Rwanda’s unemployment almost doubles due to COVID-19

Rwanda, like many nations around the world, has been deeply impacted by the COVID-19 pandemic. A recent report by the National Institute of Statistics of Rwanda has revealed the staggering effect the virus has had on the country's economy, particularly in terms of employment. The report indicates that unemployment rates in Rwanda nearly doubled within a short span of three months between February and May of this year. The number of individuals who lost their jobs during this period amounted to a significant 1.4 million people, a distressing figure that highlights the severity of the situation. The brunt of this spike in unemployment has been felt most acutely in rural areas and among young people, particularly those aged 21 and under. Specific sectors such as accommodation and services, transportation, and education have been hit hard by the restrictions imposed to curb the spread of the virus. The closure of schools and businesses, coupled with limitations on movement, has contributed to the economic challenges faced by the nation. The private sector, in particular, has borne the brunt of the economic fallout, raising questions about the support and intervention required from the government. In response to the crisis, the government has implemented various strategies, including a recovery fund of $100 million aimed at providing financial assistance to struggling businesses. Efforts are underway to revive key industries such as manufacturing, transportation, mining, and agriculture. Despite these initiatives, the road to recovery remains uncertain as the country grapples with the unprecedented economic impact of the pandemic. In the banking sector, the situation appears equally bleak. The CEO of Bank of Kigali discussed the challenges faced by financial institutions amidst the pandemic, revealing that shareholders' expectations for returns on equity have not been met. With businesses facing closures, disruption in trade, and reduced operations, banks are grappling with low liquidity and decreased consumer savings. The central bank has introduced various measures to support the banking sector, including funding packages and working capital solutions. However, the uptake of these initiatives has been limited, with businesses struggling to meet the stringent eligibility criteria set by the banks. As Rwanda navigates the economic fallout of the pandemic, stakeholders are called upon to collaborate effectively to mitigate the challenges faced by businesses and workers alike. The path to recovery will require sustained effort and collaboration between the government, private sector, and financial institutions to rebuild the economy and restore employment opportunities for the population.