Unemployment Benefits Coming – Finance Minister

The unemployed in Ghana could be enjoying some benefits, the Finance Minister, Ken Ofori-Atta, has hinted at some new plans.

The unemployment benefits or insurance is simply meant to relieve the socio-economic burdens of those who fit the narrow definition of unemployment, thus, people without any means of livelihood.

The Finance Minister, Ken Ofori Atta, hinted, ahead of the presentation of the mid-year budget review, on PM Express monitored by reportghana.com.

The unemployment benefits, according to the sector minister, has been necessitated by the novel coronavirus pandemic and the economic hardships it has brought on Ghanaians.

“I think there are a number of things that clearly this COVID incident has revealed, l guess to the world and to ourselves. It has a debilitating impact on all our economy, especially the informal market.

“With the informal market in Ghana, 90% in this system are unemployed and therefore what we have to do is to be able to somehow formalise the sector and so we can get relief to people.

“So, we have to look at the unemployment benefits, it’s something we don’t have and that must definitely come at the centre,” he hinted.

Ofori Atta urged the need for Ghanaians to rally around the government to make sacrifices aimed at economic recovery as growth is estimated to slump to 0.9%.

He noted that over the last six months everybody has been involved in one way or the other in sharing the burden, to help cushion others amid the outbreak.

He added that the coronavirus pandemic has in an way created an opportunity to think critically about “where we want to see ourselves, thus, building a digitised system for all the sectors.”

Meanwhile, a report by the International Labour Office on unemployment benefits, in June 2000, revealed that 75% of the 150 million people unemployed around the world lack any unemployment insurance protection.

According to the report, even the world’s richest countries in Europe and North America reduced protection provided by unemployment insurance in the 1990s.

But countries like Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden and Switzerland provide the most generous unemployment protection systems.

The report identifies Australia, Canada, Ireland, Japan, New Zealand, the United Kingdom and the United States as belonging to “medium-level type systems”.

Fewer of the unemployed in these countries receive benefits and the compensation that is provided is lower than those available in the first tier of countries.

Benefit payments, which the report defines as “net wage replacement rates” range from 23% of wages in New Zealand to 58% in Canada and the United States, among these “medium-level” countries.

In contrast, “top-level” countries such as Finland and Spain provide 63% and 77% respectively of national average earnings in their unemployment insurance.

The report indicated that the United States, Canada and the United Kingdom are also rated low because “the duration of unemployment benefit payments is short, with benefits payable for less than 12 months.”

In addition, neither the United States nor Canada has a second layer of unemployment assistance available when the first layer runs out.

When it is narrowed down to Africa, information although scanty has revealed that South Africa and Nigeria appear to be leading the chart.

A survey conducted by the International Social Security Association (ISSA) showed that although more than 90% of the 43 African countries that responded to the survey reported having some form of social security, this was limited to old age, disability and work injury or survivor benefits.

In 12 of the 43 responding African countries, only South Africa, Algeria, Egypt,
Tunisia, Mauritius and to a limited extent, Nigeria and Seychelles, reported providing unemployment insurance benefits.

Such benefits are often:
1. Financed entirely or largely from compulsory employer and employee contributions for defined categories of employees

  1. Limited to a percentage (between 40% and 75%) of the employee’s salary at the time of involuntary disengagement

  2. Limited in duration to a period of between 3 to 6 months and in some rare cases, 1 year depending on special circumstances.

In Ghana, data on unemployment remains a huge task.

You may also like...

You may also like...