater self-confidence and with stronger social inclusion.

Shoes stand for school and the future of the children in their care. Now longer were children sent home from school if they did not appear with shoes, school uniform and school materials.

Five years later the strong needs of older people and the strong impact of pensions were still obvious. At the same time it appeared as if for many older people it had become part of normality to collect their pension. They walked in small groups from their villages, they had chats with others at the pay points and – after receiving their pensions – they assembled in bigger groups under a tree to make

their contributions into group saving schemes. On the way home they stopped at the market or little village shops: Socializing, Shopping and Saving.

I wonder if microfinance organizations are already aware of this growing market segment, especially if the Tanzanian government ever decides to roll out a pension scheme across the country. As microfinance organizations are experienced in the difficult “last mile” topic and in keeping track of small amounts efficiently I can see a potential for synergy.

Thanks to Ricus for this input!

(photo by Dongyi Liu on flickr)