The government is reluctant to review the minimum wage despite increasing demand by workers to cope with high cost of living. Currently, the minimum wage remains Rwf100, which was set in 1973.
There is a concern that despite the dramatic rise in the cost of living in recent years, thousands of casual workers do not have the bargaining power for better pay.
“There is no progress about minimum wage establishment, we are focusing on job creation for the moment to mitigate the unemployment increased by Covid...” Minister for Public Service and Labour, Fanfan Rwanyindo told Rwanda Today.
In 2018, after enactment of the labour law, the government promised that it would shortly follow it up by passing the minimum wage law in a separate ministerial order, but more than five years later it hasn’t been passed.
Biraboneye Africain, the head of CESTRAL, an umbrella body of workers' unions, said lack of minimum wage is a challenge especially for the informal workers are not members of trade unions to fight for their welfare.
A study done by the Institute of Policy and Research, IPAR last year, indicated that the economically vulnerable people said they do not save because they do not have enough money for both subsistence and saving.
The absence of minimum wage has also meant that insurers have to pay Rwf3,000 per day for fatality cases and incapacitating injury for victims without a stipulated salary, asset by the supreme court, which underwriters say has exposed them to losses in motor insurance.
“Any compensation calculation starts with a minimum wage and lack of it has exposed us to untold losses, we also still have issues of doctors who come up with very high invalidity rates” said Alex Bahizi, CEO of BK general insurance.
“In this market, there is no limit to the number of beneficiaries to be compensated like in neighbouring countries like Uganda or Kenya, even if the person had 15 children they all have to be compensated, it even extends to siblings,” he said.
In case of a fatality, depending on how much the person was earning as salary, the next of kin mostly the spouse is given a 100 per cent lump sum of the salary the deceased was to earn until he or she is 65 years.