The number of 60 plus-year-old people in Africa is expected to increase between seven and eight times by 2050. According to Dr. Benoit Kasala’s study, a representative of the United Nations Population Fund (UNFPA), a drastic development in which the population of older than 60 years is expected to be around 20 per cent in 2050.
The big difference between the demographic developments occurring in both established and emerging economies is that these developments will proceed much more rapidly in emerging economies than they did in the Western economies. Although Africa will remain to be a relatively young continent, it reflects that while its growing dependency burden will reduce by 57 per cent, its old-age dependency burden will increase by 93 per cent between 1995 and 2050.
The following are some of the factors contributing to increasing cases of old-age poverty in Africa.
Lack of proper social security schemes
Social security systems refer to social insurance schemes that tend to be operated by governments which can either be operated on behalf of a population or on behalf of specific segments of the population. Employers may make social contributions to social security schemes, but the full responsibility for paying benefits lies with the general government.
Most people in Africa end up in old age poverty even after working for over 50 years due to lack of proper and well-established social security systems that could help them upon retirement. During their employment years, employers could have taken upon themselves to contribute for their employees but due to lack of well-laid structures from these government schemes, one may end up languishing in poverty upon retirement. Therefore, governments across Africa need to put proper systems in place like the National Social Security Fund in Kenya that calls for employers both from the private and public sector to help their employees contribute for retirement.
Lack of a reliable retirement savings plan
A good retirement saving plan is important for anyone who looks forward to having a comfortable and financially stable life after retirement. By the time one hits that retirement age, say 65 years in the case of Kenya, they should have saved enough to pull them through the years after they stop working. Unfortunately, not everyone does this and the result is poverty at old age.
The notion that one will start saving when they earn more is an attitude that we need to change. For instance, Octagon Africa launched a robust micro-pension product dubbed MOBIKEZA that is designed to help people in the informal sector to save for retirement easily and conveniently without breaking the bank. MOBIKEZA provides a simple, convenient and smart way of saving for retirement with flexible investment choices based on an individual’s risk profile. With such a pension product in place, old age poverty will be a thing of the past in the coming years.
Lack of government support towards the elderly
African governments can do better in caring for old people. Their attentions are diverted to other bother urgent and pressing demographic problems leaving the senior citizens at the mercies of family members.
However, these traditional safety nets have become far less reliable due to the process of urbanization, as young people migrate to cities separating themselves from their families, the impact of the terminal and chronic illness, and the aftermath of the global economic crisis brings increased insecurity.
As a way of supporting the elderly in our societies, governments should take it upon themselves to formulate policies that will see that the elderly are well taken care of. This can be achieved either through the allocation of monthly packages for them or even boosting pension and social protection schemes by easing the regulations around retirement bodies like the tax incentives. This will, in turn, encourage more people into saving for retirement.
The high rate of unemployment
The rate of unemployment in Africa is increasing with the gap between the rich and the poor widening. For one to comfortably save for retirement and lead a comfortable life upon retirement, they must have a reliable source of income, which to many is just but a dream.
Those who are employed might benefit from pension entitlements from their employers, which is deducted from their monthly salaries but this cannot be achieved if you are unemployed thus leading to old age poverty since the young are not able to support their parents financially.
It is therefore important that, as a continent, we should seek ways that will eradicate the growing rate of old-age poverty. The best way is through embracing all available resources that can help us secure our future, especially upon retirement.