This archive report was first published on 16 July 2021.
The Kenyan government has launched a new unemployment insurance fund to support workers who lose their jobs or are unable to work due to illness. The fund, which aims to generate at least Ksh45 billion annually, will provide a monthly stipend to laid-off workers for six months.
According to Labour Principal Secretary Peter Tum, the fund is part of the post-Covid recovery blueprint to ease the pain of loss of income and spur demand for firms' goods and services. The State targets implementing the fund within the next financial year starting July 2022.
Employees will contribute one percent of their pay, which will be matched by employers, towards the fund. The monthly stipend will be offered for six months, during which time workers are expected to actively seek employment and re-skill themselves.
The unemployment fund mirrors that of South Africa, which has so far disbursed huge amounts of money to support millions of workers and businesses affected by the Covid-19 pandemic. The South African scheme, established in 2002, also involves employees contributing one percent of their pay, which is matched by employers.
The Federation of Kenya Employers (FKE) wants the proposed fund to also cushion cash-strapped firms to enable them to keep workers on the payroll during unforeseen crises until the economy stabilises.
