Focus: Unemployment held by the horns in Rwanda

Jean Claude Ntamabara joined the army at the age 19 and served for 11 years. When he was discharged two years ago, he could only work as a night watchman; “it was boring and demeaning,” he says. Ntamabara did know any skill in civilian life outside green uniform. According to Joseph Murenzi a Population expert based in Kigali, “army discharges withstanding, the very high population growth rate in Rwanda has ensured there are so many unproductive, unskilled and therefore unemployed people in the country.” To address the problem of rampant unemployment in the country, the government adopted PDL-HIMO, a labour intensive technique that ensures work which would otherwise be done by machines is done by people. It was meant to target mainly the high number of widows, demobilised security operatives, orphans and vulnerable children. Through this scheme, the government hopes to increase the flow of aid as well, such that money spent on development projects in the country remains in hands of many Rwandans instead of a single contractor. These projects especially construction projects of roads in rural areas, house blocks, water channels and the ongoing optical fibre wire networks across the country. As part of initiatives to achieve that target, government has encouraged all her stakeholders to adopt the use of labour intensive techniques so that national development can trickle down to the entire population while maximizing local resources. Mulindi Kabuga road construction is one such project where PDL-HIMO has been used instead of machinery. Jean Ndagijimana, a technician supervising over 600 casual employed in stone crashing, masons, porters, and water carriers says. “We have 600 workers on our site; we have used many to build the water trenches alongside the road. The project has been able to use the resources of the demobilized security operatives and widows in doing a great job in a bid to develop Rwanda. Right now our labour is comprised of 60 percent demobilized soldiers and 40 percent widows and orphaned children.” The creation of jobs, particularly non-farming jobs is critical in transformation of the economy and poverty reduction. However the continued expansion of the working age population by around 170,000 individuals per year as the 2005 National Populating survey suggests that pro-poor measures such as HIMO and expanding coffee employment are currently of an insufficient scale to tackle this underlying problem. Ndagijimana says many of the workers he supervises begin working with no prior experience in construction but they learn skills while at work, “because many come with no experience or skills in any field on top of earning of money. They learn many things from here…widows, orphans. We employ them for six months and after send them back to their communities where they instil their newly learnt skills to the communities where they come from and then hire new ones, as a rule, we do not use any machines here.” In government’s policy to expand the depth of financial services and the monetary economy even the most remote areas of the country, PDL-HIMO workers are not paid their money in cash. They receive half their payments in cash while the balance is banked on accounts that project managers help the casual workers open up as they are registered. “This is done to inculcate a culture of using banking services in the country, Ndagijimana says. He adds, “For example here they earn Frw 1600 per day, we pay them Frw 1000, and the bank saves Frw 600 which they get at the end of the project. For more skilled and experienced labourers, we pay them Frw 3000. They are given Frw 2000 and 1000 is saved and paid at the end of the project. The money that is retained is paid through banks; this way many learn how to save. He says this system has ensured that even banks benefit from PDL-HIMO because they get more customers. The Rwanda Monetary policy states that “access to financial services remains the most daunting task of the central bank—savings and loans—are lower in Rwanda than in the other members of the East African Community. On the savings side, household deposits in commercial banks have increased slowly relative to GDP since the 2000s. Whereas 90 percent of households in industrial countries have savings accounts, and one-fourth of households in other low- and middle-income countries have them, less that a tenth of households in Rwanda use bank services. Banks serve mainly governments, the formal sector, and affluent households. PDL-HIMO ensures that even grass root citizens use banking services. PDL-HIMO is a component of the Common Development Fund-CDF that the government set up in the Ministry of Local government in 203 as one of the schemes through which the goals of decentralisation could be realized. Through CDF citizens at the lowest administrative level are responsible for directing development projects in their area. The central government contributes financial and technical advice. Jean Musabyimana, the CDF Coordinator in Gisagara District says PDL-HIMO has helped his area solve transport problems between his district and Butare, the road constructed by PDL-HIMO labourforce has linked the rural Gisagara to Kigali and therefore access to many socio economic services. Through earnings from PDL projects, “we have encouraged our people to save and form cooperatives which banks can easily fund. We hope other development projects in the country can adopt the same approach so that many more Rwandans can get a source of income. We need to stop the practice of money going into the hands only one contractor.” Musabyimana says, he adds that while employing people the first consideration is given to vulnerable groups like widows, demobilized soldiers etc.” Egide Rugamba CDF acting director says PDL is just a demonstration by the Ministry of Local government as an alternative measure of solving poverty “so that Rwandans can benefit from development projects in the country not only big contractors who repatriate all the profits.” CDF projects have greatly improved socio-economic projects in many areas, Rugamba says the markets have become very essential to the districts where we have built, and as a result, CDF has had economic, political and social impact in such areas. The markets provide employment to many residents of an area and bring in revenue to district administrations through taxes. This was decision making of the population has been enhanced; the districts now build their own capacities after analysing, categorising and prioritising them. As enshrined in Rwanda’s most important working government policy document-Vision 2020, President Paul Kagame’s administration seeks to reduce the high percentage of the population living below the poverty line from 60 percent to 25 percent and increase per capita incomes from 250 USD to 900 USD by the year 2020. As for Jean Claude Ntamabara, his fortunes are brighter. “I had lost hope after retiring from the army; however today, I have acquired a lot of experience as a mason. I have managed to use my retirement package from the army to build my own house and the savings from this job have enabled me start a restaurant in my area where my wife works.” Ends