TANZANIA INSTITUTE OF ACCOUNTANCY (TIA)

RESEARCH REPORT ON THE BENEFITS OF SOCIAL SECURITY SCHEMES

IN ECONOMIC AND SOCIAL DEVELOPMENT OF TANZANIANS

CASE STUDY: NSSF DAR ES SALAAM

NAME OF STUDENT: HAPPINESS JOSEPH MASIAGA

REGISTRATION NUMBER: DSM/BAC/19/66745

ACADEMIC YEAR:2021/2022

A RESEARCH REPORT HAS BEEN SUBMITTED TO TANZANIA ISNTITUTE OF

ACCOUNTANCY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF A BACHELLOR DEGREE IN ACCOUNTANCY (BAC)

JUNE 2022

CERTIFICATION
The undersigned certify that he has read and hereby recommends for acceptance by
Tanzania Institute of Accountancy, a dissertation entitled the impact of social

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security schemes in economic development of Tanzanians; case study care
sanitation and suppliers limited in partial fulfillment of the Requirements for the
degree of the Tanzania Institute of Accountancy.

…………………..

(Signature)

……………………….

Date

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 COPYRIGHT

This project paper is a copyright material protected under WIPO convention, Berne
Convention, Universal Copyright Convectional under UNESCO, The Tanzanian
copyright Act of 1999 and other International enactments, in behalf, on intellectual
property. It may not be reproduced by any means, in full or in part, except for short
extracts in fair dealing for research or private study, critical scholarly review or
discourses with an acknowledgement, without permission of TIA, on behalf of the
Author.

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 DECLARATION

I, Happiness Masiaga, hereby declare that this project paper report is my own original
work and that it has not been presented and will not be presented to any other higher
learning institution for a similar or any other degree award.

…………………………
Signature

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 ACKNOWLEDGEMENT
My great appreciation and thanks goes to the Almighty God for His grace,guidance and
good health.Secondly to my supervisor Mr. Jumanne Magayane who kindly encouraged
and guided me.I am also indebted to my family and friends who encouraged and stood
with me on many occasions during the research.

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ABSTRACT
Social security schemes in Tanzania bring about economic and social development to
employees while carrying out their activities. As we all know that every organization or
company is aimed at making profit, but when making these profits as far as social
security schemes are concerned these profits should not be high such that individual
citizens suffer the consequences, therefore there must be optimization whereby the social
security organizations benefit while making individual citizens satisfied. Therefore, this
research will be aimed at finding out whether these social security schemes bring about
economic and social development to their members. The study will be conducted in Dar
es salaam and will use both quantitative and qualitative research approach. This study
will use observation, interviews as data collection methods.

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 ACRONYMS
NSSF_ National Social Security Funds

TIA_ Tanzania Institute of Accountancy

ILO_ International Labor Organization

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 Table of Contents
CERTIFICATION.............................................................................................................2
COPYRIGHT.....................................................................................................................3
DECLARATION...............................................................................................................4
ACKNOWLEDGEMENT................................................................................................5
ABSTRACT........................................................................................................................6
ACRONYMS......................................................................................................................7
CHAPTER ONE..............................................................................................................10
PROBLEM SETTING....................................................................................................10
1.0 INTRODUCTION.....................................................................................................10
1.2 BACKGROUND OF THE STUDY.........................................................................10
1.3 STATEMENT OF THE PROBLEM.......................................................................11
CHAPTER TWO.............................................................................................................14
LITERATURE REVIEW...............................................................................................14
2.1 DEFINITION OF KEY CONCEPTS......................................................................14
2.2 SOCIAL SECURITY................................................................................................14
2.3 THEORIES RELATING TO THE STUDY...........................................................15
2.3.1 THE LIFE CYCLE MODEL BY CREMER (2009)....................................................................................15
2.3.2 DAYKIN THEORY 2009......................................................................................................................16
2.4 EMPIRICAL REVIEW............................................................................................17
2.5 RESEARCH GAP......................................................................................................20
CHAPTER THREE.........................................................................................................21
RESEARCH METHODOLOGY...................................................................................21
3.1 RESEARCH PARADIGM........................................................................................21
3.2 RESEARCH DESIGN...............................................................................................21
3.2.1 AREA OF THE STUDY.........................................................................................................................21
3.2.2 POPULATION OF THE STUDY..............................................................................................................21
3.3 DATA COLLECTION..............................................................................................21
3.3.1 TYPE OF DATA..................................................................................................................................22
3.3.2 THE PRIMARY DATA COLLECTION METHODS.....................................................................................22
3.3.3 SECONDARY DATA COLLECTION.......................................................................................................22
3.4 DATA ANALYSIS.....................................................................................................22
3.5 ETHICAL ISSUES....................................................................................................22
CHAPTER FOUR...........................................................................................................23

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FINDINGS AND DATA ANALYSIS.............................................................................23
4.1 INTRODUCTION.....................................................................................................23
4.2 DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS................23
4.2.1 RESPONDENTS GENDER DISTRIBUTION..............................................................................................23
4.2.3 RESPONDENTS’ AGE IN YEARS..........................................................................................................24
4.2.4 RESPONDENTS’ EDUCATION LEVELS.................................................................................................24
4.2.5 RESPONDENTS YEARS OF EXPERIENCE..............................................................................................25
CHAPTER FIVE.............................................................................................................26
CONCLUSION, SUMMARY AND RECOMENDATIONS.......................................26
5.1 INTRODUCTION.....................................................................................................26
5.2 SUMMARY OF THE FINDINGS...........................................................................26
5.2.1 IMPLICATION OF THE FINDINGS.........................................................................................................26
5.2.1.1 Limited number of NSSF workers in relation to number of customers.....................................26
5.2.1.2 Network problems.....................................................................................................................26
5.2.1.3 Low contribution capability......................................................................................................27
5.2.1.4 Irrelevance of the retirement age..............................................................................................27
5.2.1.5 Permanency and consistency....................................................................................................27
5.2.1.5 Delay and complicated procedures in providing benefits........................................................27
5.3 CONCLUSION..........................................................................................................27
5.4 SPECIFIC RECOMMENDATIONS.......................................................................28
5.4.1 EMPLOYMENT OF MORE SOCIAL SECURITY WORKERS......................................................................28
5.4.2 SYSTEM RESTRUCTURING.................................................................................................................28
REFERENCES................................................................................................................29
APPENDIX I: QUESTIONNAIRES..............................................................................30

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 CHAPTER ONE
PROBLEM SETTING
1.0 Introduction
Tanzania as one of the members of the International Labor Organization (ILO) follows
the standards and guidelines posed by the ILO in its labor related affairs. Therefore, this
makes Tanzania to have various social security schemes such as the National Social
Security FUNDS (NSSF) and Public Service Social Security Fund (PSSSF). Specifically,
the study will be based on NSSF in the Dar es salaam branch.
The need or the main objective of this study is to find out whether social security
schemes (case study NSSF) satisfy members needs economically. This will be enhanced
by taking a look through various benefits that members get after they have joined NSSF
also some members will be questioned on their opinion on how NSSF is serving them.
The study will have much significance to the community as members will be aware of
their rights and how to get them, also on various challenges concerning NSSF various
ways to improve social security schemes will be elaborated therefore to some extent
economic development of NSSF members and the all community will improve.

1.2 BACKGROUND OF THE STUDY

The concept of social security refers to a term used for the old age, survivors, and
disability insurance. It is federal insurance scheme providing benefits for pensioners and
those who are unemployed or disabled. (Julia Kagan 2020). It is a protection that
provides to individuals and households to ensure access to health care and to guarantee
income security, particularly in cases of old age, unemployment, sickness, invalidity,
work injury, maternity or loss of a breadwinner (ILO 1952). Social security system is
there so as to provide social protection to members of a certain society by the means of
providing benefits which are the result of contributions made by the individuals requires
the protection. In Tanzania, the social security system provides for compulsory
contribution and non-compulsory contribution. According to the Social Security
Regulator Authority (2011), among the benefits normally paid through the social security
schemes include retirement income, disability income, Medicare and medic aid, and
death and survivorship benefits.
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Tanzania’s social security schemes have a wide range of benefits that are offered to
members through established organizations. These organizations offer a range several
benefits which are offered in a way that the employee is satisfied. However as to whether
these social security schemes benefit employees is still a mystery and it what we are
about to find out in the research that is about to be conducted.

1.3 STATEMENT OF THE PROBLEM

Social security schemes are defined as schemes in which social contributions are paid by
employees or other individuals, or by employers on behalf of their employees, in order to secure
entitlement to social insurance benefits for the employers or other contributors, their dependents
or survivors (john Pitzer 2003). Social security schemes are important tools to reduce poverty
and inequality, they do not only help to prevent individuals and their families from falling or
remaining in poverty, they also contribute to economic growth by raising labor productivity and
enhancing social stability (social protection.org).
However, some of the problems facing social security schemes are risk for beneficiaries,
inflexibility of income, lack of investment control where the money you contribute toward your
pension while your working is invested in pension fund and you do not have control over how
that money is invested, inflation risk as most of the public pensions include annual cost of living
increases the benefit amount for private pensions stays flat over time. (Professional financial
solutions 2021)
Social security schemes can be improved raising the payroll tax rate, raise the ceiling on which
social security taxes must be paid, change the way annual cost of living adjustments are
calculated, some people are suggesting to raise the full retirement age, invest social security trust
funds in the stock market (Investopedia 2021). It is the intention of this study to investigate
whether social security schemes in Tanzania benefit employees.

1.4General objective
the general objective of this study is to find out if social security schemes benefit
employees economically and socially.

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 1.5Specific objectives
In order to reach the above general objective, this research will focus on the following
specific objectives;
1. To determine different kinds of investments that NSSF conducts.
2. To determine what amount of interest is added when giving old age pension
3. To investigate on how social security schemes bring about economic growth.

1.6Research questions
This research study will be guided by the following research questions:
1. What are some investment projects that NSSF conducts?
2. What amount of interest is given when providing old age pension?
3. How do social security schemes bring about economic growth in Tanzania?

1.7Significance of the study

This study has several significances in both to the government and to individuals. These
significances are as follows: -
This research study is important to the Social Security Schemes department as it will
enable them to know different weakness of their schemes and how to improve on
providing services to members.
The study will enable individuals to understand their rights concerning benefits to be
provided by the Social Security Schemes, the study will clearly elaborate all benefits that
are supposed to be paid to individuals eligible for the said benefits.
Apart from that, also the study will act as a mirror to social security schemes in Tanzania
in making sure that they operate in accordance with the requirements needed so as the
aim of reducing poverty in Tanzania is attained.
Furthermore, the study will stand as a literature review to other researchers who wish to
research on the same topic.

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1.8Limitations of the study
This research study will be faced by a number of limiting factors that may lead to delay;
the following are some of the limitations which will face this study.
Limited number of resources
Cost to be incurred in the process of collecting data for example transport fee, typing fee
and others
Limited time of conducting the research study

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 CHAPTER TWO
LITERATURE REVIEW
2.1 Definition of key concepts
2.2 Social Security
This is a federal insurance scheme providing benefits for pensioners and those who are
unemployed or disabled. In this system people can register voluntary or involuntary.
Monthly contributions are made which is 20%, 10% being contribution directly from
employee and the remaining 10% being from the employer.
International Social Security Association (ISSA, 2012) has defined Social security as
means any system of social protection established by legislation that provides individuals
with an assistance of income security when faced with the contingencies of old age,
survivorship, incapacity, disability, unemployment or rearing children.
According to Julian Kagan (2020) Social security benefits are payments made to
qualified retirees and disabled people, and to their spouses, children, and survivors.
Social security officially the old age, survivors, and disability insurance is a
comprehensive federal benefit program designed to provide partial replacement income
for older workers and their spouses, those whose spouse or qualifying ex-spouse have
died, and the disabled. Under specified conditions it also supports children of
beneficiaries
Maghimbi et al, (2002) has defined social security to mean the protection provided by
society to its members through public measures against the economic and social distress
which otherwise would be caused by the stoppage or reduction of earnings arising from
contingencies. Social security is a form of protection from the government to the
individuals upon contributions made by the individual. Social security came into
existence so as to reduce poverty to individuals who retire as a result of old age.
2.2.1BENEFITS
Benefits are all those payments that are entitled to a person just because he/she is a
member of social security scheme. Benefits are a result of the contributions made by an
individual. In NSSF benefits are of long term and short-term benefits.
2.2.2Types of Benefits

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In the social security system, there are two types of benefits which are long term benefit
and short-term benefit. Long term benefits are those which an individual receives upon
retirement or death. It’s a type of benefit which takes long time to receive it, for example
pension benefit; pension benefit is received after somebody retires or on old age
(Mboghoina and Osberg, 2010). On the other hand, short term benefits are those benefits
which does not depend retirement or death. They are benefits which an individual can
receive when he or she needs them.

2.3 Theories relating to the study

2.3.1 The life cycle model by Cremer (2009)
The life cycle model stipulates that all persons live under the two phase’s model of
utilization while the first phase is the saving phase and the second phase being the
utilization phase. Under this theory, people need to save in the first phase and utilize out
of the savings in the second phase. The model goes on by stipulating that, in the first
phase, people are young and do work hard so as to maximize their saving for the future
which is the second phase of living. Under the first phase, people are being paid wages in
return of their labor supply. Whether the wage is high or low will determine the amount
of savings in the second phase. In phase two, all the individuals are retired and utilizing
the savings made under the first phase (Modigliani, 2005).
However, the life cycle model as per Cremer (2009) has its own limitations such as, the
problem of uncertainty between the current situation and lower benefits. These conditions
may affect the amount of savings to be utilized. The situations in any country do change
in terms of tax systems and other monetary situations. Any changes on the tax system
will eventually affect the utilizations of the savings by an individual. Another limitation
is that, the model works on the assumption that all people have a specific awareness of
their economic future lifetime earnings. Other people are different.

2.3.2 Daykin theory 2009

Another theoretical argument under the study of social security schemes is whether the
schemes should be funded or not. Majority of people argues that funding pension

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liabilities may increase the amount of savings in the economy of the country. The
increase in economy will later bring good outcome to people who have lost their working
ability whether by being old or because of anybody incapability.
The funded pension schemes may motivate investments which may later increase the
growth of the national economy. So, it much worth if the pension schemes would be
funded whether by the government or the world bank so that the social protection could
be manifested. Daykin (2009) in his paper argues that funded complementary pension
arrangements will be better able to cope with the pressures caused by an ageing
population. He is also of the view that, the returns from investment done by the funded
pension schemes will later reduce the costs of running a particular pension scheme.
The theory of funded or not have its strength and weaknesses. Starting with the strength,
the theory concentrates on the welfare of the individuals that upon funding a particular
pension scheme, the savings will increase something which leads to the real social
protection. Also, strength is that, the action of funding pension schemes makes the
government to have a real participation on providing social protection to its individual
because it prays a party rather than when the pension schemes were to fund itself and the
individual’s contribution only.
Also, it is advantageous that when the government will decide to fund the pension
schemes, the individuals will have trust to their government that it is taking part in
making sure that the welfare of individuals is well maintained. It is also advantageous
that the act of funding the pension schemes leads to the increase in economic growth and
investments in the nation.
However, as per Daykin (2009) the theory has its own weaknesses which include the
following; the theory will only be applicable to developed countries because developing
country will fail to fund each and every pension scheme due to their financial situations
being not stable. So, the theory has not focused on the developing countries. Also,
another weakness is that, the theory has not mentioned the source of the income to be
given to the pension schemes. It is not clear if it is the government or the World Bank.
Furthermore, the theory concentrates more on funding the pension schemes so as to
increase economic growth rather than concentrating on funding the pension schemes for
the purpose of upraising the life of people who have stopped working. The primary

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objective of the pension schemes is making sure that people continue enjoying better life
even if they have stopped working. Increasing the economic growth is a secondary
objective so the theory should concentrate on its primary objective rather that secondary
objective.

2.4 Empirical Review

Olivier, et al (2012) in Informality, Employment and Social Protection: Some Critical
Perspectives For/From Developing Countries provide for a short guideline on social
security on the informal sector especially on definition, extent and the nature or character
of social security in developing countries. In this paper the authors also venture on the
challenges of making an extension of social security coverage to workers of the informal
sector focusing on some conceptual limitations and constraints of the same.
Apart from the standards of social security, Olivier, et al (2012) adduces some causes for
limited coverage of social security in developing countries. In particular the authors
challenge the insufficiency found in the traditional concept of social security systems in
developing countries. They argue for example that; Social security coverage is extremely
insufficient particularly in the developing countries. It is recorded that whereas, in the
industrialized nations more than 90 per cent of the population is covered by various forms
of state or market-organized social security systems, in sub- Saharan Africa and South
Asia only 5 to 10 per cent of the active population are covered by social security
schemes. Olivier, et al (2012)
Olivier, et al (2012) on the other hand, challenges the ILO (1952) minimum standards on
the fact that the convention contains some conditions which on the other hand cannot be
implemented by developing nations because of the claw back clauses in it giving room
for developing countries to adopt lower standards and even apply the standards to certain
categories of people only, leaving majority uncovered.

Another author, Frye (2005) unveils the concept of universal provision of social security
by the state. She is of the view that thinking of universal social security access; “The first
question that needs to be addressed is whether there is consensus that the optimal system
of social security provisioning should be that the state should be the provider of free
universal access to social security benefits, funded from state revenue.”
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She then draws attention to Article 71(1) of Social Security (Minimum Standards)
Convention (ILO 1952, No.102) which states that; The cost of the benefits provided in
compliance with this Convention and the cost of the administration of such benefits shall
be borne collectively by way of insurance contributions or taxation or both in a manner
which avoids hardship to persons of small means and takes into account the economic
situation of the Member and of the classes of persons protected.
Finally, Frye (2005) poses a question as to whether it should be necessary for developing
countries to include a total commitment towards ultimate assurance of the minimum
standards for universal social security ensuring every person benefit from social security.

Bandawe (2008), Deputy Director General, National Social Security Fund Tanzania on
her presentation on the adequacy of the current social security benefits, she is of the view
that, benefits are the contract between the insured who is an ordinary individual and the
Social Security Institution (SSI). In her presentation, Bandawe (2008) has listed the
benefits offered by the social security institutions both short term and long-term benefits.
According to the presentation, the benefits offered by the schemes are not adequate due
to the reason that the coverage is only on formal sectors while the informal sector is left
uncovered. Bandawe (2008) also argues that, the benefits are not adequate due the fact
that the immediate needs such as shelter, clothing and schooling are left uncovered while
the schemes in Tanzania have put emphasize on most non immediate needs.
Bandawe (2008) then goes further by giving the challenges causing the benefits offered
by the social security schemes be inadequate. The challenges given by the author are;
Benefits offered are not relevant to Africa. Covariance risks like HIV/AIDS, famine,
Civil wars are not covered, immediate needs not given the requisite priority, Benefits are
too small to meet the basic needs, Short-term benefits cease after retirement, and
maintaining the value of benefits against inflation.

Another author Baruti (2008) provides an overview of the Tanzanian social security
system and examines the benefit offered by the current social security Institutions and the
challenges facing the institutions in providing the required services. The author does not
end there, he goes on giving the different strategies which can be used by the social

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security institutions in facing the challenges as well as fighting poverty issue in Tanzania
as poverty being the central issue in Social security system in Africa. Apart from that, the
author also gives a focus to the benefit packages that are most preferred by members
before and after retirement.

Mattoo (2000) is another Author who has wrote about social security, this Author apart
from defining the term social security, the Author is also of the view that the concept of
social security has developed from man kind’s mission for security or protection from
different risks of nature which may disturb the whole life style. Also, the need for
protection arose from the fact that one may not work for his or her life time, it will come
a time when this man will not be able to work again but still need to have the entire
necessary requirement for life so social security came in place to resolve the mystery.
Mattoo (2000) also discusses the concept of social security under different perspectives
such as the South Asian perspective and the Indian perspective. Under the above two
perspectives, the Author is of the view that, social security in the developing countries in
South Asia faces a lot of challenges which makes it difficult to persist. In South Asia, the
availability of primary education and health care is poor and there are very low levels of
social development which make social security schemes remain dormant and not helpful
to the citizens. Social security is the key to social development of any nation. So, if there
is poor social security then social development will remain a mystery.
It is important that social security schemes be given first priority in any nation so as to
foster the development of such nation. Mattoo (2000) argues that social security is one of
the important dimensions of the development process. It assumes a place of special
significance in the developing countries, where poverty, destitution and income
inequalities abound in large measure.
Finally, Mattoo (2000) gives the different strategies on how to foster the development of
the social security in any developing country. She is of the opinion that, there should be a
stronger teamwork among the different departments and ministries. Also, savings should
not be performed by banks only. Social security schemes should do such task too.

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Isaka (2011) in her paper which was presented during Regional social security forum for
Africa in Arusha was of the view that, in order to have an adequate social security
system, universality is needed. Isaka (2011) is of the view that, formal sectors and
informal sectors should be provided with an equal opportunity to participate in social
security. This means that, the coverage of social security should be extended to people
working on informal sectors as well. The extension to informal sectors results to a fair
and equal social security system in the Country.
Isaka (2011) went on saying that, benefits being provided by the social security schemes
in Tanzania will be considered adequate if they pray a role in achieving the social
security policy outcomes which are to provide basic needs to people in demand of the
protection. Therefore, the social security schemes should always strive to make sure that
they provide adequate benefits to individuals as the social security policy requires.

2.5 Research Gap

This study will examine the social security benefits offered by Tanzanian social security
organizations and find whether they bring about economic development to Tanzanians.
Many Authors have investigated and written about the social security schemes and the
benefits they give but they have not written on whether these benefits have satisfied
Tanzanians and have an impact in economic development of the insured people
Many of these studies have analyzed the benefits, how the schemes operate, the extent to
which those schemes cover in terms of sectors whether Government or not. Other
Authors have written on the disparities of benefits given other being short term and other
being long term. The focus of the past studies has been on the developed world, very few
studies have focused on Africa. It is now the time to study the social security schemes of
Tanzania and see whether they bring about economic development of Tanzanians.

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 CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research paradigm
This study will be a qualitative research because it will investigate more on quality rather
than quantity. As the Research title speaks, this study will be aimed at investigating the
impact of social security schemes in economic and social development. So, the study will
be concentrated on investigating on how far are the social security schemes in Tanzania
providing quality services to individuals.

3.2 Research design

This research will involve the interview of different people involved with social security
schemes including both NSSF members and some employees and employers of different
companies. The study will only describe the current state of variables so there are no
presumed causes or effect.

3.2.1 Area of the study

The study will be conducted in Dar Es salaam. This is because, the research is a
qualitative one and being so, it involves interviewing different professionals from the
area of the research whereas the data will be collected from National Social Security
Funds (NSSF).

3.2.2 Population of the study

The population of the study includes the Social Security Schemes operating in Tanzanian
that is National Social Security Fund (NSSF).

3.3 Data collection

This is the process of gathering information that will be used to analyze the phenomena
under the study (Kothari 2010). In this study, data will be collected from National Social
Security Fund where various methods and tools will be used such as interviews, focus
groups, observation and questionnaires.

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3.3.1 Type of Data
Being a qualitative piece of work, this research will employ mainly secondary data.
However, some primary data will also be collected so as to comprehend the qualitative
aspect of the work. As such both; primary and secondary data collection methods were
employed in this research.

3.3.2 The primary data collection methods

For primary data, this study will use basically interview and field observation.

3.3.3 Secondary data collection

Secondary data will be obtained from review of books, reports, web-sites, journals and
from official documents where relevant information is found. Secondary data is very
important for the study because of the fact that they complimented the primary data
collected through interview, as explained above.

3.4 Data analysis

Data collected from the primary and secondary sources will be sorted, arranged and
aligned to assure that correlating data are sorted together for easy interpreting. Once all
the interviews and documentation completed, the data obtained will be analyzed in
relation to the research questions and objectives of the study.

3.5 Ethical issues

When conducting the research paper, there are some ethical issues which will be
considered. The ethical issues which need consideration in the due course of conducting
research are being provided under the Research Ethics Framework. The ethical
considerations are as follows;
The research will be one of high quality that it should bring positive impacts to the
society.
Clear information will be given to research staff and subjects.
The research will bring not harm to the people involved in any way.

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 CHAPTER FOUR
FINDINGS AND DATA ANALYSIS
4.1 Introduction
This chapter involves the presentation and interpretation of data gathered. The data was collected
from National Social Security Funds (NSSF) in Tanzania in their Dar es salaam Offices and also
through review of various documents containing relevant data.

4.2 Demographic Characteristics of the respondents

4.2.1 Respondents gender distribution
This study involved 40 respondents who were NSSF customers based in Dar es salaam. This
section will explain various characteristics so as we can get the general picture of the
respondents.

Figure 2 below, show the respondents’ gender distribution

Figure 2. Respondents gender distribution

Males 75%
Females 25%

It was realized from the field that majority of customers of Dar es salaam who make follow ups in
their contribution are males. Because of that it was necessary to have a 75/15 ratio so as each
group is equally represented according to their total number.

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4.2.3 Respondents’ age in years
Age was an important factor in this research as the researcher wanted to know the relationship
between the customers’ age and their knowledge in social security funds. Figure 3 below shows
the respondents’ age distribution. The pie chart below shows that majority of customers are
between the ages of 30 and 50. If we consider the age factor alone, we can conclude by saying
that majority of them are old enough to give collect information.

Figuere 3; Respondents age in years

16
14
12
number of 10
respondents 8
6
4
2
0
18-29 29-35 36-50
Age in years

4.2.4 Respondents’ education levels

The researcher had to consider the level of education by assuming that educated people
know more about social security schemes therefore they give more accurate and collect
results compared to the less educated or uneducated people. The findings in this study
showed that 45% of respondents were degree holders they are followed by 40% diploma
holders and the others had least education level as shown in figure 4 below

24
 Figure 3 Respondents by educational level

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No of respondents

15

10

0
1 2 3 4
education status

4.2.5 Respondents years of experience

In this study it was necessary to find the respondents’ years of experience this was necessary in
order to know how NSSF conducted its activities since way back until to this date. Experienced
people have more details since they have more years with NSSF. Figure 4 below shows the
respondents’ years of experience where the majority of them have worked between 10 and 15
years in the working. Those who have worked for less than 10 years was about 20% and the
group which had worked between 10 ,15 and 15+ years constitute 30%,25%,25% respectively.

Figure 4 Respondents year of experience

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number of respondents

12
10
8
6
4
2
0
less than 5 10 15 15+
years of experience

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 CHAPTER FIVE
CONCLUSION, SUMMARY AND RECOMENDATIONS
5.1 Introduction
This chapter summarizes the findings of the study, it gives the implication of the findings the
chapter gives the conclusion and also gives the recommendation for further study as well as for
improvement of the condition of the social security schemes performance.

5.2 Summary of the findings

As we have seen above NSSF offers a variety of benefits which include old age pension,
survivorship, invalidity benefit, maternity benefit, funeral grant, health care benefit and
employment injury benefit therefore it complies with standards set by ILO.

5.2.1 Implication of the findings

The implication of the findings is that, according to the respondents and the information obtained
through secondary and primary data, findings indicate that approximately 60% of the insured
members are not satisfied with social security schemes. Although much effort has been put so as
to provide quality services a large portion of people is not happy. Below are some of the
problems faced by members of security funds in getting social security services.

5.2.1.1 Limited number of NSSF workers in relation to number of customers.

Through field observation in this study, the researcher observed that there was a high population
of customers who wait for a long time to be served by a low number of NSSF workers. This
problem has made customers to be dissatisfied as it causes delay for them to attend their work
places or in sometimes due small serving rate in NSSF offices they live their work places
unattended meaning that they fail to work therefore leading to economic problems.

5.2.1.2 Network problems.

Also, customers face the problem with the network sometimes when they attend to social security
offices. Network problems have large negative impact in economic development as they lead to
delay of people to go to their work places as they tend to wait for network so as they can be
attended, this also leads to increase in length of the queue that becomes a burden to NSSF
workers. This also has led customers to be dissatisfied by social security schemes.

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5.2.1.3 Low contribution capability.
Levels of income for most of the informal sector and even the large part of the formal sector
employees are quite low. Their income is just enough to provide for subsistence, making it
difficult to meet the immediate needs as well as paying contributions to social insurance schemes
for their future protection, this discourages the customers as they see social security funds as a
burden.

5.2.1.4 Irrelevance of the retirement age.

Workers in the informal sector do not have a specific age for retirement, they tend to work
continuously as long as they are healthy and their activities are profitable. They may retire at an
early or late age depending on their health and business environment, and not on the pensionable
age as defined by the law, this factor discourages some old people who wish to continue working.

5.2.1.5 Permanency and consistency

Some informal workers have no permanent place for business or their business are seasonal based
for example Agricultural business therefore charging such kinds of people with monthly
contributions may be overwhelming as they may be forced to pay contributions in the period
where they are not even producing, in case they delay submission still they pay penalties
therefore it discourages people.

5.2.1.5 Delay and complicated procedures in providing benefits

Also, social security members face a huge problem in the time of getting these benefits as they
have to pass several procedures to prove that they are qualified to earn these benefits. These kinds
of procedures discourage people from funding in these schemes.

5.3 Conclusion.
Findings from this study indicate that, the existing social security schemes in Tanzania have done
their best to provide quality services. However, they are not satisfactory in bringing economic
development of customers as they are faced by several challenges as it has been portrayed above,
the major ones being low-income ability.

These challenges are common in developing countries where most of the employees have low
salary therefore contributions become a burden, this is because of high dependency ratio as
people tend to give birth to children in an extent that they cannot take care of.

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5.4 Specific Recommendations.
Various procedures have to be taken so as to improve this sector; the reforms are necessary in the
social security in Tanzania. These reforms have to be done in such a way that they encourage
customers to see the worth of these funds. The following are some of the recommendations to
improve social security funds.

5.4.1 Employment of more social security workers

The responsible authorities have to improve this sector by employing more workers to enable fast
provision of services. This will solve the problem of delay of services as people will be served in
time and will get time to go and conduct their economic activities.

5.4.2 System Restructuring

The new system regulator should be established for the entire social protections sector where by
pension calculation have to be improved so as to enable a retired person get enough funds to
sustain him or herself after retirement age also. Other problems such as informal employer failing
to submit contributions of his or her employees the social security organization has to give
maximum cooperation by providing them with knowledge on how to claim their benefits.

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 REFERENCES
Daykin, C. (2009) privately managed old-age pension schemes, theory and reality, United
Kingdom, London.

Gaya, C. (2011) Why Social Security in Tanzania is vastly inadequate, Dar es Salaam,
Tanzania.

Cremer H, et al (2009) Social Security, Retirement Age and Optimal Income Taxation,
paper presented at NBER IFS TAPES Conference on 21 April, 2009 accessed on 11th
May, 2014 from http://dev3.cepr.org/meets/wkcn/5/589/papers/cremer.pdf

Dijkhoff, T (2012) the Contested Value of International Social Security Standards in

the European Union European Journal of Social Security, Volume 14
(2012), No. 3.

Frye, I (2005) Extending Social Security to Developing Countries, Particular

Emphasis on Healthcare and Informal Economy Workers, Global
Union Research Network (GURN), Geneva.

Isaka I (2011), Improving Adequacy of Benefits; The Role of Social Security, A

paper presented during Regional Social Security Forum for Africa,
SSRA, Arusha.

Maghimbi S, Mchomvu A and Tungaraza F (2002), Social Security Systems in

Tanzania, Journal of Social Development in Africa, Vol 17, Tanzania.

Mattoo, N (2000), International Conference on Social Welfare, 29th, Cape town,

South Africa.

Modigliani F (2005), Franco Modigliani and the Life Cycle Theory of Consumption,
Princeton University Press, Rome.

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Appendix I: Questionnaires
TANZANIA INSTITUTE OF ACCOUNTANCY (TIA)
Questionnaires
Dear Respondent,
This questionnaire aims at collecting information concerning the study of the impact of
social security schemes in economic development of Tanzanians.
The purpose of this questionnaire is to request you to express your thought to the
researcher about the impact of the benefits offered by the NSSF in bringing economic
development to Tanzanians.
From your responses, the researcher will be able to analyze and understand the benefits
being given by the NSSF and understand what impact they in economic development of
Tanzanians. This information is for academic purposes only. I therefore request you to
freely fill in the questionnaire below.

Instructions
Choose the correct answer from the multiple choices and put a tick in the brackets. If you
feel you need extra information to be filled attach plain paper at the back of the
questionnaire

Other instructions are indicated as per requirement of the question.

Section A
General Information
1. What is your gender?
a) Male
b) Female ( )

2. What is your age group?

a) Below 20 yrs.
b) Between 20 – 35 yrs. ( )
c) Between 35 – 55 yrs.
d) Above 55

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3. What is your level of education?
a) Certificate
b) Diploma course
c) First degree ( )
d) Postgraduate diploma
e) Master Degree

4. What is your position at work?

a) Junior officer
b) Senior officer
c) Principal Officer ( )

5. How many Years of working experience?

a) Less than five (5) years
b) Between 5 and 10 years
c) Between 10 and 15 years ( )
d) Between 15 and 20 years

6. Where do you work?

………………………………………………………………………………………………
………………………………………………………………………………………………

Section B
Objective; to examine what are the benefits provided by NSSF.
1. Do you know anything about NSSF?
a) Yes
b) No ( )

2. If your answer is yes, what are the benefits provided by NSSF?

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……………………………………………………………………………………………

Objective; to examine the extent to which the Social security Schemes in Tanzania do
meet the minimum standards set the ILO Convention (ILO, 1952).
2. Are the benefits being provided by NSSF do meet the minimum standards provided by
the ILO Convention, 1952?
a) Yes
b) No ( )

Objective; to analyze the impediments towards the provision of benefits by NSSF

3. What are the impediments towards the provision of benefits by NSSF?

……………………………………………………………………..
………………………………………………………………………………………………
………………………………..
…………………………………………………………………….
4. How can the impediments be dealt with?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
……….

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