Under Doing Business, Rwanda ranks just below the survey’s halfway point: 95th in the world, out of 178 economies studied in 2007. As detailed in this chapter’s Legal Framework discussion, Rwanda’s Labour Code indeed contains a number of restrictions that warrant loosening for the long-term benefit of the business climate and for workers generally. In addition, certain institutions are structured in a way that does not support, or even interferes with, the productive engagement of workers. In particular, the role of labor inspectors lacks clarity and there is a lack of consensus over the accountability of labor inspectors.
But the Doing Business inquiry is limited to the role played by government in regulating the employer-employee relationship. The Doing Business indicators examine the ease with which companies and other employers can lawfully hire and fire workers, looking specifically at the “rigidity of employment” – that is, restrictions on hiring workers, limitations on hours worked, and costs and difficulty of firing. The BizCLIR diagnostic revealed, however, that the issue in Rwanda is less a concern over government restriction and intervention in the employer-employee relationship and more one of employee preparedness, capacity, and productivity. In short, Rwanda lacks skilled workers, at least in numbers that are necessary for the country to achieve the economic growth it seeks in a relatively short period of time.
Specific shortfalls in Rwanda’s workforce include the following:
- A lack of skilled professionals (including lawyers, accountants, engineers, architects, and others)
- A lack of skilled tradespeople (plumbers, electricians, and carpenters)
- Among unskilled laborers, a debilitating unfamiliarity with modern work habits, practices, and labor rights
- Literacy rates that, though relatively high for the region, are still too low
- Insufficient access to primary and secondary education, notwithstanding certain improvements in this area
- Weaknesses in university-level education, including high costs, poor access for women, and a lack of orientation toward private sector opportunities
- Discriminatory forces against women that diminish their productivity in the workforce
- Pervasive health concerns within the populace.
On the other hand, certain trends favor the strengthening of Rwanda’s workforce and labor productivity over the next generation. They include:
- Improved access to primary education, through the elimination of certain school fees
- Reduced differences between girls and boys in access to primary education
- Strengthened opportunities in vocational training
- Significantly increased opportunities in continuing education, which are being accessed by both working and unemployed adults
- Considerable efforts in employer-sponsored training
- Streamlined access to skilled foreign employees, who provide needed skills and serve as on-the-job trainers for local workers.
In the near term, Rwanda is challenged with ensuring that its revised Labour Code – currently in draft form – both fulfills the country’s obligations under international conventions and better supports economic efficiency and productivity. Legal and regulatory reform, however, will not be enough to pull Rwanda into a state of competitiveness with other dynamic African economies, let alone other states that are vigorously seizing opportunities in productivity and competitiveness. Across Rwanda’s business environment, institutions must continue to be strengthened for the purpose of addressing Rwanda’s critical needs in workforce capacity and productivity
