Welcome to CENFACS’ Online Diary!
14 June 2023
Post No. 304
The Week’s Contents
• Creations and Innovations to Win the Battle against Crises: e-Discussion on Winning the Battle over Falling Real Household Disposable Incomes from Week Beginning Monday 12/06/2023
• Coming this Summer 2023: FACS Issue No. 80 to Be Titled as ‘Pension and the Reduction of Old Age Poverty in Africa’
• Holiday Budget Clinics
… And much more!
Key Messages
• Creations and Innovations to Win the Battle against Crises: e-Discussion on Winning the Battle over Falling Real Household Disposable Incomes from Week Beginning Monday 12/06/2023
Our June 2023 working theme continues to be run as we will be e-discussing how to win the battle over falling real household disposable incomes. This e-discussion followed the workshop on creating and innovating to succeed in the struggle against the cost-of-living cost. The rise in the cost-of-living crisis can be the expression or the cause of falling real household disposable incomes.
For instance, according to the Office for Budget Responsibility – quoted by ‘independent.co.uk’ (1),
“The rise in the cost of living means real household disposable incomes per person is forecast to drop by 3.7% in 2022/23 and by 2% in 2023/24. 3.7% is [still] the largest fall in a single financial year since comparable records began in 1956/57. The 5.7% cumulative fall across 2022/23 and 2023/24 is the largest two-year fall since records began”.
Likewise, the Research briefing produced by the House of Commons Library of UK Parliament (2) quoting the Office for National Statistics and the Office for Budget Responsibility indicates that
“95% of adults in Great Britain reported an increase in their cost of living in May 2023. The Office for Budget Responsibility expects real post-tax household income to fall by 4.3% in 2022 to 2023, the biggest fall since comparable records began in 1956”.
If the fall in post-tax household income is historically big, then households have the battle in their hands which they need to win to avoid further damages on them and to their children or future generations. To win this battle, it requires creations and innovations amongst other things. To win it, one may consider both internal obstacles within themselves and external impediments coming from the economic environment that are causing them suffering.
The e-discussion will provide an opportunity for sharing the winning tricks and combat strategies that some of you/our members of the community have adopted or will adopt in order to win the fight against falling real household disposable incomes. It is an invitation of contributions and insights from our members and non-members on the issue of winning the battle over falling real household disposable incomes.
Under the Main Development section of this post, we have provided further information about this first key message.
• Coming this Summer 2023: FACS Issue No. 80 to Be Titled as ‘Pension and the Reduction of Old Age Poverty in Africa’
Abstract –
Quite often in many parts of Africa, most poor people are not covered by pension systems and schemes like in developed regions of the world. Many of them when they reach the old age suffer from old age poverty. They tend to rely on their families and friends for support which is often limited to lift them out of poverty. Even social insurance programmes are far from reducing the old-age poverty in Africa. Where there is pension, the monetary value of this pension tend to be below the poverty line and incapable of lifting old-aged poor people out of poverty.
This pension is incapable of lifting them if it is below $3.65 per person per day and does not match the poverty line of the $3.65 per person par day for middle-income countries as provided by the World Bank (3). Yet, pension is important to support people as they get to the old age. As Fiona Stewart and Juan Yermo (4) argue that
“Pensions play an important role in poverty alleviation of the elderly – one of the most vulnerable groups in any society, particularly older women”.
To highlight this important role of pensions, CENFACS’ 80th Issue of FACS will deal with ‘Pension and the Reduction of the Old Age Poverty in Africa‘. In other words, the Issue No. 80 will concentrate on how pension can be used to reduce poverty amongst the older generation in Africa. It will look at how to allow poor people to continue to consume after they have stopped working without getting into consumption poverty. It will be a discussion on the alignment of pension at or above the poverty line. It will further be a story of building sustainable retirement to avoid multi-dimensional poverty in the old age.
There are studies that have been done pension and old age wellbeing. For example, Nicholas Barr and Peter Diamond (5) argue that the aim of pension is to ensure economic security in old age. Within this aim, Barr and Diamond provide the following objectives of pension: consumption smoothing, insurance, poverty relief and redistribution. They also include other objectives of pension like economic development and economic growth.
The Issue No. 80 will focus on the objectives of poverty reduction and sustainable development with the aim of ensuring sustainable security in the old age. The aim of sustainable security will include economic, environmental and social sustainability for the pensioners.
Far from being a story of contributions and benefits, the Issue No. 80 will not only deal with pension as payment made to persons who have retired from paid employment in the form of lump sum and regular income. Instead, it will help revisit the impacts of non-contributory pension programmes – for countries that run them – on poverty reduction and sustainable development. What else will the Issue No. 80 tell us?
The Issue No. 80 will give insights on how a good pension policy and practice can help reduce old age poverty and enhance sustainable development. In this respect, the Issue No. 80 will take a micro-economic view of pension. It will be about how for example Africa-based Sister Organisations can organise themselves in creating and innovating pension support to the elderly of the communities they work with to reduce and possibly end old age poverty. This is without forgetting the people making or staffing their organisations.
Given that the current Africa’s economic growth is not enough to reduce poverty, the Issue No. 80 will explore ways of equating minimum pension and average income to help reduce old age poverty in this restricted context of limited economic growth. But, what do we mean old age poverty?
The Issue No. 80 will use the definition of old age income poverty as provided by the Organisation for Economic Cooperation and Development (OECD). The OECD (6) gives the relative concept of old age poverty by arguing that
“Old age income poor are individuals aged over 65 having an income below half the national median equivalised household disposable income”.
The same OECD considers that
“The yardstick for poverty depends on the medium household income in the total population in a particular country at a particular point in time”.
The Issue No. 80 will also refer to economic theories of pension or economics of pension (like the theories of Barr and Diamond as mentioned above) to further hep those of our members who would like to dive deeper into the relationship between pension and the old age poverty to inspect the correlation between universal (untargeted) social pension and old age poverty reduction in Africa.
Away from being a descriptive presentation, the Issue No. 80 will use classes of measures about poverty indicators (such as poverty gap ratio) in order to advocate what needs to be done to support elderly Africans, who are beneficiaries of project run by our Africa-base Sister Organisation, who cannot rely on family support to get the backup they need.
The Issue No. 80 will provide some ideas about how Africa-based Sister Organisations can support and/or are supporting the elderly to get away from overlapping crises (including pension crisis) faced by Africa and protect their insurance. They are doing it by helping them to access cash transfer programmes for the elderly.
To get inside scoop on the Issue No. 80 or to reserve a copy before its publication, please contact CENFACS.
• Holiday Budget Clinics
As we are heading into the summer holiday season, we are holding holiday budget sessions or clinics for those who need them. These sessions or clinics are part of CENFACS‘ service offered under financial advice, guidance and information about funding for holiday (i.e., Finance 4 Holiday).
• • What are Holiday Budget Clinics (HBCs)?
HBCs are customised sessions of consultation for those with holiday budgeting needs who want special advice on the matter of making, revising and executing a holiday budget.
• • How CENFACS Can Work with HBC Applicants
Through HBCs, we can offer the following three free-of-charge sessional services:
a) Budget set-up session
Under this sessional task, we can work with the applicants to create their holiday budget.
b) Budget verification or clean-up session
If you have already done your budget, you want us to verify it.
c) Full budget session
If you want us to write it from scratch, verify and advise you including on how to use online budget planner or calculator.
To arrange for a holiday budget session, you need to book an appointment.
Extra Messages
• Spring 2023 Rebuilding Activities
• World Anti-poverty System: Poly-crises Can Pave the Way for Re-creating and Innovating the International System through an International System for Poverty Reduction
• Be.Africa Forum e-discusses Investing in African Women’s Equal Access to Land and Related Assets within the Context of African Continental Free Trade Area
• Spring 2023 Rebuilding Activities
The coronavirus disaster, the cost-of-living crisis, energy crisis, food crisis, etc. have left some scarce on many people. Many in the community are still struggling to come to term with them.
To work with those of them who are struggling to manage during this Spring, we are organising four types of activities. These activities are part of our Season of Rebuilding/Renewal. Let us highlight them, the circumstances under which users can access them and the invitation to participate.
• • Types of Rebuilding Activities
The four activities include the following:
a) Activities to end the bad past (to manage endings)
b) Activities to manage transition (to turn endings to new beginnings)
c) Activities to manage new beginnings
d) Activities to manage plan for the future.
These activities are part of our campaign of Rebuilding and Renewing Lives, in particular Rebuilding Africa during Spring Relief season.
• • Accessing Rebuilding Activities
Depending on people’s circumstances of life (whether they are looking forward to managing transition or embarking on new beginnings or building the future), they will be supported accordingly in these activities.
For example, if the post-crises needs assessment indicates that a user needs transition management, then they will take part in activities to manage their transition from the remnants of the multi-crises.
• • Need to Participate in Spring 2023 Rebuilding Activities?
To take part in the Spring 2023 Rebuilding Activities, please contact CENFACS. These activities will continue to be run after Spring 2023 if people need them.
• World Anti-poverty System: Poly-crises Can Pave the Way for Re-creating and Innovating the International System through an International System for Poverty Reduction
To explain why an International System for Poverty Reduction is badly needed, let us first try to briefly understand poly-crises.
According to the ‘weforum.org’ (7),
“Polycrises occur when concurrent shocks, deeply interconnected risks and eroding resilience [happen] and where disparate crises interact such that the overall impact far exceeds the sum of each part” (p. 9)
The ongoing polycrises (like the cost-of-living crisis, climate crisis, human insecurity, food crisis, livelihood crisis, geo-economic crisis, pension crisis, etc.) can help the international development community to realise that another system is now desirable. Every time there is a global crisis or a collection of crises – call them polycrises – striking at the same, it is also a reminder of the best possible global mechanism of dealing with crises. The world can re-create and innovate the international system through the Creation of an International System for Poverty Reduction, which does not exist. The current polycrises are yet a further occasion to raise the question of an international or global system to deal with poverty induced by polycrises.
Polycrises could be a ground to create an International System for Poverty Reduction or to innovate the world’s institutions, if they exist, dealing with global poverty. Indeed, developing countries of Africa, Asia, Middle-East and Latin America are trapped by the current international system. For example, let us be honest to recognise that Africa has its own internal problems that often lead to poverty and hardships. Besides that there are global or extra-African factors (like geo-economic and geo-strategic ones) that repeatedly feed poverty to Africa.
However, if we had an International System for Poverty Reduction (that is a World Anti-poverty System comparable to the institutions of Bretton Woods System), would this system makes the world a better place for the poor?
Every time, there is a global crisis or overlapping crises, this question comes back, time and time again. In particular, one could raise and answer the following question:
If we had an International System for Poverty Reduction, would the impacts of polycrises be severe on poor people?
If you think that an International System for Poverty Reduction could have protected the world’s poorest from polycrises, please let us know your arguments. If you do not think so, still let us know what you think.
An International System for Poverty Reduction is a missing piece in the world’s institutional systems. This is CENFACS‘ campaign point, which is the creation of an International System for Poverty Reduction.
You can support the campaign or movement for a World Anti-poverty System or International System for Poverty Reduction with your VOICE, by E-SIGNING petition, E-MOBILISING your energy, BRANDING EVENT, etc.
You can join CENFACS’ Campaign for an International System for Poverty Reduction. To join, please contact CENFACS.
• Be.Africa Forum e-discusses Investing in African Women’s Equal Access to Land and Related Assets within the Context of African Continental Free Trade Area
This coming 17 June 2023 is the United Nations’ remembrance Day of the Desertification and Drought (8). The global focus of the 2023 Desertification and Drought Day is on women’s land rights.
To echo the theme of the Desertification and Drought Day, CENFACS is discussing Investing in African Women’s Equal Access to Land and Related Assets in the Context of African Continental Free Trade Area. Indeed, many studies and evidence show that smartly investing in women in Africa could positively impact not only women themselves but the entire society.
This discussion is part of Building Forward Better Together with Communities and Africa-based Sister Organisations. Those who may be interested in the discussion can join in and or contribute by contacting CENFACS’ be.Africa, which is a forum for discussion on matters of poverty reduction and sustainable development in Africa and which acts on behalf of its members in making proposals or ideas for actions for a better Africa.
To communicate with CENFACS regarding this discussion, please use our usual contact details on this website.
Message in French (Message en français)
• Séances budgétaires des vacances
Dans le cadre du projet du CENFACS « Finance pour les vacances », nous organisons des sessions ou des cliniques sur le budget des vacances pour ceux/celles qui en ont besoin.
• • Que sont les Cliniques Budget des Vacances (CBV)?
Les CBV sont des séances de consultation personnalisées pour ceux/celles qui ont besoin d’un budget de vacances et qui souhaitent obtenir des conseils spéciaux sur l’établissement, la révision et l’exécution d’un budget de vacances.
• • Comment le CENFACS peut travailler avec les candidat(e)s de CBV
Par l’entremise des CBV, nous pouvons offrir gratuitement les trois services de session suivants:
a) Session d’établissement du budget
Dans le cadre de cette tâche de session, nous pouvons travailler avec les candidat(e)s pour établir leur budget de vacances.
b) Vérification du budget ou séance de nettoyage
Si vous avez déjà fait votre budget, vous voulez que nous le vérifions.
c) Session budgétaire complète
Si vous souhaitez que nous l’écrivions à partir de zéro, vérifiez et vous conseillez, y compris sur la façon d’utiliser le planificateur et calculateur de budget en ligne.
Pour organiser une session budgétaire de vacances, vous devez prendre rendez-vous avec le CENFACS.
Main Development
• Creations and Innovations to Win the Battle against Crises: e-Discussion on Winning the Battle over Falling Real Household Disposable Incomes from Week Beginning Monday 12/06/2023
The following items cover this Main Development:
∝ About the e-discussion on Winning the Battle over Falling Real Household Disposable Incomes
∝ Why Winning the Battle over Falling Real Household Disposable Incomes
∝ What are Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes?
∝ Types of Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes
∝ Working with the Community to Win the Battle over Falling Real Household Disposable Incomes.
Let us highlight each of these items.
• • About the e-discussion on Winning the Battle over Falling Real Household Disposable Incomes
This e-discussion is an open informal asynchronous conversation to engage members of our community to examine creations and innovations in depth to win the battle against falling real household disposable incomes. It is also a deep reflection session on what our members have done so far to win this battle. We hope to use discussion tools and capture the results of this debate for monitoring and evaluation purposes.
Those of our members who would like to take part in the e-discussion can let CENFACS know. Those who would like to share their experiences or lessons about the way they managed to fight against and win the battle over falling real household disposable incomes, they can use this opportunity of the Creative Economic Development Month to share.
• • Why Winning the Battle over Falling Real Household Disposable Incomes
Since real disposable incomes for households started falling, many people have been trying things to stop the fall. Some of them have succeeded, others have not. In idealised world, most of them would like to win this battle – this war. As Joanne Reed (9) argues
“War is part of life, it is in the nature of most living organisms to engage in battle, defeat opponents, assert power and dominate. With humans, we see this happens in wars, in business, on a soccer field, in video games, and the chances are even when we are not waging war against our environment, we are waging war against ourselves”.
Waging war against fall in real household disposable incomes can help avoid poverty or exacerbation of poverty. The best way of waging this war is to create and innovate solutions to income falls.
• • What are Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes?
They are productions/makings and changes undertaken to overcome the drop in the amount of income (adjusted for inflation) which households/consumers have available after paying income tax, national insurance contributions and pension contributions. Without these creations and innovations, the battle over falling real households disposable incomes can take long and even unwinnable.
• • Types of Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes
As said above, Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes are those of helping to increase disposable household income. In other words, they are those of winning the battle against the increase of income tax, national insurance contributions and pension contributions that negatively impact households’ disposable incomes. They are as well those of fighting the impact of inflation on the same incomes. Therefore, the types of creations and innovations we are concerned with would be those may help to win this battle.
Amongst the types of creations and innovations we are looking forward are those that
√ deal with inflation that raise the price of essentials while squeezing spending power
√ increase disposable income savings
√ reduce tax liability
√ increase disposable income (e.g., creations and innovations to earn more money, to negotiate high salary, to find additional job, to start a side business, etc.)
√ improve average retirement income
√ reduce expenses (e.g., creations and innovations to lower utility bills, find affordable housing, to use cheap means of transport, etc.)
√ cut back on non-essentials (e.g., subscriptions to entertainment, gambling, etc.)
√ create multiple streams of income
√ diversify asset classes as a fighting weaponry
etc.
All these above-mentioned types of creations and innovations can be used to win the battle against falling real household disposable incomes. Some of these types of creations and innovations could effective in the fight, others may be ineffective. However, unless one tries to fight a battle with the weapons they have available, then they will know if they will win or lose that battle. In other words, unless one tries to battle to win over poverty induced by falling real household disposable income, then they will know what looks like this kind of battle and how to win it. Let us give a try with the community.
• • Working with the Community to Win the Battle over Falling Real Household Disposable Incomes
There is a number of ways in which CENFACS can work with the community to help Win the Battle over Falling Real Household Disposable Incomes.
To help the community in this direction, we will be working with them by referring to the types of creations and innovations we have mentioned so far and to our model of creative economic development as shown by the above figure. In our model of working with them, we shall include the following:
√ Setting up a basic fighting plan to win the battle over falling real household disposable incomes
√ Providing them with leads to winning the battle over income falls
√ Advising them on the best possible options in terms battle strategies to fight for their income
√ Explaining them techniques to create two to three income streams
√ Recommending them to use money or finance apps (like Money Dashboard)
√ Working with them to restructure their accounts to increase disposable income while avoiding negative disposable income
√ Adding an inflationary index-link to their disposable income plan
√ Creating a wait list to reduce impulse spending
√ Helping them to read and understand information about real household disposable incomes
√ Advising them on how to react and prepare from financial news, warnings, notices and alert messages about real household disposable incomes
√ Developing the basic financial skills to interpret the impact of income tax, national insurance and pension contributions/policy announcements on their income
√ Building their financial literacy statistics and numeracy skills to enable them to read financial information pages (presented in the form of charts, tables, in brief infographics) about real household disposable incomes
√ Organising activities or workshops to help them deepen their understand of real household disposable incomes in the handling of their household financial affairs and plans
√ Improving their knowledge in terms of the key financial dates to save in the calendar about key policy announcements (for example, the release date of budgets by the Government and how these budgets can impact their real incomes)
√ Motivating them to follow news and information about real household disposable incomes
√ Asking them to subscribe to free providers of information and tools about income creation and innovation that touches their life (e.g. free subscription to magazines, papers and websites that provide information about real disposable incomes for poor or low income households)
Etc.
All these ways of working with the community members will help to win or at least to try to win the battle against falling real household disposable incomes. This is because the more informed they are, the more they will find the tools, tips and hints they need in order to create and innovate to win the battle against slips, trips and falls of their real disposable incomes. It is all about working with them to improve the way they can create and innovate to win the battle against poverty and financial hardship now and for the future.
For any queries and or enquiries about the e-discussion on Creations and Innovations to Win the Battle over Falling Real Household Disposable Incomes, please contact CENFACS.
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• References
(1) https://www.independent.co.uk/business/budget-2023-record-fall-in-disposable-income-and-other-historic-benchmarks-b2301562.html (accessed in June 2023)
(2) https://commonslibrary.parliament.uk/research-briefing/cbp-9428 (accessed in June 2023)
(3) https://www.devinit.org/resources/poverty-trends-global-regional-and-national/# (accessed in June 2023)
(4) Stewart, F. & Yermo, J. (2009), Pensions in Africa, OECD Working Papers on Insurance and Private Pensions, No. 30, OECD publishing, ©OECD. doi://10.1787/227444006716 (accessed in June 2023)
(5) Barr, N. and Diamond, P. (2006), The economics of pension, Oxford Review of Economic Policy, Vol. 22, No. 1
(6) https://www.oecd-ilibrary.org/sites/d76e4-fad-en/index.html?itemld=/content/component/d76e4fad-en (accessed in June 2023)
(7) https://www.weforum.org/reports/global-risks-report-2023/ (accessed in June 2023)
(8) https://www.unccd.int/news-story/notifications/desertification-and-drought-day-17-june-2023 (accessed in June 2023)
(9) https://medium.datadriveninvestor.com/how-to-win-everyday-battles-08553edb539f (accessed in June 2023)
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• Help CENFACS keep the Poverty Relief work going this year
We do our work on a very small budget and on a voluntary basis. Making a donation will show us you value our work and support CENFACS’ work, which is currently offered as a free service.
One could also consider a recurring donation to CENFACS in the future.
Additionally, we would like to inform you that planned gifting is always an option for giving at CENFACS. Likewise, CENFACS accepts matching gifts from companies running a gift-matching programme.
Donate to support CENFACS!
FOR ONLY £1, YOU CAN SUPPORT CENFACS AND CENFACS’ NOBLE CAUSES OF POVERTY REDUCTION.
JUST GO TO: Support Causes – (cenfacs.org.uk)
Thank you for visiting CENFACS website and reading this post.
Thank you as well to those who made or make comments about our weekly posts.
We look forward to receiving your regular visits and continuing support throughout 2023 and beyond.
With many thanks.
