COVID-19: The Impact of COVID-19 on Banking Services, Commercial Contracts and Employment

INTRODUCTION
The World Health Organization declared COVID-19 a pandemic on March 11, 2020, causing huge impact on people’s lives, families and communities. In addition to the serious implications for people’s health and the healthcare services, Coronavirus (COVID-19) is having a significant impact on businesses, financial services, employment and the economy.
The disruption and implications of COVID-19 are already imminent in the society and economy. Rapidly changing social norms, restrictions on transportation, slowdown in the level of economic activity, possible disruptions in the supply chain, high degrees of volatility in the markets and shock in the market sentiment constitute some of the preliminary challenges to deal with.

Responses from governments and regulators are intense but as the outbreak prompts high social and financial stakes with unknown outcomes at this moment, substantial adjustments and policy actions should still be expected in order to mitigate the impact of the disease in the global and domestic economies. As a way of mitigating the impact of Covid-19 on the economy, several countries across Europe, Asia and Africa are gradually easing their Coronavirus lockdowns to allow resumption of certain key business activities.

In Rwanda, the government on 30th April, 2020 announced a partial lifting of the lockdown allowing the re-opening of certain services while maintaining closure of other services with effect from 4th May, 2020 with a review period of 15 days upon health assessment. The government further allowed public and private businesses to resume with essential staff not exceeding 50% of all employees and directed employers to provide masks for all employees while at work.

In this article, our legal team has collaborated to critically evaluate the impact the Coronavirus pandemic has had on the banking services, commercial contracts, employment and education sector.

I. Banking Services:

Though banks are not being hit by the novel Coronavirus as directly as other retail institutions and businesses, they are at the forefront of public attention.

Banks sit at the heart of the economy and provide funding to corporate entities and individuals and thus their stability is crucial to keep the system up and running.

Worldwide, tens of thousands of consumers are now being placed under quarantine or lockdown and as a result, they might lose their ability to pay for credit facilities and particularly mortgages.

Also, business loans, especially to small and medium enterprises, are at risk due to the forced shutdown. But entire industries such as travel will be hard hit, as they will have no way to make up for the lost revenues in the future.

Other industries, such as manufacturing and retail, will suffer now but may see increased activity once things go back to normal.

1. Government intervention and central bank response

In April, governments world over introduced aid programs commonly known as ‘stimulus packages’ to ease the economic pressure brought about by the  COVID-19 outbreak and the inevitable economic downturn that will follow.

However, the stimulus packages being extended by governments bridge only a limited and unknown period and thus governments are making a risky call given that if the pandemic triggers a full-blown recession causing widespread defaults, mass unemployment and severe loss of life, the relief and stimulus funds could fail to revitalize the economy and even larger amounts will be needed.

This could pave the way for the next sovereign debt crisis given the prevalence of debt-financed government responses in most of the countries.

Highlighted below are examples of some of the interventions recently announced by governments and respective responses by the central banks in a bid to ease the economic pressure brought about by the COVID-19 pandemic:

a. Rwanda

The Central Bank of Rwanda has come out with various interventions aimed at not only combating the spread of the COVID- 19 but also reduce the effect on business. It is therefore, worthwhile to look into these interventions and outline the impact on business and borrowers.

                                                I. Extension of Lending Facility : To facilitate the private sector borrowers, a fund worth RWF 50 Billion has been earmarked to bridge liquidity challenges and commercial banks can access this facility at the central bank rate. The stimulus whose beneficiaries include individuals, SMEs and large corporate entities regardless of their sector of operation is meant to relax measures on loans and giving clients some room to breathe, given that the crisis does not go beyond six (6) months.

                                                 II. Lowering Reserve Ratio : The Central Bank has lowered the requirement ratio from 5% to 4.5% and this measure took effect on April 1.  This will allow banks more liquidity to support affected businesses. Normally, the central bank maintains a range of liquidity facilities such as intra-day liquidity facility, overnight lending facility, and reverse repo for seven days and refinancing facility for seven days which ensures that banks can lend. Lowering the reserve ratio will therefore increase
liquidity by up to RWF 26 Billion, effectively increasing funds available for lending to the economy.

                                                    III. Restructuring Loans : The Central Bank anticipated that customers with huge loans would face challenges in servicing those loans thus creating liquidity problems to the banks. This is why banks are allowed to engage their customers and re-negotiate terms especially to those with outstanding loans facing temporary cash flow challenges arising from the pandemic. In line with this measure, Rwanda’s biggest bank, Bank of Kigali has introduced “Turikumwe Special Loan”, a special loan product which is aimed at easing the pressure on clients as the country continues to battle with the Coronavirus pandemic. This loan facility will allow customers to digitally apply for a short-term loan of up to two times their salary with a maximum of Rwf 10,000,000 repaid over a period of 12 months at an Interest rate of 15.5% per annum, allowing a 60% maximum of all loans repayments. Turikumwe Special Loan is open for BK customers with existing loans and first time loan takers with Bank of Kigali.

                                                IV. Review of Treasury Bonds : For the next six months, BNR has offered to buy back bonds at the prevailing market rate. The regulator also reduced the waiting period if one fails to sell the bond at the secondary market from the current 30 days to 15 days. The implication is that money will flow from the Central Bank to individual banks thus leading to increased borrowing and implying there will be increased money circulation in the economy for the producers and consumers to use.

                                               v. Charges on electronic money transactions were also waived for a period of three months with effect
from March 19, 2020.

                                               vi. Tax relief measures including the suspension of down payments on outstanding tax for amicable settlement and the softening of enforcement for tax arrears collection have also been implemented.

b. East Africa

Other member states in the East African Community have also implemented similar measures aimed at preventing the Covid- 19 health crisis from becoming a severe economic and financial crisis as highlighted by institutions such as the International Monetary Fund (IMF) and the East African Business Council (EABC).

In Kenya, the government has earmarked Ksh 40 Billion (0.4 percent of GDP) in funds for additional health expenditure, including enhanced surveillance, laboratory services, isolation units, equipment, supplies, and communication; social protection and cash transfers; food relief; and funds for expediting payments of existing obligations to maintain cash flow for businesses during the crisis. On March 24, the central bank of Kenya (i) lowered its policy rate from 8.25 to 7.25 percent; (ii) lowered banks’ cash reserve ratio by from 5.25 to 4.25 percent; (iii) increased the maximum tenor of repurchase agreements from 28 to 91 days; and (iv) announced flexibility to banks regarding loan classification and provisioning for loans that were performing on March 2, 2020, but were restructured due to the pandemic. The central bank has also encouraged banks to extend flexibility to borrowers’ loan terms based on pandemic-related circumstances and encouraged the waiving or reducing of charges on mobile money transactions to
minimize the use of cash.

In Uganda, Bank of Uganda has reduced the central bank rate and put in place measures to support the financial and the private sector. Bank of Uganda (BoU) issued a statement on March 20 listing the following measures: (i) BoU’s commitment to provide exceptional liquidity assistance for a period of up to one year to financial institutions that might need it; (ii) ensuring that the contingency plans of the supervised financial institutions guarantee the safety of customers and staff; (iii) putting in place a
mechanism to minimize the likelihood of sound business going into insolvency due to lack of credit; (iv) waiving limitations on restructuring of credit facilities at financial institutions that may be at risk of going into distress.

In Tanzania, the Bank of Tanzania conducted a consultative session with bankers through Tanzania Bankers Association where it encouraged cashless transactions and other alternative payment channels. Further to this, the bank is set to declare interventions that will promote the stability of Tanzania’s economy amid this pandemic.

c. International Jurisdictions

European governments have been introducing aid programs to ease the economic pressure brought about by the COVID-19 outbreak and the inevitable economic downturn that will follow.

The size of those programs is astronomic whereby the German government plans an €822 Billion economic aid package amounting to 26% of the annual German GDP and says it will make more available if needed.

The UK Treasury introduced a £330 Billion package which constitutes 15% of the annual GDP of UK.

The Czech Republic also plans to guarantee loans to business to the tune of 19% of GDP. The Czech government announced a fiscal package of CZK 100bn (€3.7bn, 2 percent of GDP). While details are being determined, the measures include income support of 60 percent of gross wages of employees sent into quarantine and 80 percent (if the employer continues paying 100 percent of employee’s salary) of employees of businesses, that had to close due to containment-related government restrictions.

Outside Europe, the USA has put in place an estimated USD 2.3 Trillion (around 11% of GDP) Coronavirus Aid, Relief and Economy Security Act (“CARES Act”). The Act includes (i) USD 250 billion to provide one-time tax rebates to individuals; (ii) USD 250 billion to expand unemployment benefits; (iii) USD 24 billion to provide a food safety net for the most vulnerable; (iv) USD 510 billion to prevent corporate bankruptcy by providing loans, guarantees, and backstopping Federal Reserve 13 (3) program; (v) USD 359 billion in forgivable Small Business Administration loans and guarantees to help small businesses that retain workers; (vi) USD 100 billion for hospitals, (vii) USD 150 billion in transfers to state and local governments and (viii) USD 49.9 billion for international assistance.

Although banks have already started waiving fees, increasing credit card limits, and granting mortgage payment holidays and access to fixed saving accounts to those impacted by the virus, there should however be a measure of precaution in case the COVID-19 crisis lasts longer than one or two months as this option will increasingly become untenable.

For example, interest rate payments are essential income for banks. Without it, banks will see liquidity shortages themselves, at a time where the cost of loans is going up due to the lack of liquidity in the interbank market.

II. Commercial contracts

The myriad and rapidly evolving impacts of COVID-19 are being felt throughout the globe, and have been since it first emerged in China at the end of 2019. As we take measures to protect against the public health issues that Coronavirus poses, its outbreak has already led to significant economic disruption in the healthcare system, employment, politics and the economy.

From a commercial point of view, contractual commitments are being scrutinized and ‘force majeure’ is becoming a hot topic for obligations relating to tenancy and lease agreements, supply contracts as well as mergers and acquisition contracts etc.

1. The meaning of force majeure

Force majeure is a legal concept derived from French law and means ‘superior force.’ It is a common clause found in commercial contracts which:

                                  i. excuses parties to a contract from performing their obligations under the contract; and/or

                                   ii. allows a party to suspend their obligations under the contract, due to unforeseen difficulties out of their control or foreseen problems that are likely to occur, but the nature or extent cannot be foreseen.

Natural disasters, wars, riots, revolutions, explosions, lockdown strikes, and government actions are some of the unforeseen circumstances that can be classified as force majeure events.

Force majeure clauses are often included in contracts to excuse performance or absolve a party from liability due to the occurrence of certain events that are beyond the parties’ control. Courts generally interpret these clauses very narrowly so whether a party can actually rely on the clause to excuse performance and escape liability will be a question requiring a detailed and fact-specific legal analysis.

The first step of analysis is to determine whether a force majeure clause has been incorporated into in your contract. As it is commonly drafted, the force majeure clause begins with a definition of what types of events constitute force majeure. A short form clause may have a broad catch-all of “events beyond the reasonable control of a party”. However, there is a possibility that these catch-all clauses may be deemed void by the courts due to uncertainty. In contrast, a long form clause may specifically list the events such as “epidemic”, “pandemic”, “disease outbreak”, and “government action”.

Depending on the specific language used, some force majeure clauses require the force majeure event to render contractual performance legally or physically impossible before it may be relied upon. Other clauses set a lower threshold only require performance to become substantially more onerous before the non-performance may be excused.

Additionally, a force majeure clause may require the non- performing party to notify the other party within a certain time period and to mitigate the impact of its non-performance. In certain sectors such as information technology, it is also common to see an obligation on the suppliers to have a disaster recovery or business continuity plan in place so that the service deliveries are not interrupted by the adverse event.

For the party at the receiving end of a force majeure notice, there may be a right to terminate the contract if the non-performance continues for a certain length of time.

The one question however that remains to be addressed in the current situation where numerous commercial businesses are suspending their contractual obligations relating to rent payment citing COVID-19 and the resulting government directives of nationwide lockdown, is whether the pandemic qualifies as a force majeure or unforeseen event that warrants contract suspension and exemption of affected parties from performing their contractual obligations.

2. Does COVID-19 qualify as a force majeure event?

It is not a certainty that the outbreak of COVID-19, or the resulting government restrictions, will be regarded as a force majeure. This is still very much up for debate and thus consideration has to be made on a case-by-case basis. Whilst recent past has seen many epidemics in the form of various flu outbreaks (SARS, H1N1, Ebola, Zika, etc.) which have not been defined as such, few would dispute the fact that Coronavirus has triggered panic, lockdowns and disruption on a scale incomparable to its predecessors
notwithstanding the fact that it has been declared by the WHO as a global health emergency, and with its description as a pandemic, the courts may be likely to judge this event as “unforeseeable” and thus qualifying as force majeure.

a. Force Majeure under Rwandan law

The Rwandan contract law (Law N° 45/2011 of 25/11/2011 Governing Contracts) clearly provides for extinguishing of contractual obligations due to events of force majeure and other reasons beyond the party’s control in its Article 92. To wit, this provision states that:

Where a party’s performance is made impossible for reasons beyond her/his control including the absence of the object matter of the contract or another case of force majeure, his or her obligation of performance will be extinguished, unless the circumstances indicate otherwise.”

Based on the provisions of Article 92 of the Rwandan contract law, it therefore suffices to say that in Rwanda, parties that seek to suspend their contractual obligations due to the effects of the COVID-19 pandemic can rightly do so by invoking the pandemic as a force majeure event that led to impossibility of performance.

The provisions in the Rwandan contract law on what constitutes force majeure are further supported by the jurisprudence laid down by the Rwandan Supreme Court in the leading case of Rumanyika Jean Marie Vianney & Rusekampunzi Rumanyika Agathe -v- Ruzindana Egide [RCOMA 0017/10/CS, 2011] where the court outlined the elements that constitute an event of force majeure as being unforeseeability, unavoidability and irresistibility.

From the above analysis, the COVID-19 pandemic coupled with the various measures that have been imposed by the government such as nationwide lockdown and travel restrictions can be considered as unforeseen events in accordance with the Rwanda contract law and thus warranting contract suspension and exemption of affected parties from performing their contractual obligations.

b. Absence of force majeure clause in contracts and the common law doctrine of frustration

There are numerous cases where parties to contractual undertakings whether short-term or long-term conclude contracts which do not include force majeure protection, or they simply have oral contracts and there comes a situation where they are unable to fulfill their contractual obligations because of the COVID- 19 outbreak. In these kinds of situations, the English law doctrine of frustration may be invoked by such parties in order to ensure that they are protected from the unwarranted liability caused by the
Coronavirus pandemic.

Where a party cannot fulfill its contractual obligations because of the Coronavirus outbreak, in the absence of a force majeure provision, the contract is said to be frustrated i.e. it cannot operate. This can deliver a similar outcome to the force majeure clause.
The common law doctrine of frustration operates in the sense that the parties to the contract are relieved of their obligations due to a subsequent event which is not a fault of their own and which has made the contract radically different or impossible to perform under the terms that were originally agreed by both parties at the time of entering into the contract.

It is also important to note that the doctrine of frustration terminates the contract in its entirety i.e. it cannot be re-activated. In contrast, under a force majeure clause, the relevant obligations are suspended for the duration of the unforeseen event.

c. Measures to be undertaken in the wake of COVID-19 vis-à-vis force majeure

Given the current uncertainty and global reach of the Coronavirus outbreak, the following measures should be taken by corporate entities as well as individual contracting parties to ensure that they protect themselves from similar future uncertainties that may occur:
• A review of all contracts connected to any of the industries or countries affected by the Coronavirus should be undertaken to ensure that the contract includes a clause.

                • Ensure a detailed evaluation of the force majeure clause is undertaken.

               • Incorporation of a force majeure clause in all future contracts.

              • Adherence to any notification requirements or obligations under the contract is very important.

             • Assess what measures, if any, can be undertaken to mitigate the effects of the event.

III. Employment

1. Working from home and its legal implications to the employer

Legal premise of work from home arrangements

To avoid the complete shutdown of business, employers may consider an arrangement that allows employees to work from home or remotely, a measure already taken by many employers in Rwanda. It should however be noted that the Law n° 66/2018 of 30/08/2018 Regulating Labour in Rwanda (the “Labour Code”) is silent on working from a place other than the place of engagement.

This general proposition however, does not take away the contractual nature that underlies contractual relationships. As such, whereas there is no explicit right to work from home, it is within the scope of terms that an employer and employee can agree upon to enable continued productivity during the existence of this unfortunate pandemic.

In order to comply with the labour law, the decision to implement the work from home policy therefore entails observing the following measures:

                                       i) That it is considered as a temporary and extraordinary measure which will have to be reversed at the end of the COVID-19 pandemic;

                                      ii) It must comply with the existing labour laws and any collective bargaining agreements in cases of employees in trade unions;

                                   iii) The measure should not infringe on the labour rights of employees such as salary, working hours, annual and sick leaves, weekly rests among others;

                                iv) In the event that technological means are required, this should not entail a cost on the employees.

                                                        

2. Implication of work from home arrangements on Employees, Employers and Customers/Clients

The policy of working from home certainly raises numerous questions relating to data privacy, confidentiality and cyber security. More directly, most employment contracts are drafted with a clause on confidentiality and it’s important that such clauses be emphasized to employees as they are being given a leeway to work away from their usual workplaces. It may also be necessary to notify or seek the permission of clients whose work is being done outside the business premises where they anticipated that it would be done, about the necessity of the change.

To this end, employers should provide employees with secure internet connections and to instruct them to avoid making such connections publicly accessible. This measure is for purposes of mitigating cyber security breaches which would endanger data customarily secured using the internal technical infrastructure available to the employees at the workplace. Where it is practicable, the employers should provide secure devices to those employees working from their homes in order to avoid any risks that
allowing employee’s use their own devices bring about.

Key to note is the fact that an employee who is working from home is not considered to have taken leave. The employer’s obligation to pay wages or salary therefore continues to subsist under this arrangement.

                        . Accrued but unconsumed leave: Employers may require employees to take their accrued leave in order to prevent the eventuality of employees taking leave shortly after they have been required to stay at home. This alternative is in line with Article 47 of the Rwandan labour code which requires employees to take leave in accordance with the annual leave schedule. It should however be noted that in terms of Article 47 of the labour code “the annual leave schedule approved by the employer cannot be postponed or brought forward by the employer for more than a three-month period, unless it is so agreed between the employee and employer.” This implies that unless agreed by the concerned employee, the employer cannot require such an employee to take leave if such leave was scheduled in a period exceeding three months ahead.

.Unpaid leave: The Covid-19 pandemic is most likely to render the continuation of employment either difficult or impossible and continued payment of employees may be economically

untenable where there is no work being delivered. Where the employees have exhausted their annual leave, they may be required to take unpaid leave. Although this kind of leave is not expressly provided for under the labour code, it can be achieved through a consensual arrangement between the employer and the employee depending on the circumstances as long as the employee expressly agrees to it. The advantage with this option is that there is job security and the employee’s continuity of employment is more or less guaranteed.

                •Temporary layoffs: Employers can consider temporary layoff of staff or suspension of employment contracts if they cannot maintain them during this period. This arrangement should pass the litmus test under Article 18 Para 3 (4°) of the labour code. For employees who belong to trade unions, employers should also ensure that they are following the requirements of collective bargaining agreements. For employees not organized under a trade union, employers should consider the employment contract and Human Resources Policies in place if any since there is potential risk that a temporary layoff of employees not organized under a trade union may amount to constructive dismissal in the absence of an express or implied contractual term or consent.

                • Internal restructuring or collective dismissal: To the extent that employers suffer economic difficulties during the Covid-19 outbreak, they may be permitted to terminate their employees in accordance with Article 21 of the labour code. This provision permits employers during times of economic hardships or technological transfer to carry out individual or collective dismissal of employees “with the aim of preserving the enterprise’s competitiveness” and for this purpose the competent labour inspector of the area where the enterprise is located must be informed in writing. This option should however be considered as a last resort alternative given the modalities involved in the selection of the particular employee to be terminated, notice requirements, the obligation to pay accrued salary arrears and any other contractual employment benefits which they may be entitled to.

It should however be noted that exercising this option may ultimately give rise to litigation given the above mentioned modalities and thus this makes it the least advisable option considering the financial implications involved in restructuring and the possibility of unlawful dismissal claims. However, should this option be considered, it is advisable that legal advice should be sought before embarking on its execution.

       •Paid sick leave: Where for any reason an employee has been diagnosed with Covid-19 or another sickness and has to go into self-isolation, there are a number of options for the employer to consider. First and foremost if the reason for the employee not being able to come for work is because they were already infected with the disease, they are entitled to take a short-term or long-term sick leave which is paid by the employer in accordance with the provisions of Articles 54 and 55 of the labour code. However, if the sickness persists for more than six months, the employer is entitled to terminate the employment contract in accordance with the provisions of the labour code. However the termination comes with terminal benefits like payment in lieu of notice, payment for accrued leave, payment of any accrued salary and any other applicable statutory and contractual employee benefits.

             •The possibility of enforcing force majeure: There may be a force majeure argument for the temporary suspension of employment contracts in accordance with Article 18 Para 3 (6°) of theMlabour code due to the lockdown of workplaces by government occasioning suspension of the  enterprise’s activities or in the event that the employer is left without a workforce due to a massive and simultaneous wave of infection to the employees. Considering the various measures that have been taken by various countries including Rwanda, the Coronavirus pandemic may be validly invoked as a force majeure event but this will have to be considered on a case-by-case basis and employers cannot assume that force majeure will automatically apply.

IV. Education

Most governments around the world have temporarily closed educational institutions in an attempt to
contain the spread of the COVID-19 pandemic.

According to UNESCO, these nationwide closures are impacting over 72% of the world’s student population. Several other countries have implemented localized closures impacting millions of additional learners.

The pandemic is expected to have enormous economic consequences and it is also having a devastating impact on global education. According to the latest figures released by UNESCO, some 1.3 billion learners around the world were not able to attend school or university as of March 23, 2020 when global lockdown was imposed.

UNESCO’s figures refer to learners enrolled at pre-primary, primary, lower-secondary, and upper-secondary levels of education as well as at tertiary level. 1,379,344,914 students or 80% of the world’s learners are now being kept out of educational institutions by country-wide closures.

However during the pandemic and closure of schools and learning institutions, UNESCO is supporting countries in their efforts to mitigate the immediate impact of school closures, particularly for more vulnerable and disadvantaged communities, and to facilitate the continuity of education for all through remote learning.

Impact and strategies for the education sector in Rwanda

In Rwanda, the government on 30th April, 2020 announced a partial lifting of the lockdown allowing the re-opening of certain services while maintaining closure of other services. However, education was among the services that remained closed and all schools and higher institutions of learning were suspended until September 2020.

The suspension of schooling activities across the country has a big implication on the education sector and it is evident that teacher employment and salaries are going to be gravely affected as well as the teaching and assessment methodologies. The structure of schooling and learning, including teaching and assessment methodologies, was the first to be affected by the school closures. This is due to the fact that most private and public schools don’t have the facilities to enable continuous online teaching methods and thus such schools have completely shut down for not having access to e-learning solutions and this implies that teachers are going to be temporarily out of employment with no salary to sustain them and their dependants.

Another big implication caused by suspension of schools is the loss of money paid by parents as tuition fees for the first term during which schooling activities were suspended as a result of the outbreak of the Coronavirus pandemic as the government further announced that there will be no refund of first term school fees.

The pandemic has also significantly disrupted the higher education sector as well, which is a critical determinant of a country’s economic future. This is owing to the fact that a relative number of Rwandan students enroll in universities abroad, especially in countries worst affected by the pandemic. Many such students have now been barred from leaving these countries and if the situation persists, in the long run, a decline in the demand for international higher education is expected.

Needless to say, the pandemic has transformed the centuries-old, chalk–talk teaching model to one driven by technology. This disruption in the delivery of education is pushing policymakers to figure out how to drive engagement at scale while ensuring inclusive e-learning solutions and tackling the digital divide. A multi-prolonged strategy is necessary to manage the crisis and build a resilient education system in the long term.

Government strategies for continuity of learning, teacher support and private school support

Following the announcement to suspend school activities, the Rwandan government has come up with several strategies that will ensure the continuity of learning for students as well as financial facilitation for teachers who are going to be temporarily unemployed and private schools which will not be in position to sustain their workforce due to dependence on tuition fees to run their institutions.

The strategies being put in place by the government include:

                                •E-learning platforms: Through e-learning platforms, students can access select e-learning platforms at no cost. Radio and TV will continue to broadcast lessons on a schedule shared regularly by the ministry of education (MINEDUC) and on radio. In addition, a USSD-based quiz on different subjects is available on *134#. The government and ministry of education have advised all students to actively follow these alternative platforms until schools reopen.

                                •Extension of loan facilities to teachers: The government announced that for the period school activities will be suspended, teachers will receive financial facilitation from their respective saving schemes. Through this strategy, teachers who are members of the Umwalimu SACCO can get new loan facilities or restructure existing loans according to the terms and conditions set by the cooperative.

                             •Extension of relief packages to private schools: The Rwanda government announced that inline with its economic recovery plan, private schools will be considered as businesses. This means they can apply for appropriate relief packages including financial aid. Private schools are therefore encouraged to use the facility to ensure they respond to the basic needs of their teachers.

CONCLUSION

COVID-19 continues to spread across the world with a trajectory difficult to predict. Therefore the health, humanitarian and socio-economic policies being implemented by various governments will determine how quickly and strongly economies recover.
It is evident that while the health care management aspects of Covid-19, including social distancing, avoiding facial contact, washing or sanitizing hands frequently, screening and quarantining those exposed to the patients and lockdowns are important, it is essential to address the social protection, monetary and fiscal aspects of Covid-19 management. To this end, we have seen the introduction of stimulus measures by various governments globally to mitigate the impact of Covid-19 on the economy. These measures include tax reliefs as implemented in countries like Rwanda, Kenya and South Africa, financial support for businesses and the poor and vulnerable members of society, direct food relief, loan relief and job protection.

However, lack of fiscal space and borrowing constraints in many emerging markets and developing economies requires a careful balance i.e. shifting expenditure toward the health sector while safeguarding social protection spending and vital public services such as transport, energy, communications, water, sanitation and security.

Funding should also be made available for strong active labor market policies to accompany these sectoral policies. They can ensure that the necessary investments in workers’ skills are made to facilitate relocation or re-employment; they can also offer job-search assistance and intermediation support for workers and employers to ensure rapid recruitment of workers in expanding sectors during the pandemic (eg. health, food and beverages), as well as support the relocation of workers to expanding production units in companies.

The content of this Article is intended to provide a general guide on the subject matter. Specialized legal advice should be sought about your specific circumstances and legal issues.

Jean Claude MUTABAZI ABAYO
Managing Partner
Abayo & Co. Advocates 
Mobile Phone : +250 788 300 075
Email : claude@abayo.law