Rwanda’s real GDP grew by 9.7% in the first quarter of 2024, surpassing the previous year’s growth of 8.2%, according to the latest edition of the Rwanda Economic Update (REU) launched today.
The report highlights Rwanda’s impressive resilience amid a global economic slowdown, driven by robust consumer spending in key sectors such as services and industry.
The labor market also experienced a strong recovery, with over half a million new jobs created in the fourth quarter of 2023. This marked the most significant reduction in unemployment since the COVID-19 pandemic, signaling a broad-based expansion of the workforce.
“The labor market expansion in Rwanda was broad-based, with women benefiting slightly more than men,” said Calvin Djiofack Zebaze, World Bank Senior Country Economist for Rwanda.
“To leverage its youth demographic, Rwanda needs to expand labor force participation, as only 2.8 million out of 8.1 million working-age individuals are employed full time.”
Rwanda’s youth population remains a focal point for future growth. The World Bank emphasized the need for improved education, training, and employment opportunities to fully harness the potential of Rwanda’s young workforce.
The 23rd edition of the REU, titled Accelerating Skills Development to Foster Private Sector Growth in Rwanda, also highlights a moderation in inflation. After peaking at over 21% in 2023, inflation fell to 5.0% year-on-year by August 2024, within the National Bank of Rwanda’s target range.
This improvement was driven by tighter monetary policies and increased food supply, particularly fresh produce.
The report stresses the importance of skills development for private sector growth, noting that an inadequately educated workforce remains a major obstacle for firms in Rwanda.
Significant efforts are needed to improve job matching and increase public investment in education, especially in Technical and Vocational Education and Training (TVET) and higher education. Sector-specific audits in energy, agriculture, manufacturing, mining, urbanization, and Meetings, Incentives, Conferences, and Exhibitions (MICE) underscore the urgent need for enhanced skills.
“Skills development is critical to achieving Rwanda’s Vision 2050 goals,” said Sahr Kpundeh, World Bank Country Manager for Rwanda. “By building a comprehensive system focused on sector-specific skills, Rwanda can cultivate a workforce equipped to meet its growth and economic objectives.”
The REU’s recommendations include strengthening mechanisms for identifying skills gaps, improving the quality of technical and vocational education, increasing access to scholarships and financial aid for disadvantaged students, and enhancing partnerships between academia and employers.
Coinciding with the report launch is the recent approval of the $200 million Rwanda Priority Skills for Growth and Youth Empowerment Project, which will address challenges identified in the report by providing market-demanded skills to 200,000 vulnerable youths across the country.
