The Problem

Social security is a fundamental human right as well as a social and economic necessity as established in Article 25 of the United Nations Universal Declaration of Human Rights 1948. Governments increasingly recognize the economic stabilization social security provides, particularly in times of crisis. Because social security alleviates poverty and reduces inequality through income transfers, promotion of social justice, and economic growth, it is one of the conditions for sustainable economic and social development.

Old-age pension is one of the types of social security benefits. Although there has been much improvement in nations providing social security to the elderly, only 67.8% of the world population elderly receive formal social security benefits. Developing countries in particular have the challenging task of extending coverage to the poor and those working in the informal economy. In Africa, where only 29.6% of older persons have access to social security, this presents one of the biggest barriers that must be addressed to achieve significant poverty alleviation (International Labor Organization, 2017).

The United Nations has recognized the significant increase in the aging population worldwide. In sub-Saharan Africa, not only is there an increase in elderly persons, but also poverty among them is more pronounced, because formal social protection plans fail to reach large segments of the population, who work in the informal economy, while existing informal support systems are being undermined by rapid economic social and demographic changes. . The informal economy is comprised of very small, unregistered companies, household-based production, or agricultural production. Workers in the informal economy are often low-paid, or self-employed, or migrant. (Ginneken, 2003) Between 80 and 90% of the elderly have worked exclusively in the informal economy and are no longer able to engage in full-time work

Sustainable and inclusive growth, poverty alleviation, and inequality reduction require nations to provide a social safety net for their citizens. Such safety nets prevent poverty recidivism due to income reductions from social risks, such as sickness, employment injury, and old age. Naturally, this safety net would include social security solutions for workers in the informal economy. Nations have begun to recognize the social justice importance of providing social protection to informal workers.