Rwanda is exploring ways to set up an unemployment insurance scheme to provide income security to employees who lose jobs involuntarily because of economic crisis, and layoffs, among other circumstances, it has emerged.

A three-day workshop held in Kigali (in October), equipped participants with a better understanding of what unemployment protection is and how it brings together unemployment benefits ensuring income security and active labour market policies supporting laid off workers to get back into employment.

The workshop was delivered by the International Labour Organization (ILO) under the Rwanda component of the Global Flagship Programme on Building Social Protection Floors for All with funding from the Governments of Belgium and Luxembourg.

It brought together representatives of different public institutions including the Ministry of Public Service and Labour, Rwanda Social Security Board (RSSB), the Ministry of Finance and Economic Planning, Rwanda Development Board, the Private Sector Federation, and Labour unions.

Also called an unemployment benefits scheme, it is a type of insurance that pays money to individuals when they lose their jobs after meeting certain eligibility requirements. Such requirements might include being unemployed involuntarily, and proof that you are actively seeking work as you collect benefits to sustain your family.

Currently, there is no provision for unemployment benefits under Rwandan labour legislation. However, employees are entitled to terminal benefits if they have served for at least 12 consecutive months prior to contract termination.

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Jasmina Papa, a social protection specialist at ILO, told The New Times that they were "exploring possibilities for Rwanda to introduce unemployment insurance and to link unemployment benefits stemming from an insurance scheme with active labour market policies.

"Unemployment protection aims at helping people who have lost their job to have income security but also to access training opportunities and other support measures such as job counselling and matching to enable them to find new decent and sustainable jobs.”

"The risk of people losing their jobs is one of the risks that should be covered by a social protection system according to the ILO Convention on social security minimum standards. The Covid [pandemic] times, when many people were affected by job loss, showed how important it is that there is a system in place which can support those workers,” she observed.

"The ILO conventions provide guidance to the countries on how those benefits should be designed. They provide for example guidance for how long a person should have contributed to the unemployment insurance to be eligible to receive the benefit, for how long a benefit should be paid or to what percentage of the salary the benefit should amount. The guidance also highlights the need to create linkages with other active labour market policies such as training and assistance in job search,” she said.

The workshop provided an overview of unemployment protection as part of a comprehensive social protection system and how it links to employment promotion initiatives.

Rwanda Social Security Board’s mandatory schemes currently provide pension benefits, maternity leave benefits as well as employment injury benefits but no unemployment benefits on the first day.

RSSB is also managing the Ejo Heza scheme which targets the informal economy as well as the community-based health insurance (CBHI) and the medical insurance (Rama).

Several initiatives already to promote employment through the employment service centres, the employment promotion units at district level as well as through public works programmes including the Vision Umurenge Programme. Participants discussed how those programmes can be strengthened to help not only persons who lost their jobs but also youth who are first-time job seekers and workers in the informal economy.

On the following days, the workshop focused on the specific design and institutional aspects of an unemployment protection scheme such as contributions, claims, payment of benefits to eligible people, and clients’ satisfaction; legislation, and linkages with other employment services.

Participants had the opportunity to also learn how such schemes are implemented in other countries including Tanzania and South Africa where such schemes exist already. Eswatini and Kenya are two other countries in the region that consider developing such schemes.

Based on those experiences participants discussed how these concepts can be adapted to the context in Rwanda.

Other participants, said that the unemployment insurance being considered is meant to address the pressing challenge of job loss, providing a much-needed income security for workers who currently face challenges in meeting their social security requirements.

It was argued that as of now, the pension scheme only benefits employees who have reached the retirement age and are eligible for related benefits.

Some people often find themselves without employment and struggle to secure new positions. This scheme could offer them a crucial source of income security while they continue their job search, enabling them to support both themselves and their families.

The next steps for developing an unemployment insurance scheme in Rwanda would be to do a feasibility study and to establish a tripartite technical committee which can develop a proposal to be submitted to the authorities.

According to "Unemployment Insurance Around the World: Evidence and Policy Options,” a publication of October 2019 by the International Labour Organization (ILO), there were 40 countries with unemployment benefit schemes, including Mauritius and South Africa on the African continent.

Throughout the world as of 2020, 98 countries provide some sort of unemployment protection schemes, excluding countries that rely only on severance payments.

Most of the countries, 82 of them, provided such benefits under a social insurance scheme described as unemployment insurance (UI), according to the "International practices of income protection for unemployed persons: Implications for Indonesia,” published in 2020.

The annual unemployment rate in Rwanda stood at 20.5 per cent, indicating that roughly for five persons in the labour force there was one person unemployed, according to the Labour Force Survey Annual Report 2022 by the National Institute of Statistics of Rwanda.

The survey results showed that the working-age population (from 16 years and above) in the labour force amounted to more than 4.4 million persons.