Why would unemployment protection be relevant in the Rwandan context

Rwanda reported its first COVID-19 case in March 2020. The Government took swift action to prevent the spread of the disease. This included a first lock down which lasted from end of March until beginning of May 2020. Additional measures and lock downs followed at national and or local level during 2021 and to a lesser extend in 2022. The Government provided COVID-19 relief programs to mitigate the socio-economic impact of the crisis and the related response plans. While these measures were crucial to support vulnerable households, they could not prevent an increase in unemployment. Loss of income for workers in the formal sector led to increased demands to be able to withdraw pension savings from the Rwanda Social Security Board to cover short term needs resulting from the economic downturn. The COVID-19 pandemic has highlighted that everyone needs social protection throughout their life.

The economy recovered in 2021 with a GDP growth of 10% after a retraction of 3.4% in 2020. Economic recovery is expected to further continue thanks to the continued vaccination roll out, increased external demand as well as Government support programs for medium and small enterprises[1]. However, the recovery was not reflected in the unemployment rate which continued to be 13 percentage points above pre-pandemic levels with women especially affected[2].

Public employment services have been created in Rwanda in 2013. Public Employment Service Centres have been established in urban areas including Kigali, Musanze and Huye. The Centres are completed by buses which provided mobile services. Active labour market policies are implemented under the National Employment Programme[3]. In addition, the Rwanda Development Board plays a key role in supporting active labour market policies. Under the National Skills Development and Employment Promotion Strategy (2019 – 2024), the Rwanda Development Board provides skills development, employment promotion and employment matching services[4].

The National Strategy for Transformation (2018-2024) reaffirms the central role of social protection in eradicating poverty and enhancing the standard of living of Rwandans. The sector is further guided by the National Social Security Policy (2009) and the National Social Protection Policy (2020 – 2024). The national social protection system includes contributory and non-contributory schemes. The Rwanda Social Security Board (RSSB) - established in 2010 provides six schemes: (1) pension scheme; (2) occupational hazards scheme; (3) maternity leave scheme; (4) medical scheme; (5) community-based health insurance scheme (CBHI) and (6) EjoHeza, a long-term saving scheme with membership available to the whole population. Several non-contributory programmes aim at covering the most vulnerable. Established in 2008, the Umurenge Programme (VUP) is Rwanda’s flagship social protection programme. The VUP provides direct support to extremely poor and labour constrained households but providing adequate coverage to all households in need remains a major challenge.

While social health coverage reaches over 85% of the population, coverage of other schemes remains low. RSSB’s contributory schemes reach only formal workers accounting for less than 10% of the population. However, the COVID-19 pandemic also underlined the vulnerability of workers in the formal economy who currently don’t have unemployment protection. Since its launch in 2018, EjoHeza increased its membership reaching over 3,000,000 subscribers potentially providing protection to additional population groups including informal workers. However, to provide protection, the number of subscribers as well as the amounts saved will need to be increased[5].

The National Social Protection Policy (2020) recognises unemployment insurance as one of the contingencies to be covered in the framework of a life-cycle approach to social protection. The National Social Security Policy (2009) identifies reaching universal social security as an overarching objective: “This means that all Rwandans will be covered with maximum benefits possible for retirement and key pre- retirement benefits such as housing and education, for professional risks benefits, sickness benefits, maternity benefits, health care, and eventually unemployment benefits when social and economic conditions will allow this last branch to be implemented.” The impact of the pandemic reaffirmed the priority given to progress towards universal social protection and let to increased demands for an unemployment protection.

Unemployment protection, as described in the ILO Employment Promotion and Protection Against Unemployment Convention, 1988 (No. 168) and its Recommendation, the ILO Employment Promotion and Protection against Unemployment Recommendation, 1988 (No. 176), is a combination of income security measures (in the form of contributory or social assistance schemes) aimed at guaranteeing a certain standard of living for workers until they can return to work and policies to help unemployed workers increase their employability and search for new jobs. Recommendation 176, in particular looks beyond the social security system and considers the external socio-economic environment in which social security interacts - labour market, the economy and human resources development.

In line with ILO’s policy approach, income security for the working-age population, as guaranteed by a social protection floor (SPF Recommendation 202 (2012)), can take the form of various income-support benefits and/or employment guarantees and services for unemployed workers and the working poor. Such options will combine the income replacement function of social security with employment promotion policies as well as assistance and incentives that encourage real participation in the formal labour market. As such, for the working-age population, a three-dimensional approach combining income security, employment promotion and skills development is perceived as the most effective combination to:

·       ensure a minimum income and prevent unemployed workers and their families from falling into poverty;

·       facilitate the return to employment as soon as possible; and

·       upgrade skills and capabilities for better employability in a changing labour market (adapting to markets and economies as they diversify and are restructured).

Based on this policy approach, the ILO Flagship Programme on Building Social Protection Floors for All supported a capacity building workshop on unemployment protection in Rwanda. The workshop contributed to improved knowledge and understanding of key concepts of unemployment protection and discussed next steps for unemployment protection in Rwanda.