1 REPORT OF A STUDY ON THE CAUSES OF UNEMPLOYMENT IN RWANDA October 2015

1

REPORT OF A STUDY ON THE CAUSES OF UNEMPLOYMENT IN

RWANDA

October 2015

Background Study Objectives FindingsMethodology and Scope of Work

Observations and Recommendations

Conclusions Appendix

Contents

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Background

BackgroundAbout RCSP

Rwanda Civil Society Platform (RCSP) was created in 2004 as a network of Rwandan CSOs. The Platform is composed of 15 national umbrellas with more than 600 NGOs.

RCSPF serves to enhance CSOs to contribute to the well-being of the population by acting as a framework for dialogue

Exchange of information, mutual respect, lobbying and evidence based advocacy on national, regional and international issues on behalf of all members.

It is in this context that RCSP has conducted a survey on the status and causes on unemployment in Rwanda.

Why this study was carried out?Key Highlights

Employment presents one of the real challenges to the international community and also felt acutely in Rwanda. The National Institute of Statistics of Rwanda reports that the unemployment rate keeps increasing in Rwanda since 2006.

Since 1998 the Government of Rwanda carried out national consultations aimed at facilitating long term sustainable development and adopted a long-term strategic vision “vision 2020” with key developmental pillars which would help Rwanda move from a very poor country to a middle-income country with employment as one of the fundamental pillars.

The unemployment rate in Rwanda keeps worsening, the job market is not expanding at the same rate as the competition .

It is one of the biggest problems in the world especially in developing countries, and has indeed been a fundamental cause of poverty but has also been a result of the structured poverty in African economies both rural and urban. In Rwanda, the unemployment rate is (1.2%) and is one of the least in the regions with a significantly high employment rate of approximately 85%. (LMIS, 2010).


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Study Objectives

Overview and objectives of the study

Status of unemployment in Rwanda,

How employment policy is implemented throughout the country,

To assess to what extent the policy is adequately meeting the needs of the people,

Gathering all information on labor market characteristics, attitude of community in general vis a vis labor market,

Assessment of skills and knowledge demand and offer on labor market.

The research was meant to collect data on the following


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Methodology and Scope of Work

The methodologyHow did we collect the data?

To effectively address the needs of this study, we mainly employed qualitative research, using participatory approaches.

The main qualitative data collection methods used were;

Desk Reviews

Focus Group Discussions

Key Informant and In-depth Interviews.

The Methodology cont’dLiterature Review/Desk reviews

Various documents were reviewed including the following :

EDPRS 1 EDPRS 2 Vision 2020 ICT Policy Home grown solutions- Girinka, Ubudehe, VUP National Employment policy 2007 TVET policy

The methodology cont’d

Student who have graduated in various universities in Kigali and those about to graduate

Rwanda Tourism University College (RTUC) Jomo Kenyatta University Of Agriculture And Technology (JKUAT) University of Rwanda, College of Education (formerly Kigali Institute Of

Education) University Of Kigali Students

Student perspectives

Scope of workNumber of FGD’s and sampled districts

Coverage: 12 Focus Group Discussions were conducted in all districts comprising 68 male and 35 female respondents

District: Gakenke. Sector: GakenkeDistrict: Ngororero; Sector: KabayaDistrict: Huye; Sector: NgomaDistrict :NyarugengeDistrict: Nyaruguru; Sector: KibehoDistrict: Gatsibo; Sector: GasangeDistrict: Gatsibo Sector: MuhuraDistrict: Gatsibo Sector: KabaroreDistrict: Gakenke, Gakenke Cell (Rural)District: Gakenke Karambo Sector, Karambo Cell

District: Musanze, Muhoza Sector District: Ngororero, Muhororo Sector District: Ngororero, Kabaya Sector District: Ngororero, Sector: Kabaya District: Huye, Sector: Ngoma District: Nyaruguru, Sector: Kibeho District: Nyaruguru, Rusenge Sector District: Gatsibo, Sector: Gasange District: Gatsibo, Sector: Muhura District: Gatsibo, Sector: Kabarore


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Findings

Findings of the studyDetailed results


Overview of the status of unemployment in Rwanda According to - EDPRS2 2013 report, employment has remained high despite increasing

numbers entering the workforce.

Extent to which the employment policy is meeting the needs of the people it is supposed to support. The National Employment Policy appears to be a welcomed idea among employers but

the setback seems to be on the implementation of employment strategies put in place by different employers largely from the private sector, that appear to be ineffective and less efficient in addressing the problem of unemployment

Understanding the Rwandan labour market Whereas there could be a wide range of opportunities ranging from public to private

institutions qualified and competent job seekers focus their job search on white collar.- Perception

Access to capital is still a problem to many of the people in rural areas because of stringent measures by banks- case of BDF.

There appears to be laxity in implementing the employment policy among employers and authorities vested with the responsibility for implementation.

Most factors affecting youth unemployment are skills mismatch with an average skills deficit of 40%, and limited job growth and expansion.

Taxes on start ups are so high Private sector is seen not to be playing a significant role in providing opportunities for

the available labour Unemployment in Rwanda is viewed to be still lower compared to some other EAC

member countries. However, the fact remains that demand for jobs is higher than supply.

The National Skills Audit conducted in 2009 reports an average 40% skills deficit and severe skills gaps in some categories such as technicians, with current demand exceeding supply by 60% across the public, private and not-for-profit sectors.


Measures need to be taken to generate data and other information on education levels, skills-mix and mismatch as well as other impediments to youth employment and employability, in order to design effective policy responses

The Rwandan community is optimistic since the Rwandan government is actively playing a role in ensuring that the problem of unemployment is addressed.

There is a negative attitude towards the job market due to reported cases of nepotism and other unfair practices that job seekers have experienced while looking for jobs.

The government does not monitor provision of jobs in the private sector because these are private individual’s businesses that have the prerogative to employ whoever they want..

Working experience, as one of the key conditions sought after by employers looking to fill a vacant position, acts as an unemployment gridlock that locks out thousands of young, energetic fresh graduates with fresh ideas to evolve the economy into another level.

The perception and attitude of young people towards TVET is also a big problem.



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Observations and Recommendations

Recommendations to the Government

While we cannot discount a significant number of Hanga Umurimo beneficiaries that have used their monies profitably, the Business Development Fund (BDF), the guarantor, must work more closely with the concerned banks, the Ministry of Trade and Industry as well as local governments to ensure that these projects deliver their intended objectives – alleviating poverty and creating jobs.

Furthermore, the best way to guarantee ownership is to revisit the entire scheme with the view to ensure that it emphasises ownership and accountability on the part of the beneficiary. The beneficiaries must take full ownership of these projects and mismanagement should not be tolerated.

The attitude that Hanga Umurimo money is ‘free money’ must be fought tooth and nail. It’s an attitude that must be stopped, more so because we simply cannot afford the initiative to fail.

In order to move away from the current model of funding, the government should consider providing the start-up entrepreneurs with much technical assistance rather than cash in order to avoid mismanagement.

Rather than give them cash which excites them, government could look at the critical things that these startups need to get started such as operational premises, processing equipment, leasing land, give them things to improve their management skills

This model, is less risky compared to dishing out liquid cash because the equipment can be recovered in case the start-up somehow fails to grow due to other factors.

Recommendations cont’d to the Government

Education curriculum should be revised to incorporate skills and enterprise development. A special program should be designed for low-skilled youth in vocational centers. It is therefore incumbent on government to work closely with the private sector to promote internships, graduate trainee programmes, and community-based projects that create jobs for young people.

It is however true that a limited budget is a major constraint and this explains why TVET institutions are not able to employ qualified trainers, assessors and verifiers.

Stimulate involvement of companies and other key stakeholders. Government should encourage private companies and other key stakeholders to cooperate in TVET planning and processes, including curriculum design, training and mentoring. One way to do this would be to strongly publicize the benefits of TVET for industry – for example, access to well-qualified and work-ready employees in the future.

Build partnerships among a wide range of stakeholders locally, nationally and internationally. Partnerships can enable TVET institutions to increase their knowledge of the global and local skills markets, expand their capabilities, promote work opportunities for young people, and improve the quality and relevance of their programmes.

Recommendations cont’dto the Government on TVET

To play a substantial role in tackling youth unemployment, TVET institutions need to overcome negative bias against TVET by parents and students, which prevents many young people from enrolling in TVET programmes. This may be achieved by publicizing the benefits of TVET Public promotion of TVET: TVET schools across the country must promote their services to parents by arranging visits and on a regular basis.

TVET institutions in the country should carry out regular monitoring and evaluation as this measure helps in assessing the programmes offered to the students. In addition, regular tracking of graduates’ job status and progress and surveying employers to assess their satisfaction with graduates’ skills and competences

Recommendations cont’dto the Government on TVET

RRA should reach out and educate the business community about its different tax

rates and mode of payment. The study revealed that the biggest problem with the

tax paid is in fact that the community does not understand how the tax is arrived

at as well as how it is paid but not because it is too high.

The RRA should improve on the methods of collecting the taxes. It should stop the

method currently used of closure of business premises on default. This can only

come in only as a last resort after all the other methods of collection have failed.

This should be an exception and not a rule. The RRA should improve awareness

amongst the taxpayers of the need to pay taxes and how their tax liability is

determined and the time process of the tax assessment

Recommendations cont’dto the Government on Taxes

Furthermore, Government should allow a tax relief for start-up companies by

allowing the first 3 years of trading, due to losses or insufficiency of profits. A 3-

year tax relief for start-up companies commencing a new trade is suggested as a

support to encourage new business development and employment creation. To

ensure that the measure is focused on job creation and reducing unemployment

Recommendations cont’dto the Government on Taxes

Lobby government of Rwanda to improve TVET’s image and status. TVET institutions should publicize the benefits of technical and vocational education and training to governments, parents and young people to make TVET a more attractive option and to gain equivalent legislative and financial treatment as general education institutions.

Recommendations cont’dto the private sector

Persuade policy makers to increase TVET funding. TVET institutions should petition for funding on an equivalent basis to general education institutions (Universities).

Up-to-date learning environments, reasonable salaries for teachers will go a long way towards raising TVET quality – and its image.

Recommendations cont’dto the civil society

The community in partnership with TVET institutions in the country should carry out regular monitoring and evaluation as this measure helps in assessing the programmes offered to the students.

Regular tracking of graduates’ job status and progress and surveying employers to assess their satisfaction with graduates’ skills and competences.

Recommendations cont’dto the community


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Conclusions

ConclusionKey take out

Finally the survey suggests not only a strong partnership with the government, the private sector, civil society organizations and Development partners to address the unemployment issue but also to be much focused on increasing the orientation of skills to technical skills, entrepreneurship, and increasing all local initiatives such as detailed in the document.

Key recommendations have been developed and are targeting the government, CSOs, private sector, employers, local government and the community itself hoping that it will help in the future to reverse the situation of the unemployment in Rwanda.


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Appendix

Key information sourceSelected K.I.I respondents

Key informants for the study were drawn from key government, private sector and CSOs:Key government ministries:

Ministers of public service and labour, Local Government, Trade and Industry, Gender and Family Promotion, Youth and ICT Finance and Economic planning

District labour InspectorsVice Mayors in charge of Economic AffairsRCSP officialsRecruitment firms/Agencies

PSF Business Development Fund (BDF) National Employment Program under MIFOTRA Hanga Umurimo Cooperatives/Rwanda Cooperative Agency NISR WDA for TVET program Public Service Commission Banks, Saccos Vision 2020 Umurenge Program (VUP)

Key information source cont’d Selected K.I.I respondents


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1 REPORT OF A STUDY ON THE CAUSES OF UNEMPLOYMENT IN RWANDA October 2015