BD200m state transfer cuts jobless fund assets by a fifth

TDT | Manama

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Millions shifted from Bahrain’s unemployment insurance fund to the state in 2023 have cut its net assets by about a fifth, but a Shura Council committee says the account remains sound and wants councillors to approve its audited 2023 statements on Sunday.

In a report to the chamber, the Financial and Economic Affairs Committee says total assets in the Unemployment Insurance Account stood at BD614.9 million at the end of 2023, with liabilities of BD151.8m and net assets of about BD463.2m.

The rise in liabilities is mainly linked to the BD200m transfer authorised by Parliament to support programmes aimed at moving Bahrainis into work, of which BD67.67m had been paid by 31 December 2023 and BD133.3m remained due.

The committee notes that core insurance activity continued to generate a surplus, with contributions outstripping benefits by roughly BD54.4m in 2023, compared with about BD51.3m in 2022.

Contributions from the public and private sectors reached BD89m, up 8.3 per cent on the previous year, while payments to unemployed Bahrainis and first-time jobseekers rose by 11.8pc to around BD34.6m.

About 81pc of contributions came from private-sector employers and workers, with the public sector providing the remaining 19pc.

Investment returns strengthened over the year. Net investment income rose from BD434,000 in 2022 to BD22.7m in 2023, driven by higher gains on financial instruments and interest income.

As a result, operating results reached BD75.5m before accounting for the BD200m transfer to the state.

Fall

Once that transfer is recognised, the net change in assets for 2023 becomes a negative BD124.5m, which explains the fall in the fund’s overall position.

Cash movements also shifted. Net cash from operating activities fell from BD68m in 2022 to BD3.9m in 2023, while net cash from investing activities moved from a negative BD118.3m to a positive BD15.7m.

Despite the change in pattern, cash and cash equivalents at year-end climbed to BD35m, more than double the BD15.4m recorded a year earlier.