About the National Unemployment Insurance Scheme
Background
The outbreak of COVID-19 pandemic in 2020 devastated economies around the world. Several thousands of lives have been lost to the pandemic. Livelihoods have been severely impacted and unprecedented levels of unemployment and joblessness recorded. While Ghana largely avoided serious health ramifications, to date, there are still unique set of socioeconomic challenges to overcome.
Though higher than the world average of -3.1 percent and SSA average of -1.7 percent, economic growth for Ghana in 2020 was 0.4 percent, the lowest growth since 1983. The Covid-19 Business Tracker Survey conducted by the Ghana Statistical Service (GSS) in June 2020 (First round) showed that more than a third (35.7%) of businesses closed down during the partial lockdown in March/April, 16 percent remained closed after the lifting of the lockdown and more than 41,000 workers lost their jobs during the partial lockdown of Accra and Kumasi.
The first round of the Covid-19 Business Tracker Survey also indicated that 65.4 percent of institutions in the education sector closed down during the lockdown and several schools remained closed even after the lockdown was lifted. Similarly, the Ghana Tourism Authority (GTA) had estimated that at the end of April 2020, 23 percent of workers in the hospitality industry had lost their jobs with a quarter of this estimate (25%) emanating from the restaurants and hotels sub-sector.
Since the first round of the Business Tracker Survey conducted in June 2020, two more surveys have been conducted in September 2020 and in September 2021. Though the results from the two surveys showed reduced impact of the pandemic on business closures and employment, private sector education and tourism and hospitality were still heavily impacted by the pandemic.
Government announced in the 2020 Mid-Year Fiscal Policy Review the establishment of a National Unemployment Insurance Scheme (NUIS) to serve as a mitigating measure for unexpected future events that may disrupt employment such as the Covid-19 pandemic. Government reiterated the implementation of this programme in the 2021 Budget Statement and Economic Policy, 2021 Mid-Year Fiscal Policy Review and 2022 Budget Statement and Economic Policy. A key component of the scheme is a systematic training/retraining of the unemployed from such shocks to enable them regain employment in the shortest possible time. The NUIS and the Training/Retraining Programme is an initiative under the Ghana CARES ‘Obaatan Pa’ programme, which is government’s blueprint for post COVID-19 recovery and transformation.
The National Unemployment Insurance Scheme (NUIS)
The NUIS which is currently in the design phase is a social insurance scheme. It is conceived primarily as a contributory scheme with defined benefit for the sole purpose of providing income support and re-employment services to workers who involuntarily become unemployed due to unexpected future events and meet specified eligibility criteria.
A key part of the scheme will be systematic training and retraining of eligible workers under the NUIS who have suffered job loses to improve their skills or acquire new skills to increase their chances of securing a new job in the shortest possible time. It will feature other active labour market programmes including job search assistance.