Transport, Employment, Unemployment and Their Impact on the Economy
Senior 6 · General and Religious Studies
Transport, Employment, Unemployment and Their Impact on the Economy
Lesson 2 of 4
24 min
In 2025, according to the National Institute of Statistics of Rwanda (NISR), about 4.8 million Rwandans aged 16 and over had a job. They picked tea on the slopes of Nyungwe, carried passengers on motorcycles in Kigali, taught in schools, sewed clothes, built houses and wrote software. The number of jobs outside farming had grown from about 2.0 million in 2019 to about 2.9 million in 2025.
Each of those jobs is a source of income for a household, but also a link in a chain that runs through the local market, the national budget and the world economy. This lesson follows that chain.
Definition
Employed person: in labour statistics (ILO), a person of working age who, during a short reference period such as one week, worked for at least one hour for pay or profit. In Rwanda's survey, working age is 16 and over.
Labour force: all employed and unemployed people together: those who work or are actively looking for work.
Labour force participation rate (LFPR): the labour force as a percentage of the working-age population.
Employment-to-population ratio (EPR): the employed as a percentage of the working-age population.
Formal employment: jobs covered by labour law and social protection (a contract, social security, paid leave). Informal employment: jobs without these protections.
Multiplier effect: the way one person's new income is spent and becomes other people's income, so the total effect on the economy is larger than the first payment.
Important
Source A: main labour indicators for Rwanda, NISR Labour Force Survey Annual Report 2025
| Indicator | 2019 | 2024 | 2025 |
|---|---|---|---|
| Labour force participation rate (%) | 53.4 | 62.9 | 63.8 |
| Employment-to-population ratio (%) | 45.3 | 53.5 | 55.9 |
| Off-farm main jobs (thousands) | 2,049 | 2,670 | 2,908 |
| Informal employment rate (%) | 89.5 | 91.2 | 91.8 |
| Unemployment rate (%) | 15.2 | 14.9 | 12.4 |
Between 2019 and 2025, the share of working-age Rwandans with a job rose from 45.3% to 55.9%, and off-farm jobs grew by thousand, an increase of about . That is strong job creation. But look at the informal employment rate: about 9 in every 10 jobs are informal, and the share has not fallen. Most new jobs give an income, but not a contract, a pension or health insurance through the employer.
Figure 2 shows the sectors. Services employ the largest share (44.4% in 2025), then market-oriented agriculture (39.1%), then industry (16.5%). The rise in agriculture's share in 2021 and 2022, and its fall afterwards, suggest that during the COVID-19 period many people turned to farming until other jobs recovered.
| Level | Positive impacts of employment | Example |
|---|---|---|
| Local | Household income, food security, school fees, health insurance; spending that keeps local shops and markets alive (multiplier); less crime and idleness; dignity and self-reliance | A tea factory's wages are spent in nearby markets, which then employ traders and transporters |
| National | Higher output (GDP); more tax (income tax, VAT) and social security contributions; less public spending on support; skills and productivity grow; social stability | Rwanda's NST2 (2024–2029) sets a target of 1.25 million productive and decent jobs |
| Global | Exports and global supply chains; remittances from workers abroad; investment flows; workers' skills move between countries | Rwandan tea and coffee are sold worldwide; the ILO counts about 2.1 billion informal workers worldwide (2026) |
Warning
A job is not always a decent job. Do not assume that a rise in employment means a rise in living standards. With over 90% of jobs informal, many workers earn little, have no contract and no protection. Good answers distinguish the number of jobs from their quality.
Tip
Use the rates, not just the numbers. The number of workers grows with the population. To show real progress, quote a rate (the employment-to-population ratio or the unemployment rate) with its year and source.
Important
Discuss. A government can create many jobs quickly by encouraging informal self-employment, or fewer jobs slowly by attracting factories with formal contracts. Which should Rwanda prioritise, and why?
Practice
Sources and credits
Written by Ganzaa: Figure 2, the tables, the calculations and the exercises.
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
