PhotoCredit: Lawrence Baganiah.
In the early years following Rwanda’s independence in 1962, the job market was more accessible for high school graduates. This was due to the small population of Rwanda, as noted by Trading Economics, and low literacy rates as shown by a 38.243% literacy rate of adults (15+) in 1978 by World Bank Group. The first public university in Rwanda was the National University of Rwanda established in 1963 and the second and first private university Adventist University of Central Africa officially opened in 1984. There were several secondary schools which were built by the missionaries and were owned by Catholic and Protestant churches. Indatwa n’Inkesha School is one of the oldest secondary schools established in 1929. The limited number of high school graduates meant there were more opportunities in various sectors, including corporate jobs, teaching, and civil service. Additionally, agriculture was a primary source of employment, as the ample land and favorable climate conditions were sufficient to support the small population. According to Rwanda Environmental Management Authority, Rwanda’s economy was predominantly agrarian, with most of the population engaged in farming to sustain their livelihoods.
As time passed, especially a few years after the 1994 Genocide against Tutsis in Rwanda, the number of high school enrollment increased, leading to a rise in college attendance. It became apparent that a degree was increasingly necessary to secure jobs that previously required only a high school diploma.
Currently, unemployment is a significant issue, affecting not just high school graduates but also university graduates. This is partly due to Rwanda’s growing population. However, it’s intriguing how overpopulated cities in developed countries, like New York City, manage economically and socially, despite their high population density.
While many factors contribute to economic development, this article focuses on the role of startups. According to Forbes Advisor, startups are young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers. They are like children whose potential is not yet fully realized. These startups can grow into strong and successful companies like Amazon, Google, Airbnb, and Netflix.
Unlike the emphasis on physical infrastructure and conventional operational methods in traditional sectors of economy such as agriculture, manufacturing, mining and extraction, construction, and services including health, politics, education, and telecommunications among others, which dominated in the past. With a boom in technology, today’s startups often integrate technology with these fields. They don’t build new schools or hospitals or buy large plots for agriculture; instead, they offer services online, improve existing products, and expand market reach. These startups, such as Edutech, HealthTech, Agritech, Fintech, and other tech companies, are making significant impacts. Notable examples in Rwanda include Zamura Ltd, Ironji Ltd, Mago farms, AltSchool Africa, Umurava, the Einstein, and many others.
This shift highlights the importance of 5G internet, not just for entertainment but to enhance the quality of services these startups provide. While I haven’t listed all types of startups, the key point is that as traditional corporate jobs become scarce, startups are creating new corporate jobs for themselves and others. This demonstrates the value of education—the ability to use acquired knowledge and skills to innovate and improve existing industries. Rwanda Development Board highlights the importance of education beyond job acquisition and creation saying, “Due to improvements in education and in the standard of living, life expectancy increased significantly from 1997 to 2020 from 40 years to 69 years respectively which means people remain productive and active on the labor market.”
Traditional sectors still require professionals—teachers, doctors, storekeepers, engineers, farmers, and so on. However, though these startups are contributing to the rapid development of Rwanda, there are pros and cons that come with operating in the startup ecosystem. Below is a list of some pros and cons associated with startup building.
- Innovation: Startups are known for their innovative ideas and solutions. They have the flexibility to explore new concepts and technologies, often leading to groundbreaking products or services.
- Agility: Startups can be more agile and adaptive than larger, established companies. They can quickly pivot, adjust their strategies, and respond to changing market conditions.
- Entrepreneurial Spirit: Founders and employees in startups typically have a strong entrepreneurial spirit and a high level of motivation. This can lead to a dynamic and creative work environment.
- Opportunity for Learning: Working in a startup provides valuable learning experiences and skill development, as employees often wear multiple hats and gain a wide range of expertise.
- Financial Uncertainty: Startups often struggle with financial instability, as they may not have established revenue streams or consistent cash flow. This can lead to cash flow problems and difficulties in securing funding.
- Regulatory Challenges: Depending on the industry, startups may encounter regulatory hurdles and compliance requirements that can be complex and costly to navigate.
- Market Acceptance: New products or services from startups may face skepticism or resistance from consumers who are used to established brands and offerings.
- Limited Resources: Startups typically have limited resources, which can constrain their ability to hire experienced talent, invest in marketing, or expand their operations.
Funding remains one of the challenges that most startups face, but the government of Rwanda is supporting these new emerging businesses to succeed. Through accelerator and incubator programs, the founders of these startups are equipped to excel on the market place. The government is doing so through different programs like Rwanda Innovation Fund, Rwanda Green Fund, Angaza Capital, Rwanda Innovation Challenge, and many others. Currently, Rwanda has experienced rapid development that it is referred to as the “Singapore of Africa” and this does not come overnight. The government established a knowledge-based economy, and Rwanda’s economy has become an evidence to it. According to World Bank in Rwanda, Rwanda aspires to become a Middle-Income Country by 2035 and a High-Income Country by 2050.
