The Promise of EJO HEZA: A Brighter Future for All Rwandans

The Promise of EJO HEZA: A Brighter Future for All Rwandans

A Publication of World Bank (WB) Group

Timeframe: March 2022 - June 2022

INTRODUCTION

The low pension coverage within the informal sector/self-employed/part-time workers has motivated countries across Africa, Asia, and Latin America to operationalize voluntary schemes. The voluntary schemes globally differ in design, incentives, who they target, and withdrawal rules, but the objective for all is to offer a scheme that meets the needs of those traditionally excluded from formal sector schemes. Among such schemes, Rwanda’s Ejo Heza Long-Term Saving Scheme has emerged as a success story globally given its rapid coverage growth. Introduced in 2018 under Law N° 29/2017, Ejo Heza was designed as a voluntary defined contribution scheme with short-term withdrawals under specific contribution levels and targeted incentives to cater to the characteristics of informal sector workers. Administered by the Rwanda Social Security Board (RSSB), the Ejo Heza savings scheme has registered a remarkable increase in coverage since its implementation in 2019.

This study is the result of a two-year engagement between the World Bank team and RSSB. It aims to overview the Ejo Heza scheme, highlight its key strengths, and provide recommendations to improve coverage, adequacy, operational efficiency, and long-run viability.

Methodology

For this purpose, a rich set of qualitative and quantitative information collected during the engagement has been analyzed and compiled. The engagement included meetings with Ejo Heza core teams; interviews with stakeholders and partners of Ejo Heza; an assessment of Ejo Heza’s operational processes using the social insurance adapted delivery chain framework; field visits in 2021; use of the World Banks’s Scheme Viability Assessment Tool (SVAT) to assess Ejo Heza’s viability under multiple scenarios; and most recently, a phone survey of 386 subscribers of Ejo Heza. The target audience for this report includes policymakers at RSSB looking for scheme design and delivery system recommendations to improve the desirability and efficiency of Ejo Heza and global audiences, who would like to learn lessons from Ejo Heza and understand the potential reasons behind its success. Researchers and practitioners studying voluntary schemes can also benefit from the frameworks, methods, and tools used for analysis in this report.

Consultant World Bank: Dr Fareeha Armughan, for the survey instrument design of Ejo-Heza