The social protection budget

Towards a Mozambican Social Protection Floor 17 These allocations are still extremely low given the extent of the coverage gaps. Once again, and looking at the problem of fragmentation, it is also advisable for the Government to look carefully at expenditures that despite being social protection are implemented by other institutions, particularly those that have very limited coverage in terms of the number of beneficiaries, and reduced impact. A strategy of concentration in some priority programmes could increase effectiveness and efficiency in the system as a whole. Table 2.4 provides some further insights into MMAS and INAS institutional spending, besides the programme costs. It clearly points to the fact that recurrent and investment costs have higher than programme costs in some years. The positive fact is that this relationship is changing: MMAS and INAS running and investment costs have moved from 139 per cent of the transfers in 2008 to 53 per cent in 2012. Most of the efficiency savings, however, seem to have come from MMAS rather than INAS. Without entering into an analysis of the quality and reasons for this expenditure, one must conclude that the high share of fixed and variable administrative costs is one challenge that needs to be addressed by the sector, while acknowledging that further capital investment and capacity building will be required to face the challenges posed by the implementation of new and larger programmes. Table 2.4. MMAS and INAS institutional spending, executed budget 2008 –12 MT millions 2008 2009 2010 2011 2012 MMAS 455 428 327 370 298 INAS 81 126 180 139 287 Total 536 554 507 509 585 Ratio total institutional costs MMAS + INAS INAS programme costs 139 114 72 71 53 Ratio INAS institutional costs programme costs 21 26 26 19 26 Total institutional + programme costs as a of GDP 0.22 0.21 0.16 0.14 0.14 Note: Within the State Budget the transfers from donors are presented as external investment. To avoid double counting, the authors subtracted the amounts from donors that were channelled to transfers. Sources: OE and CGE 2008, 2009, 2010, 2011, 2012; INAS reports.

2.2.8. Key challenges for the introduction of a Mozambican social protection floor

One of the main challenges for social protection in Mozambique is the low coverage that the system offers as a whole World Bank, 2012. On the one hand, the coverage provided through social insurance mechanisms is restricted to certain categories of the economically active population. Additionally, in some cases the already limited coverage provided by the law does not translate into effective coverage, due to gaps in implementation. The potential of social insurance mechanisms to cover a significant part of the population is thus limited, at least in the short term. On the other hand, non- contributory social protection is also affected by important coverage gaps. As the system, prior to the recent reform, was mainly centred around the PSA, the vast majority of poor households with working-age members and families with children and youth are left out. This in turn reflects the limited budget allocations that are made to the sector, despite the positive trend in relative years. Programme fragmentation and duplication are also a serious constraint to the development of an effective and efficient social protection system. Implemented by a large number of different governmental and non-governmental institutions, with distinct sources