Banking on youth: Rwanda’s path to a 21st century economy

Divine, a young Rwandan girl, is working as a trainee in a clothing manufacturing company. She is very clear that she chose the program because she needs fashion design skills.

George, the managing director of the company, said using programs such as his are necessary to close the significant industrial skills gap.

This win-win situation between Divine and George is not unique. Rwanda has the ambitious goal to become an upper-middle-income economy by 2035, a goal that requires investing in industrial skills that meet employers’ demands.  Over the past four years, the government has run a formidable critical skills program for youth at various educational levels, as part of its 2018 – 2024 National Strategy for Transformation (NST). This development blueprint covers all sectors in education, aiming to equip the more than 200,000 youth entering the labor market annually with critical productive skills for access to good quality jobs.

Despite meaningful progress so far, many challenges persist. More than 90% of enterprises are in the informal sector, with few opportunities for upskilling, and about 14% of the workforce is unemployed and not actively building market-relevant skills. Additionally, the unemployment rate is about 21% for youth, and of those that are employed, about 60% are in jobs typically defined as low productivity, including subsistence agriculture, retail, and construction. Basically, Rwanda has considerable youth unemployment and insufficient access to quality jobs. This is exacerbated by a changing global economy with labor markets evolving at a fast pace.

A holistic approach that embraces skills development is necessary for youth to become active and productive in the economy.  For example, Rwanda can pursue more productive employment and individual growth through skills upgrading in the informal sector. Additionally, equipping youth and low-level workers with in-demand formal sector entrepreneurial skills—including in growing areas such as construction, ICT and tourism—gives young jobseekers access to higher-paying jobs.

The World Bank supports these efforts through a comprehensive approach, currently reflected in two programs: The Rwanda Priority Skills for Growth (PSG) and the Africa Higher Education Centers of Excellence (ACE II).

PSG sets a clear vision for the country and is expanding opportunities for the youth to acquire quality, job-ready skills. So far, the program has trained over 27,000 youth to become change-makers in areas such as climate change, energy, and transport. Furthermore, PSG has revamped the Labor Market Information System to provide relevant information for youth to make informed choices about their careers while finding jobs that will help Rwanda become a low-carbon, digital economy. The initiative is also guiding policymakers toward a better labor market and enlightened education planning, while leveraging opportunities emerging from the COVID-19 (coronavirus) crisis, particularly for the adoption of digital business.

In addition to strong technical skills, growing economies need innovative professionals to drive transformative economic development. To that end, ACE II, is strengthening four centers of excellence at the University of Rwanda. These centers deliver quality post-graduate education and build collaborative research capacity in energy, ICT, data science, and education.

Going forward, these initiatives need to be complemented with quality jobs and sustainable, inclusive long-term growth. For this, at least three priorities need emphasis. First, strengthening skills-development foundations through basic education, a building block for further skills development and, ultimately, employment in quality jobs. Foundational learning and skills are critical for maximizing returns on investments in post-secondary education. 

Second, stronger efforts need to be made to include girls in typically male-dominated areas, especially Science, Technology, Engineering, and Mathematics (STEM). Despite the government’s goal of gender parity in STEM by 2024/25, only 32% of female students are in STEM programs at the tertiary level. A structured pre-university, or bridge, academic support program could address pre-entry gaps for young women transitioning to tertiary levels.

Third, Rwanda's vision to be a leading ICT Hub and a digital and knowledge economy requires sustained investment in digital skills and infrastructure.  Digitization could generate about three million jobs by 2030, up from one million in 2016. These will be in disciplines such as content creation, processing and management, digital communication, analytics, hardware management, software development and application management. Besides, specific skills associated with climate change adaptation and decarbonization will be required in solar power, climate-smart agriculture, and e-mobility.

The Bank remains committed to supporting Rwanda on this journey. Investing in skills development from a holistic perspective will make today’s youth the leaders of tomorrow, fully equipped to apply their skills in a modern economy while contributing to a more prosperous Rwanda for all.