Government to establish national savings scheme

The Government is set to put in place a comprehensive long-term savings scheme for all categories of workers with a target of mobilising around Rwf90 billion in the next three years.
Gatete (far-left) addresses the post-Cabinet news conference yesterday. (Timothy Kisambira)
Gatete (far-left) addresses the post-Cabinet news conference yesterday. (Timothy Kisambira)

The Government is set to put in place a comprehensive long-term savings scheme for all categories of workers with a target of mobilising around Rwf90 billion in the next three years.

This development was announced, yesterday, at a post-Cabinet news conference in Kigali.

 

Explaining the modalities, Finance and Economic Planning minister Claver Gatete said a draft law approved by Cabinet on Tuesday to the effect will be presented to parliament for further scrutiny.

 

Amb. Gatete said the scheme was mulled back in 2014 by a team of consultants and that it was proven feasible, flexible and lucrative.

 

Unlike the usual saving scheme mainly for public servants who contribute monthly, should the draft law be adopted by lawmakers, the proposed scheme will cater for everybody, including low-income earners being able to deposit money through the savings scheme, which they can reclaim later with benefits.

“This law comes to put the system in place to generate savings that can be used partly as pension, its voluntary and flexible and there is no fixed amount of contribution,” he said.

“You can save your money in one month, you can save it in a quarter, depending on where you are getting income and also any amount, meaning that it has to work for everyone, but it is not compulsory that you must be part of this.”

Once the legal framework is in place, the Government will create an independent institution that will be able to use the deposited money in lucrative investments to generate more revenues for the saving members.

The scheme, which will be collecting voluntary contributions from members of the public from all sort of service, whether formal or informal, will operate alongside the community health insurance scheme, commonly known as Mutuele de Sante but in a form of pension savings scheme.

“What I can say, overall, is that this long-term investment is the largest contribution to the savings culture and to the investment culture because all the money will be added, we estimate that we will be able to mobilise about Rwf87 billion in the first three years,” said Gatete.

“You can imagine that money also added to our financial institutions to be invested, it is contributing to the saving but also contributing to the global investment of our economy and towards improvement of welfare of the people,” the minister said.

The law, which is in the pipeline, will also be supplemented by a ministerial order determining how much incentives government will put in, and how much government is supposed to inject in as a form of support to the neediest people unable to make savings.

Having seen that only 10 per cent of the populace was saving for the future through Rwanda Social Security Board, Gatete said it is important that such proposed savings scheme is promoted.

“A farmer can just decide to deposit  their savings after the harvest every after one month, it will all depend on the scale of incomes and this in the future will help contributors to be assured of premiums and incomes, which they can use to take care of their family without a hustle,” he said.

The minister explained that there will be an independent institution to manage the scheme.

The Government’s role will be limited to facilitation, to see whether money was saved and to make sure the savings are safe, hence the relevance of the law, according to the minister.

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