Rwanda: RSSB Schemes Improve Rwandans' Welfare After Genocide Ripped Society Apart


Social security, which was then managed by the institution called Caisse Sociale du Rwanda (CSR) - the Social Security Fund of Rwanda (SSFR) -, was hit by insecurity including political instability and economic slowdown and downturn. Further still, it was stricken by the looting of its assets (deposits) in banks, leaving it almost bankrupt and unable to pay out pension benefits to the pensioners shortly after the Genocide.

Despite such challenges, the social security performance bounced back chiefly under the management of Rwanda Social Security Board (RSSB). Social security ensures the working population will have a secure future through access to various benefits related to the work they have done, such as medical and maternity leave benefits, as well as pension and occupational hazards benefits once they retire respectively as a result of old age, or occupational injuries or diseases that inflict them with permanent disabilities.

RSSB was established by the law No.45/2010 of 14/12/2010 that determines its mission, organisation, and functioning. This institution was formed after the merger of Social Security Fund of Rwanda with Rwanda Health Insurance Fund (RAMA). Now, it is a wealthy institution.

Currently, all Rwandans who are subscribers to RSSB's different social security schemes are enjoying their social security benefits, while they could not get them during or shortly after the Genocide. Besides, genocide survivors who were particularly subjected to miserable living conditions - as they bore the brunt of Rwanda's bad history - are benefiting from livelihoods improvement from RSSB's support. The proofs of the remarkable social security performance thanks to the management of RSSB includes the increment of pension benefits that was made under the Presidential Order increasing pension and occupational hazards benefits granted by RSSB, which was published in the official gazette on April 16, 2018.

The Presidential Order states that pension and occupational hazard benefits granted to the insured person cannot be less than Rwf13,000 per month. Previously, there were pensioners who were receiving less than Rwf5,000 monthly pension benefits. Overall, the move means that RSSB will be spending between Rwf5 billion and Rwf6 billion more money in pension payout that it provides to retirees annually, according to RSSB estimates. More than doubling the retired workers' pension implies an improvement in their welfare, as confirms their union - the Rwanda Pensioners' Association.

Putting to good use the contributions that Rwandans make to the scheme - though they are considered the least in the region they account for 6 percent of the employee's salary evenly paid by the employee and the employer - is one of the means that has enabled such progress. In fact, apart from being responsible for administering the pension scheme, RSSB manages other schemes that are essential to the life of Rwandans. It runs the Medical Insurance Scheme whose members automatically include all civil servants, pensioners who previously contributed towards medical care and private institutions who have been accepted.

In this system, the contributions paid to the Board represents 15 percent of employee's basic salary. It is paid by both the employer and the employee at the rate of 7.5 percent each. RSSB also covers the medical insurance for pensioners with 7.5 percent contribution deducted from their monthly pension.

Another important initiative under its management is the Community-Based health Insurance Scheme (CBHI), commonly known as Mutuelle de Santé, which is intended for the provision of healthcare to most of Rwandans largely working in informal sector. This plan was taken into the hands of RSSB in 2015 after realising that it was faced with poor performance that left health facilities including hospitals, health centres, and district pharmacies unable to get drug stocks on time, or duly pay their workers.

This situation adversely affected patients as they could not get timely medicine. The Maternity Leave Benefits Scheme is another plan being managed by RSSB to provide three-month full pay to working mothers who have given birth in order to care for their lives, those of their new-born babies as well as their entire families.

Pension scheme grows stronger

The number of people in the workforce who are entitled to enjoying social security benefits in the area of pension after retirement has significantly increased thanks to growth in new employers and employees subscribing to the scheme. Indeed, figures from RSSB shows that pension contributors increased threefold from slightly more than 179,700 in 2002 to over 539,000 in 2017/2018 fiscal year, indicating an increase of 300 percent.

The performance of the pension contribution also gained momentum and an upward trend as over Rwf4.29 billion was collected in 2002 against Rwf83.34 billion in 2027/2018 fiscal year. Such growth is considerable as it implies a rise of over 2,000 percent in pension contribution, or that it increased by more than 20 times over the last 15 years. Pension benefits paid out rose from 2.1 billion to Rwf22.2 billion in 2017/2018, which means they increased by more than 10 times.

Medical scheme, CBHI enabling timely treatment

Contributions made to the medical scheme progressively increased from over Rwf2.39 billion in 2002 to more than Rwf42.24 billion in 2017/2018.

Medical benefits paid increased from Rwf787 million in 2002 to Rwf22.23 billion in 2017/2018. This sharp rise in medical benefits means that more people accessed healthcare. The progress in CBHI has enabled Rwandan citizens to seek medical treatment on time, and medical consultations have tripled compared to the numbers recorded in 2000, which is an important aspect in healthcare provision, Diane Gashumba, the Minister of Health told senators in a session held in February 2019.

As of February 2019, figures from RRSB show, Mutuelle de Santé had a coverage rate of 85 percent [of people who should use such insurance], meaning over 8 million Rwandans. The rest of the people such as the public servants and others employed in the formal sector are largely covered by the workers' medical insurance by RSSB, and few others are served by private insurance firms. Given that more, especially costly, health services such as dialysis are being covered under CBHI to better serve communities subscribing to the scheme, the Government considered new avenues to finance this initiative that caters for the majority of its population.

For instance, medical cost estimates indicate that a single treatment with dialysis costs between Rwf100,000 and Rwf120,000, and a patient needs to get the therapy three times a week, amounting to between Rwf1.2 million and Rwf1.5 million a month. Most of the citizens contribute Rwf3,000 annually, Minister Gashumba said, while the government pays Rwf2,000 for each person under the first Ubudehe category - that of the poorest who can't afford it. Such contributions are relatively small given the cost of healthcare.

The insurance covers about 90 percent of the health service cost, while the beneficiary pays 10 percent. Figures from RSSB indicate that contributions to Mutuelle were estimated at over 13.3 billion in the last six months from July to December 2018.

Medical expenses to CBHI subscribers amounted to over 27.4 billion in the same period, representing 126 percent of the contributions. Meanwhile, RSSB Director-General, Richard Tusabe disclosed that under the Prime Minister's Order determining subsidies to CBHI -- which was published in the official gazette in July 2019 -- the government will get at least Rwf10 billion to further support the scheme.

Such financial support, the Order indicates, will come from government's direct funding, penalties on illegal drugs and foods, traffic fees as well as gaming fees among other avenues.

Mothers, babies' welfare improved thanks to maternity leave benefits scheme

Maternity Leave Benefits Scheme is a new social security protection system established in 2016 as part of the Government's efforts towards empowering women through providing fully paid leave from work after giving birth. By so doing, it allowing mothers the opportunity to physically recover and giving newborns the best start in life, RSSB says. RSSB is the custodian of this policy that also aims at preventing maternity leave from becoming a barrier to women's contribution to national development.

Throughout their three-month (or 12 weeks) maternity leave, under the auspices of this arrangement, women get their full salary, helping them better take care of their newborns without worrying about losing 80 per cent of their salary in the last six months of their leave, which was the concern before its existence. Monthly contributions to the scheme total 0.6 per cent of the employee's gross salary with both the employer and the employee contributing 0.3 per cent, each. The contributions are made by all (male and female) employees in Rwanda and by every employer (private or public).

By December 2018, Rwf17.9 billion had been collected in maternity leave benefits, and 5,430 mothers had benefited from the scheme, then, statistics from RSSB revealed. Of such funds, Rwf2 billion was paid out to 1,628 employers who claimed the reimbursement of salaries related to the last six weeks of the maternity leave.

Total contributions for all schemes in the fiscal year 2018/2019 reached Rwf181.9 billion, which is equivalent to 112 percent increase compared to the target of Rwf163 billion, according to figures from its management. Meanwhile, the figures show, benefits payout for all schemes amounted to Rwf100.9 billion against the target of Rwf95.4 billion, representing a 9 percent increase. The benefits were provided to 35,000 pensioners, over 400,000 RAMA affiliates for medical service cost, as well as about 10 million Rwandans who get health insurance coverage under Mutuelle de Santé.

"Ejo Heza" for the well-being of the nation

The Government launched the Long-term Saving Scheme dubbed "Ejo Heza" during the 16th National Dialogue - Umushyikirano - in December last year. RSSB is the administrator of this initiative. It is a defined contribution scheme, established on a voluntary basis by opening a savings account with a scheme administrator - RSSB -and covers both salaried and unsalariedpeople. Many people in the informal sector are in a situation where if they get old such that they are no longer able to work to earn a living, incur crippling injury or are affected by a disease that leaves them with a permanent disability, they will be trapped into poor living conditions as they will not have a pension coverage.

Indeed, only 8 percent of over 5.4 million active population - in the working-age bracket - in Rwanda are engaged in long-term saving through a pension scheme, with the remaining 92 percent not having the long-term saving option, according to information from RSSB. Speaking during its launch, Uzziel Ndagijimana, Minister of Finance and Economic Planning, said that it gives all Rwandans, especially those with little means, easy ways to make savings and get entitled to a monthly pension in their old days. The savings, he added, can also be used as a guarantee to acquire bank loans, informing that the government will also, be giving top-ups to the needy people who have contributed to that initiative in line with ensuring their welfare in the future.

Rwanda seeks to at least double the current savings level by 2024, from 10.6 percent to 23 percent under National Strategy for Transformation, according to Uzziel Ndagijimana, Minister of Finance and Economic Planning. Ndagijimana stated that long-term savings has importance as when its level rises, it increases investment, which makes the economy grow at a high rate, and this improves the assets as well as livelihoods of citizens. The plan came while the savings for old age, the pension is only done by a few people - about 8 percent of Rwandans in the working-age bracket. The small percentage is a result of many Rwandans who are working in the informal sector and have no fixed monthly salary.

Old Rwandans - aged from 60 and above are expected to double by 2032. The study done, Minister Ndagijimana said, indicated that within one year, it is projected that the initiative will have reached over 207,000 people contributing to it by saving about Rwf14.5 billion; while that number could reach 2 million people with estimated savings of about Rwf195 billion within five years.

"We realise that Ejo Heza will raise the level of savings in Rwanda, will further investment in the country, and we hope that it will reduce interest rates [on loans], and will make many Rwandans have welfare in their old days," he observed calling for concerted efforts and encouraging Rwandans to embrace the initiative so that it achieves its objectives. RSSB Director-General, Richard Tusabe said that the number of people registering to Ejo Heza on phone has continued to increase every day, and about 100,000 Rwandans have registered to it, while the institution carries on an awareness campaigns for the public to join it. Citizens deposit savings into their long-term savings account and are free to choose how much and when they wish to save. There will be no penalties for missed contributions.

Rekindling hope for genocide survivors

Among groups of interest to RSSB's social responsibility are survivors of the 1994 Genocide against the Tutsi in which over a million people were killed within 100 days. RSSB began with paying tuition for six surviving children of employees of former Caisse Sociale du Rwanda (CSR) killed during the Genocide. For Emilien Mugiraneza, one of the orphans of former SSFR employees killed in 1994, testified that the educational assistance under auspices of RSSB has proven to be of paramount importance as it helped the genocide orphans to feel that they were not neglected, thanks to caring entities such as RSSB. "When I finished high school, I was worried about how to pursue university studies. I had passed with good grades but as explained by FARG (Genocide Survivors Assistance Fund), we were to get government scholarship in form of a loan through the Development Bank of Rwanda (BRD) like all other Government-sponsored students," Mugiraneza said

"We would have to pay back later after school. Being an orphan, this worried me a lot; I felt like I could not manage to pay off the loan," he expressed. Fortunately, RSSB intervened in that tough time and covered tuition for him, and enabled him to meet his academic needs throughout his university education. "I have studied without interruption... I don't know what life would have been like," expressed Mugiraneza, who currently completed his studies in Electronics and Telecommunications at the College of Science and Technology of the University of Rwanda.

Further still, in line with the RSSB's responsibility to foster the welfare of Rwandans, especially needy survivors, it also provided support to genocide survivors, including Rwf174 million spent on renovating 58 houses, kitchen and toilets for genocide survivors in Kabari village of Kanzenze Sector in Rubavu District in Rwanda's Western. Their houses were built in a rush with the government's urgency to provide shelter to every vulnerable survivor in the aftermath of the 1994 Genocide against the Tutsi, which had split apart the social fabric. Supporting survivors, and their neighbours with access to electricity

Genocide survivors including widows and orphans in Bugesera and Nyanza districts, and other residents were connected to electricity thanks to the support from RSSB. The development presents new economic opportunities for those needy people. The communities were not connected to the national grid until 2014 when RSSB stepped in to provide them with power, in partnership with the Rwanda Energy Group. Access to electricity implies that their business activities are enabled to perform at high level of productivity, and that their homes are effectively lit, which transformed their lives. In Bugesera, RSSB supported the electrification of more than 130 homes including 110 belonging to genocide survivors in Karambi village. Similarly, 52 homes of genocide survivors in Mugali Village of Nyamiyaga Sector in Nyanza District were connected to electricity with help from RSSB in partnership with FARG. The elderly widows who benefited from the support attested that they have enhanced security and a feeling of safety thanks to the light in their homes. Maria Igenukwayo, an old widow said access to the electricity has enhanced her personal security, and she is no longer groping in the dark while at home. For Theoneste Rwagasana, one of the beneficiary residents says he is grateful that there are many awful realities they faced that his 4-year daughter will never know.

"She will for example never know the kerosene lamp that we used for light, or how we used to move for kilometres to Nyamata centre to have our phones charged and pay for the service with money that was so hard to earn." Since the connection to the national grid, life in Karambi has changed for the better significantly with emerging economic opportunities.

At the Karambi trading centre which is a lively attraction to neighbouring villages, Moses Kanamugire, another resident, owns a barbershop made possible by connection to electricity. He earns at least Rwf2, 500 daily which has greatly benefited his life. For Alfred Munyeshuli, electricity helped him to establish a metal wielding shop in Karambi which employs fellow youth. "I have managed to buy a cow, a bicycle and wielding equipment for my workshop in three years," Munyeshuli said.

RSSB to build affordable decent houses for low-income earners

If you reside in the City of Kigali but don't own a house, you could soon be able to acquire your dream home that meets city master plan by paying only between Rwf10 million and Rwf20 million thanks to a new housing project in the offing. Tusabe said that the business plan of this project commissioned by RSSB has already been made, and procedures are ongoing such that construction will start by the end of this year.

Information from RSSB show that some 7,000 of such low-cost houses are expected to be constructed in Gasogi of Gasabo District. "It will be a very affordable segment of our subscribers," Tusabe said. The country faces problems in the construction sector especially real estate, Tusabe remarked, pointing out that RSSB has been investing in this area since 2003 in order to contribute to addressing such a concern. He cited Kagugu-based Vision 2020 Village, Mucyo Vision City Phase One estates.

Thus far, RSSB is one of the major investors in the real estate sector in Rwanda.Its properties also include Gaculiro Vision City, and Batsinda estates. In addition, it set up commercial plazas in different districts across the country to address the problem of lack of offices, among others.

Gaculiro Vision City, which occupies 157-hectare plot with 4,500 housing units, is one of the biggest real estate projects in Rwanda with an investment of about $400 million (over Rwf320 billion). It is primed to contribute to meeting the housing needs in Kigali.

"We are proceeding to fill the gap in house construction by taking into account all the levels of our subscribers including those who have high, or medium, [financial] means," Tusabe said. "We also plan to work with subscribers so that they can easily get a house, for instance through using savings in Ejo Heza as a guarantee.

In addition, Tusabe observed that they can also work with banks by lending them RSSB funds at a low-interest rate so that they give affordable loans to the subscribers so that they can afford the house.

After collection of contributions and payment of benefits, RSSB invests the surplus in order to meet future liabilities.

RSSB investment portfolio grew progressively and reached a record Rwf1.01 trillion as of June 30, 2019, according to information from the institution's management.

In the financial year 2018/2019, RSSB invested Rwf418 billion and registered Rwf48.5 billion in profits, as per its statistics.

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