New Business EthiopiaIn an attempt of encouraging domestic saving and encourage investment, Ethiopian government is set to introduce private sector social security scheme.
As of January 2011, all employees in the private sector are obliged to save 5 percent of their salaries while their employers will contribute 11 percent, which will go to provident fund account of the companies.
Prime Minister Meles Zenawi told the parliament this morning (December 2, 2010) that the current government employees’ social security system will also be adjusted to 5 and 11 percent and will be uniform with the private sector social security scheme.
He made the remark in response to the parliamentarians while briefing on the funding sources for the full implementation of his government’s five year Transformation and Growth Plan (TGP).
Meles who commented on the ‘ambitious’ TGP of the country that the House passed today, also indicated that local bank saving interest rate will also be adjusted in order to encourage saving.
Meanwhile he didn’t mention his government’s plan by how much percent to raise the current 5 percent minimum saving interest rate of banks. In addition, he also noted that new local saving schemes such as Residential Hose Construction Saving, Investment Weapons Saving will be introduced soon along with attractive interest rates.
Government saving Bond will also be sold in every part of the country for people who are interested to use the bond as collateral to get loan from any banks in the country, according to Meles.