PM Dr. Ngirente speaks during the press conference to address key economic issues.
Prime Minister Dr. Edouard Ngirente says Rwanda is focused on making transformative decisions that will benefit Rwandans in the long-term, including a recent decision to increase pension contributions from 6 percent to 12 percent beginning in January.
The Head of Government business was speaking during a press conference discussing the current economic status of the country and other key issues as the nation sets the momentum to implement the 2nd National Strategy for Transformation (NST2) over the next five years.
Dr. Ngirente said that Rwanda registered many achievements during the NST1, including transforming the lives of citizens, putting in place the necessary infrastructure and digital systems to improve service delivery, but the country is looking to double efforts under NST2, to achieve upper-middle income status by 2035 and high-income status by 2050.
We expect to see even more achievements over the next five years. We want to see more transformative change, we want to create more jobs for the youth and Rwandans in general, we want to see the lives of Rwandans changing in a tangible manner,” Dr. Ngirente said.
Among other things, Premier Dr. Ngirente clarified that a recent decision to increase pension contributions by workers from 6 percent to 12 percent, was not made by Rwanda Social Security Board (RSSB), as it has been perceived but rather a government decision, approved by cabinet, in line with national ambitions.
Dr. Ngirente said that Rwandans deserve to live long and comfortable lives and it cannot be achieved without saving for the future.
The Prime Minister talked about a wide range of issues concerning the country.
“The decision to increase pension contributions was not made by RSSB. It is a Government of Rwanda decision, approved by the cabinet. RSSB is just the implementing agency,” Dr. Ngirente said.
“It is a deliberate move we made as a government, to help and support Rwandans to save for the future and lead comfortable lives after retiring from service, given the improving life expectancy,” he said.
The social security contribution was previously 6 percent, the employee contributing 3 percent and the employer contributing another 3 percent but starting in January, it will reach 12 percent but will continue to increase to reach 20 percent by 2030.
Prime Minister Dr. Ngirente said that it has become clear that Rwandans now live longer than before, with many able to live for an extra 20 years after retiring.
With the increased savings, the Premier said beneficiaries will be able to earn improved pension benefits after retiring, compared to what they are earning today. Dr. Ngirente said that while the decision sounds burdensome today, the long-term benefits will reach all Rwandans and the economy at large, urging citizens to remain calm and understand the importance of the decision and why the government made the move.
Dr. Ngirente, indicated that life expectancy for Rwandans has increased to 69 years [average], and continues to increase, emphasizing that it is possible that after retirement a person can live for more years than they have worked, which is why they need to save more.
The PM said the decision to increase pension contributions was made by the government.
“If we are happy that a Rwandan will retire and spend the same number of years as they did in the workforce, the what will that person be depending on? The Government looked at this and said, since Rwandans now live a long life, they should not do so in poverty. We believe that they should live a long but comfortable life and they can only do so if they save,” he said.
He emphasized that people should consider the fact that this is their money the government is helping them to save and they will get it back when they need it, urging workers to consider it a sacrifice they have to make.
The Prime Minister said that measures have been taken to ensure that a person who retires can continue to live a life that is no less than the one he or she lived when he or she was still able to work.
“We know that for it to work, there must be sacrifices. Rwandans will sacrifice and contribute but live a better life when they retire than they do today,” he said, adding that the government will also work with the Private Sector to increase the number of people who save with the pension scheme.
Only 9 percent of the workers in Rwanda are registered with RSSB. Dr. Ngirente said the government will make sure it fills the gaps during the transition, including supporting private entities to join the pension scheme and formalise their employees.
He however said that there has to be transparency, where employers declare their operations, including losses, for the government to accompany them until they become stable and be members of the pension scheme.
Senior ministers were in attendance.
He urged citizens to be patient and wait for the benefits that will come with the initiative which has drawn debates in the media and attracted a social media storm. Dr. Ngirente said currently retirees are not getting enough pension benefits due to the limited savings.
Dr. Ngirente said that people need to understand that some of the decisions the government takes are for the benefit of the people, rather than considering them a burden, emphasizing that most times such decisions will require people to sacrifice but the results are always quick to come.
Prime Minister Dr. Ngirente spoke about a wide range of issues, including what the government is doing to incentivize agriculture productivity, trade and regional dynamics. The Premier said that while Rwanda wants to pursue and maintain relations with neighbours, it cannot force good relations or put her own security interests at stake.
Dr. Ngirente pointed out that the people of countries in the region like Burundi and DRC have no problem with Rwanda, but leaders and decision makers have their own issues. “Our job is to focus on things that improve the lives of our people.”
