As Rwanda marks International Labour Day, new data shows a labour market steadily transforming, with gains in job creation, participation and incomes, even as concerns over job quality persist.
The National Institute of Statistics of Rwanda's 2025 Annual Labour Force Survey indicates that the country is not only recovering from shocks such as Covid-19 but also shifting towards a more service-driven economy.
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Over the past decade, unemployment has declined from 17.3 per cent in 2017 to 12.4 per cent in 2025, while labour force participation has risen from 53.4 per cent to 63.8 per cent.
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This reflects efforts to move workers out of subsistence agriculture into more productive off-farm activities. Since 2019, off-farm employment has grown from 2.05 million to 2.91 million, with more young people finding opportunities in trade and services.
Services lead job creation
Between 2024 and 2025, the economy created 238,491 net off-farm jobs, an 8.9 per cent increase, helping reduce unemployment by 2.5 percentage points from 14.9 per cent in 2024.
Wholesale and retail trade accounted for over 101,000 new jobs, while employment in accommodation and food services grew by 21.5 per cent, driven by expansion in conference tourism and hospitality.
John Bosco Kalisa, CEO of the East Africa Business and Investment Advisory Council, said the trend reflects Rwanda's broader development agenda.
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"Rwanda is on the right trajectory. The service sector continues to drive growth and productivity, in line with the National Strategy for Transformation and Vision 2050," he said, noting a clear link between economic growth and falling unemployment.
He added that agriculture is also expected to evolve. "With increased investment, it will shift from subsistence to commercial farming, with potential for competitive incomes."
Skills and mismatch concerns
Education is increasingly shaping labour outcomes. Unemployment among university graduates fell to 10.2 per cent from 11.5 per cent a year earlier, while employment among technicians and professionals rose by 19.3 per cent.
However, skills mismatch remains a concern. "There is still a gap between what academic institutions provide and what the labour market demands," Kalisa said, calling for better alignment of curricula with market needs.
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He also highlighted persistent informality, noting that many small businesses face barriers to formalisation and require targeted support.
Digital platforms widen access
Digital platforms are reshaping how job seekers connect with employers. Dieudonne Tumukunde Bizagwira, CEO of Kazispace, said technology is making job access faster and more transparent.
"Job seekers can apply from anywhere, while employers reach a wider talent pool," he said, adding that platforms are also helping structure informal work by improving visibility and job matching.
However, he noted that many young people apply broadly without tailoring their profiles, affecting outcomes. He stressed the need for stronger digital literacy and guidance.
New models ease business costs
Emerging business models are also supporting entrepreneurs. Shared working spaces are helping small traders reduce costs and risks.
Lambert Gahungu, founder of Tajyire Group, said co-renting has enabled rapid expansion. "From about 30 businesses, we now host between 1,300 and 1,500 operators," he said, noting that shared spaces significantly lower rental costs.
Persistent job quality gaps
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Despite progress, challenges remain. Labour underutilisation rose to 56 per cent in 2025 from 54.2 per cent in 2024, signalling widespread underemployment.
The issue is more pronounced in rural areas, where underutilisation reached 61.9 per cent due to seasonal agricultural work.
Incomes are improving, with average monthly earnings rising to Rwf82,996 in 2025 from Rwf73,948 in 2024. However, disparities persist, with service sector workers earning far more than those in agriculture.
Calls for flexibility
Labour leaders say global pressures are also shaping workplaces. Africain Biraboneye, Secretary General of CESTRAR, cited rising fuel costs as a key concern affecting transport and living costs.
He called for greater workplace flexibility, including remote work where possible, to help workers cope. He also highlighted progress in workers' welfare, including expanded access to health insurance and professional certification programmes.
