Development Strategies
Senior 6 · Economics
Development Strategies
Lesson 2 of 4
25 min
MINEDUC's 2024–2025 Education Statistical Yearbook reports that only 15.0% of pupils who start Primary 1 reach Senior 6 within 12 years without delay, and 48.0% complete P6 within six years. In 2023–24, 20.4% of primary pupils repeated their year and 4.9% dropped out. At the same time, 97.7% of children aged 6–11 were enrolled in school (MINEDUC, 2025, pp. 5–6).
Think: you are among the 15 in every 100. Almost every child starts school, so where does the system lose the others? And why should an economist care, rather than only a teacher?
Definition
Education: the process of acquiring knowledge, skills, values and attitudes. Economists treat it as an investment in human capital, the productive capacity embodied in people.
Formal education: structured schooling by level, with a curriculum and certificates. Non-formal education: organised learning outside the school system, such as adult literacy classes and short courses. Informal education: learning from family, work, apprenticeship and the media.
| Type | Examples | Learners (2024–25) |
|---|---|---|
| Pre-primary | Nursery schools, early childhood centres | 683,234 in pre-primary |
| Primary | P1 to P6 | 2,952,236 |
| General secondary | Lower (S1–S3) and upper (S4–S6) secondary | 573,321 lower; 213,294 upper |
| Technical and vocational (TVET) | TVET levels 1–5 schools and polytechnics | 135,025 (levels 1–5), up 15.6% in a year |
| Higher education | Universities and polytechnic institutions | 153,318 |
| Non-formal | Adult literacy centres | 93,548 |
Source: MINEDUC, 2024–2025 Education Statistical Yearbook, pp. 4–5.
Education creates positive externalities: benefits to people other than the learner, such as a more productive workforce, better public health and less crime. The marginal social benefit (MSB) is therefore greater than the marginal private benefit (MPB). Families decide on MPB, so they choose Q₁, less than the socially best Q*, and society loses the shaded triangle. Poor families, who cannot borrow against a child's future earnings, choose even less. This is why governments provide or subsidise education, and why it is called a merit good.
Worked example
Worked example 1: is a TVET course worth it? (illustrative figures)
A three-year TVET course costs Frw 600,000 a year in fees, tools and transport. The trainee also gives up Frw 480,000 a year that she could earn as an unskilled worker. After qualifying, she earns Frw 400,000 a year more than she would have done, for 30 years.
The return is higher than many savings accounts, so the investment pays. But a poor household may still not afford it: it must find Frw 3.24 million before any benefit arrives. That is a case for bursaries and loans. (A full answer would discount future earnings; the simple figures overstate the return a little.)
Worked example 2: the cost of repetition
Suppose 20.4% of about 2.95 million primary pupils repeat a year, as in the yearbook, and a school place costs the government Frw 60,000 a year (an illustrative figure). Estimate the number of extra pupil-years and their cost.
Every year of repetition is a place that could have taught a new pupil. Better early learning, which lowers repetition, can save money as well as time.
| Problem | Effect |
|---|---|
| High repetition and dropout | Wasted years; only 15% reach S6 on time in Rwanda (MINEDUC, 2025) |
| Weak learning quality | Pupils attend but learn too little; overcrowded classes and limited materials |
| Teacher shortages and training | Large classes; subject teachers lacking in science and mathematics |
| Cost to families | Uniforms, materials and lost labour keep poor children out |
| Mismatch with the labour market | Graduates without the skills employers want; graduate unemployment |
| Inequality of access | Rural, poor and disabled children lag; girls are under-represented in TVET |
| Brain drain | Educated people emigrate, taking the public investment with them |
| Low enrolment beyond basic level | Secondary net enrolment 28.9%; 71.4% of 18–22-year-olds out of school (MINEDUC, 2025, p. 5) |
Warning
Enrolment is not learning. Rwanda enrols almost every child of primary age, yet many repeat or leave early. In an essay, separate access (getting children into school), efficiency (getting them through on time) and quality (what they learn). Policies that raise one can lower another: rapid expansion can crowd classrooms.
Tip
Education as an investment: costs now, returns later. Name the costs (direct costs and forgone earnings), the private returns (higher pay) and the social returns (externalities). The gap between social and private returns is the case for public spending.
Important
Discuss. Should Rwanda's next franc for education go to pre-primary schooling, to TVET, or to universities? Use the yearbook figures and the idea of social returns to justify your choice.
EconplusDal, "Positive Externalities in Consumption and Production". Watch how the MSB–MPB diagram is drawn for education, then compare it with the diagram in this lesson.
Practice
Sources and credits
Written by Ganzaa: the text, the externality diagram, the tables, the worked examples and the practice items. The costs, earnings and cost per school place in the worked examples and practice items are illustrative.
