KIGALI - The Government is servicing a Rwf 51 billion debt to the Social Security Fund of Rwanda in arrears that accumulated before the Genocide, The New Times can exclusively report. The Director of Contributions and Benefits; Oswald Munyandekwe, said in an interview yesterday that the debt was originally Rfw 61 billion before the government started paying it off in 2006.
KIGALI - The Government is servicing a Rwf 51 billion debt to the Social Security Fund of Rwanda in arrears that accumulated before the Genocide, The New Times can exclusively report.
The Director of Contributions and Benefits; Oswald Munyandekwe, said in an interview yesterday that the debt was originally Rfw 61 billion before the government started paying it off in 2006.
He explained that the debt accumulated mainly as a result in delays in paying employee contributions, penalties and other interests.
"The previous government had serious issues where they would declare employee contributions but fail to pay the money, thus ending up owing much more because of the fines levied on delays,” he explained.
According to law, failure to pay or to declare employee contributions on time is penalised with a 1.5 percent interest.
Munyandekwe explained that by the end of 2005, the government owed Rwf 31 billion in employee contributions and penalities while another Rwf 35 billion was in accumulated debts by the government between 1990 and 1994.
Africa Ramba, the Director of Investments at SSFR, explained that to service the loan, an agreement was signed between the SSFR and government where the Rwf 66 million debt was changed into a government bond.
"It was agreed that the government would pay beginning with 2006 and the debt would be cleared by 2018. So far, it has cleared a Rfw 10 billion debt,” he explained
He however explained that the total amount did not include interest which is paid quarterly while the principle amount is paid annually.
"The agreement stipulates that the debt will be paid in serial bonds which will all have different values. Each year has a date at which its bond matures,” he explained
Munyandekwe said that currently, his office recieves employee contributions on time though there are still delays in making declarations.
"Delaying to declare is penalised with a 1.5 percent interest. What people don’t realise that in a year, the interest has become 36 percent which in most circumstances is a lot of money,” he said.
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