Investing in skills development across key sectors of the economy is crucial to accelerating the growth of Rwanda’s private sector and achieving the country’s economic targets, as outlined in Vision 2050.
Rwanda has made noteworthy progress in education; however, more needs to be done to ensure the skill levels in its workforce match labor-market demands and the country’s development goals. This is according to the 23rd edition of the Rwanda Economic Update (REU), titled "Accelerating Skills Development to Foster Private Sector Growth."
In key sectors such as agriculture and industry, most workers have only attained basic education. In agriculture, for instance, 98% of the workforce has not completed primary school, limiting their opportunities for decent jobs and hindering the sector's growth.
Rwanda's Vision 2050, which aims to transform the country into a high-income nation, emphasizes the need for a well-skilled workforce to drive a knowledge-based economy. However, one of the major challenges is the mismatch between the education system’s outputs and labor market demands, with students pursuing degrees that do not align with job market needs.
To address this challenge, stronger collaboration with the private sector is essential. Through active participation in designing academic curricula and offering internships, the private sector can help ensure that skills taught in schools align with job market demands.
The World Bank is working closely with the Government of Rwanda to strengthen skills development initiatives and earlier this month approved $200 million for the Priority Skills for Growth and Youth Empowerment (PSGYE) Project. This project aims to provide 200,000 vulnerable youth, particularly those who are not in education, employment or training, with market-demanded skills. The project also aims to improve technical education quality.
Bridging Rwanda’s skills gap is an ongoing journey but progress made so far shows promise. Rwanda is laying a foundation for a future workforce that can support a knowledge-based economy with projects like Priority for Skills and Growth which has trained 23,000 youth in market-driven skills and newly approved PSGYE.
By investing in upskilling its youth, Rwanda is also investing in the private sector’s ability to grow and play a critical role in achieving Vision 2050's ambitious goals.
The REU offers recommendations on closing the skills gap as Rwanda transitions to a knowledge-based economy:
- Strengthen institutional mechanisms for identifying skills gaps.
- Improve Technical and Vocational Education quality.
- Expand access to scholarships and digital tools.
- Enhance sector-specific skills development.
- Increase public investment in higher education.
- Establish Sector Skills Councils.
- Expand work-based learning opportunities.
- Develop public-private partnerships for student housing.
- Build a comprehensive digital skills framework.
The REU assesses recent economic developments and prospects along with policy priorities. Despite global economic slowdowns, Rwanda has shown resilience driven by strong consumer spending in services and industry sectors. Rwanda's real GDP grew by 9.7% in Q1 2024 compared to last year's 8.2%. Investing in sector-specific skills systems will help maintain this growth trajectory.