28 March 2018, Kigali - Labour migration has only recently emerged as an economic issue in Rwanda. A joint report by the OECD Development Centre and the International Labour Organisation (ILO), How Immigrants contribute to Rwanda’s economy, provides new insights and makes policy recommendations to enhance that contribution.

 

The report provides an unprecedented analysis of immigrant workers’ contribution in three areas of Rwanda’s economy: labour markets, economic growth and public finance. It shows that immigrants and native-born workers have very different, yet complimentary, labour market characteristics. Immigrants tend to be older, less economically active and less often employed than native-born workers. But they are also more highly educated, more often have employment contracts and are active in the most productive sectors.

 

The analysis also assesses whether the presence of foreign-born workers has benefited or harmed the employment opportunities of native-born Rwandan workers. It reveals that the presence of foreign-born workers can be positive: under the right circumstances, it increases the wages of native-born workers, even if that presence, particularly for those who arrived recently, has a negative impact on the employment rates of the native-born.

 

Based on the sectoral distribution of workers and their productivity in 2012, the most recent year for which data is available, immigrant workers are estimated to have contributed between 10% and 12.7% of the gross domestic product (GDP), which is much more than their share in employment of 4.7%. Such positive contributions to the Rwandan economy in part result from the large differences in skill levels between immigrant and native-born workers.

 

The foreign-born population contributed between 10% and 11% of total revenue towards the government’s fiscal balance in 2012, while the value of their net per-capita contribution (public expenditures minus tax revenues) greatly exceeded that of native-born individuals. Tax revenues collected from foreign-born individuals also outweighed the benefits they received from publicly provided goods and services.

 

Policy recommendations

 

According to the report, the contribution of immigrants to the Rwandan economy could be further enhanced by:

 

• Facilitating the recognition of immigrants’ skills, better monitoring skill gaps in labour markets, and raising awareness of immigrants' rights through information campaigns.
• Improving co-ordination, coherence and implementation of labour market and migration policies, so as to attract more international firms and accelerate regional integration.
• Building on the momentum of the Vision 2020 framework by further developing skills, formalising enterprises and attracting foreign investment.
• Enhancing the contribution of large foreign private firms to domestic employment, by consolidating promotion agencies and encouraging skill transfers between national and international enterprises.
• Ensuring regular and comparable data collection to better understand the long-term impacts of immigration on labour market, productivity and growth.

 

Background information

 

Labour migration is a growing issue in Rwanda. Internal and international migration in the country increased considerably during the twentieth century, mostly in the form of large in- and outflows of refugees.

Little attention was paid to migrants’ economic integration until the mid-2000s, when the government aligned its policy approach to migration with its economic and development objectives: since then, the National Migration Policy has been aiming at boosting economic development by attracting foreign investments and immigrant workers with valuable skills, as well as facilitating the return of the Diaspora.

 

Press contacts:

For more information or to obtain a copy of the report or request an interview, journalists are invited to contact:

• Guebray Berhane ([email protected]; Tel: +225 87905779) at the ILO Regional Office for Africa
• Bochra Kriout ([email protected]; Tel: +33 (0)1 45 24 82 96) at the OECD Development Centre’s Press Office

 

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How immigrants contribute to Rwanda’s economy is part of the joint International Labour Organisation - OECD Development Centre’s comparative project on Assessing the Economic Contribution of Labour Migration in Developing Countries as Countries of Destination that is co-financed by the European Union. The nine other countries covered by the project include: Argentina, Costa Rica, Côte d’Ivoire, the Dominican Republic, Kyrgyzstan, Ghana, Nepal, South Africa and Thailand.

Find out more about the project: http://www.oecd.org/dev/migration-development/eclm.htm and http://www.ilo.org/eclm.