This article was written by Kinyanjui Mungai, Albert van der Linden and Angelos Munezero. The original article was published by Cenfri. You can find the article here.  

Gaining speed: Rwanda’s economic momentum

Vision 2050 is Rwanda’s blueprint for achieving prosperity; the country is aiming for an upper-middle-income status by 2035 and a high-income country status by 2050. The country’s journey from being a low-income nation at USD 1,040 currently to USD 4,036 by 2035 is an ambitious, yet not impossible one. In fact, Rwanda has experienced significant economic growth over the past few decades, with its GDP per capita (in nominal USD) quadrupling since 1999 (when it was USD 242). However, despite major growth in the country’s GDP per capita, adjusting for inflation and Purchasing Power Parity, real economic per capita growth shows a more modest performance, indicating that Rwanda needs to accelerate growth to achieve its mid-term goals.

Shifting gears: Leveraging the workforce

While Rwanda is endowed with natural resources, its workforce should be the engine of its economic growth. Recognising this, Rwanda has made human capital the cornerstone of its National Strategy for Transformation (NST-2). By focusing on decent and productive jobs as well as improving education quality and reducing stunting and malnutrition, Rwanda aims to harness the potential of its workforce to meet its economic goals. The country’s expanding working-age population and labour force size suggest that there is an opportunity to employ more labour to accelerate economic growth. However, challenges like a low skills base and a high reliance on subsistence farming must be overcome. Even with a rising labour force participation rate, from 53% in 2017 to 59% in 2023, approximately 3.2 million of the working-age population currently aren’t participating in the labour market.

Revving up: Upskilling Rwanda’s workforce  

Similar to other developing nations in Africa, low educational attainment drives many to agriculture, a sector offering low productivity. According to the 2023 Labor Force Survey, 57% of time-related underemployment comes from the agricultural sector, which employs 43% of the workforce, highlighting the high inefficiencies. Wholesale and retail trade (13%) and construction (10%) tend to have lower barriers to entry, and act as the key second and third largest sectors for non-agriculture employment. While Rwanda has seen an improvement in expanded access to education, with new schools and more teachers, a large share of the population still lacks the skills needed to transition into higher-paying, more productive roles. To thrive, Rwanda needs to upskill its workforce beyond elementary occupations, such as house helpers, farm labourers and food preparation assistants, many of whom work informally. This doesn’t mean abandoning agriculture, but rather transforming it into a more market-oriented sector through building knowledge and skills needed to manage competitive and profitable farming.

As part of a ‘future Rwanda’ scenario exercise, we calculated that currently, 62% of the workforce is engaged in elementary occupations – too many to achieve the necessary growth. For Rwanda to achieve its mid-term targets, we estimate that 1.7 million Rwandans would need to shift up the skills ladder by 2035 to change the status quo (see graph below). We calculated this by using the skills composition of a sample of upper-middle income economies as the 2035 benchmark, and assumed a consistent employment growth rate based on prior years.  This shift will require support from the government and private sector to strengthen the engine that will drive prosperity.

Understanding elementary occupations

The International Labour Organisation (ILO) developed a system for categorising jobs based on tasks and skills, the International Standard Classification of Occupations (ISCO). This system is used by Rwanda as it is global best practice. The lowest skill occupation group in this system is referred to as “elementary” occupations, which are linked with elementary level skills. Elementary skills refer to tasks that are of a simple and routine nature, mainly entailing the use of hand-held tools, some physical effort, little or no previous experience and understanding of the work and limited initiative or judgment. These tasks include cleaning, restocking supplies, delivering goods, and performing various simple farming, fishing, and hunting tasks, among others. In the labour force survey’s occupational classifications are applied to employed persons and linked to their existing work. In Rwanda, the most prominent elementary occupations in 2023 included labourers in agriculture, forestry and fishery (66%), accounting for 66%, labourers in construction, mining and manufacturing(22%) and refuse workers (15%).

Figure 1: Current and project number of employed individuals by occupation skills level

Source: Cenfri (Authors’ own calculations), 2024. Assumptions:  Employment growth of 2.2% per year (as indicated by Vision 2050). Upper middle-income country composition uses the average proportions for Malaysia, Mauritius, Serbia, Bolivia and Bosnia and Herzegovina and applies these proportions to the projected Rwandan employment base for 2035. High-income country composition uses Singapore’s proportions and applies these proportions to the projected Rwandan employment base for 2050.

Checking the mirrors: NST-2 a critical checkpoint and opportunity to accelerate the skills migration

NST-2 is a vital checkpoint to ensure that the labour force is growing in capability and has the tools to harness economic opportunities for growth. A key focus of NST-2’s skills pillar is Rwanda’s ambitious goal of training 1 million coders and 500,000 individuals in advanced ICT over the next five years. This will position the country to capitalise on the digital economy, which will be critical to accelerating growth. To achieve this, the workforce must progressively shift away from low-skilled elementary occupations towards more productive higher skilled occupations. By aligning the skills composition of the workforce with the economic growth objectives set out in Rwanda’s Vision, Rwanda will accelerate its journey towards prosperity.

To support the Government of Rwanda in further understanding how to implement data-driven policy decisions in sectors like education, Cenfri, funded by the Mastercard Foundation, is in the second phase of the Rwanda Economy Digitalisation Programme. Commissioned by the Government of Rwanda, Cenfri is analysing public and market data held at public institutions to explore questions on how to accelerate socio-economic transformation in the Rwandan economy.

Watch our scenarios video to see more of Rwanda at 2050.