26 November 2012

Rwanda Forging Ahead - Efforts to Create More Jobs On

Umutoni (not real name), 19, has been working with a Kigali-based nightclub as a cashier only on Fridays, Saturdays and Sundays from 6.30 pm until the next morning. Her job, although part time, was the last resort after she left school last year and failed to find what to do.

"I would be relieved if I get a new job paying me more than Frw 50,000 per month," says Umutoni, an orphan stays in a slum located in Kicukiro with a friend.

Nevertheless, you could still say that Umutoni is lucky even though she is underemployed, because others of her age completely rely on others to survive.

Rwanda is facing huge unemployment and underemployment rates among youth, who make up a large part of the Rwandan population. Statistics from the ministry of labor and public service reveal that young people aged between 16 and 35 years represent 61.5% of the whole active population. On average, 125,000 young people join the labor market every year, yet new job opportunities remain at around 100,000.

The International Labor Organization (ILO) considers employed people as those who work at least one hour per week; and unemployed ones as those completely without work, available to work and actively looking for employment. The organization considers full workers as those who work above 35 hours in the formal sector.

The unemployment and underemployment cases can be found among unskilled young people, semiskilled ones and even university graduates. Experts warn that the economy needs to create jobs exceeding the rate of new entrants on the labor market in order to address the issue of unemployment and underemployment situation.

"This requires us to create at least 200,000 new jobs every year from 104,000 created now in order to address the issue of unemployment," said Labor Minister Anasthase Murekezi, speaking at the launch a new initiative called 'Kuremera program' which is meant to foster job creation among people willing to work but who lack start-up capital.

The launch coincided with the second national employment stakeholders' forum that was held under theme 'More jobs and productive employment for a prosperous Rwanda.'

"The government of Rwanda believes that employment promotion is essential to Rwanda's development," said the Minister.

Off-farm employment

According to Vision 2020 target, at least half of the active population should be engaged in off-farm activities. It is in this context that many initiatives such as the Hanga umurimo SME promotion program, internship programs, incubation centers, and the promotion of vocational and technical trainings have been initiated.

Kuremera, which traditionally refers to a kind of support offered by the head of a family to those deemed ready to branch out on their own, emerges as another home-grown solution meant to provide seed capital those who are ready to start up their own livelihoods. The five-year program, explained Anna Mugabo, the director general of labor and employment at Mifotra, originated from March's national leadership retreat in Gako in order to speed up job creation. It targets unskilled, semiskilled young people and women as they constitute a large part of the active population.

"It's really about getting people into employment, but it's not going to be free cash, not social protection."

As the target is to achieve 50% of off-farm activities by 2020, the new initiative will focus on off-farm businesses, agro-processing and commercial agriculture. Small-scale entrepreneurs in commerce, tailoring, knitting, and carpentry, tile works, repair services, bakeries, restaurants, manufacturing, ICT, hair salons, cobblers and other viable activities will be eligible.

"It's really about getting people into employment, but it's not going to be free cash, not social protection because they are going to pay it back so that we can support other beneficiaries," Mugabo explained, adding that no interest will be charged.

While people with existing businesses can apply to the Hanga umurimo program to be connected with banks, Kuremera mainly targets those with small projects to obtain startup capital to buy basic equipment without going to financial institutions.

The fund is to be provided by the government as well as development partners such as the German GIZ, the International Labor Organization (ILO) and the World Bank, among others.

The initiative will be implemented in two phases. The first one commences this year in Kigali and other urban areas by supporting 1,000 beneficiaries, while in the second one at least two people will be supported in each village of other parts of the country.

To make it more sustainable, beneficiaries will be trained in managerial skills and encouraged to form cooperatives and they will have to sign performance contracts with local leaders at sector level.

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