Manufacturers Push For Creation of Unemployment Fund
Kevin Namunwa  |  Sep 14, 2020

The coronavirus pandemic has rendered over 1.3 million Kenyans jobless as lay-offs have been the way of the land ever since Kenya recorded its first case of the virus.

It is these worrying trends that have pushed manufacturers to propose the creation of an unemployment insurance fund to offer relief to workers who lose jobs to unforeseen crises such as the current coronavirus pandemic.

The Kenya Association of Manufacturers (KAM) has said that such a scheme will see workers who are involuntarily forced out of work continue earning some income for the time they are unemployed or work part-time.

According to KAM, the insurance scheme could be funded jointly by the workers and employers akin to contributions to the National Social Security Fund (NSSF) or fully by the State.

KAM has worked with consultancy firm KPMG to draft a policy toolkit that has been offered to the Treasury and Labour ministry. The policy toolkit comes in the wake of Covid-19, which has triggered job cuts and unpaid leaves to Kenyans.

“[They] should set up an unemployment insurance fund to pay benefits to covered workers who become involuntarily unemployed and meet specified eligibility requirements to cushion them in times of unemployment,” said KAM and KPMG researchers in the document.

The rate of unemployment in Kenya have been rising rapidly ever since the virus came to the country. Kenya imposed coronavirus-induced restrictions which hugely affected the economy.

Data from the Kenya National Bureau of Statistics (KNBS) shows the number of people in employment fell to 15.87 million between April and end of June compared to 17.59 million the previous quarter.