Situation and Priorities

Social protection situation

Eswatini is a lower middle-income country with more than half (58 per cent) of its population living with less than USD 3.65 per day (a lower middle-income country poverty rate) and 55 per cent of all workers working informally. Its investment of 6 per cent of GDP into social protection (excluding health) effectively covers 36 per cent of population with at least one benefit. Coverage of older persons with pensions (non-contributory or contributory) is near universal followed by coverage of workers in case of work injury, children and vulnerable groups. Existing social security schemes are not fully aligned with social insurance principles, and lack risk pooling, solidarity and adequacy. For example, maternity and sickness benefits are based on employer’s liability and work injury benefits are delivered as lump-sums. Strict eligibility criteria for non-contributory benefits as well as required contributory capacity exclude many workers in informal economy from coverage.

The government and social partners are making strides towards design of comprehensive national social protection system. The National Social Security Policy (NSSP) and its Implementation Action Plan were developed with ILO support through consultative process with social partners and adopted by Cabinet in 2021. This paved a way for the re-design of maternity and sickness benefit and the design of the unemployment insurance scheme based on actuarial valuations completed with ILO’s support and in consultations with social partners. Additionally, progress has been made to strengthen the national system for social protection statistics.

Decisions about institutional arrangements for the management of unemployment, maternity and sickness benefitschemes as well as the adoption of a draft Bill on Unemployment Benefit Fund are pending. Institutional strengthening includes formation of the Unemployment Insurance Benefit Fund and the conversion of the Eswatini National Provident Fund into a social security organisation. Additionally, constituents have prioritised the review of the existing Workmen’s Compensation Scheme and its alignment with standards for insurance in case of employment injury.

Eswatini is also participating in the global ILO – IMF collaboration on financing social protection focusing on feasibility of introduction of unemployment insurance. ILO and IMF co-drafted an IMF Selected Issues Paper on labour markets and unemployment insurance in Eswatini, which was presented during the IMF mission workshop hosted by the Central Bank in July 2024 providing evidence that unemployment insurance in Eswatini is both feasible and affordable.

Government and social partner priorities

• Implementation of the National Social Security Policy (NSSP), including the establishment of a National Social Security Authority to champion the progressive realization of a comprehensive social security system.
• The NSSP seeks to establish over time, a comprehensive and inclusive social security framework in the Kingdom of Eswatini with a view to expand coverage, introduce additional social security benefits (maternity, sickness benefit, family/child benefits), improve survivors and disability benefits.
• Conversion of the Provident Fund to a pension fund - The conversion of the Eswatini Provident Fund (ENPF) into a National Scheme Pension Scheme is a long-standing goal and critical component of the Government’s comprehensive social security agenda.  The existing National Provident scheme delivers lump sum benefits, which provide only short-term income protection to workers, and does not protect adequately in the longer term. Benefits depends entirely on accumulated savings and the performance of investments. In line with the NSSP, it is envisaged that the proposed National Pension scheme (a mandatory Defined Benefit scheme) will pay periodical benefits, a minimum pension and regular indexation of benefits to ensure long term protection of members. It will also extend coverage to currently uncovered populations, including the informal sector and non-citizens and ensure portability of benefits.
• Establishment of a long-term and sustainable unemployment insurance benefit and the fund to manage it fund.
• Establishment of an Employment Injury insurance scheme. Employment Injury is currently administered on an individual employer liability basis - which does not provide adequate protection.
• Develop a National Employment Policy, and strengthening/establishing public employment services to fill the gap of lack of a policy and institutional mechanisms to facilitate access to employment services and active labour market policies in line with the dual objective of unemployment protection.