Rwanda Warns Minimum Wage Increase Could Trigger Job Losses Without Productivity Growth

KIGALI, July 9, 2026 - Rwanda’s Prime Minister Dr. Justin Nsengiyumva has called for caution in discussions over introducing a national minimum wage, warning that a poorly designed policy could increase unemployment if businesses are unable to absorb higher labor costs. Addressing Parliament on June 9, 2026, while presenting the government’s efforts to strengthen economic capacity and improve citizens’ welfare, the Prime Minister said increasing productivity and workers’ incomes should remain a priority rather than imposing a minimum wage without considering economic realities. Rwanda’s current minimum wage dates back to 1974 and sets a daily payment of 100 Rwandan francs for employees working for others. Dr. Nsengiyumva said wage discussions should distinguish between a basic salary and a living wage that enables workers to support their families, cover essential needs, and maintain a decent standard of living. He argued that employers must also be considered in any wage reform because salaries are paid from business revenues. The Prime Minister gave the example of a company employing 10 workers at 50,000 Rwandan francs each per month, saying that forcing the employer to double salaries without a corresponding increase in income could make it impossible to maintain the same workforce. He warned that although a minimum wage law may appear beneficial, it could fail in practice if employers lack the financial capacity to comply. According to him, some businesses could respond to higher wage requirements by reducing staff numbers, turning a policy intended to improve workers’ lives into a source of unemployment. Dr. Nsengiyumva said the issue requires broad discussion that balances workers’ living conditions with the ability of businesses and industries to sustain employment. He acknowledged that some sectors still pay very low wages, including workers earning around 1,500 Rwandan francs, and said the government is working to address these gaps. The government has also focused on ensuring that funds allocated for daily workers’ salaries in development projects are fully paid to employees rather than being reduced through intermediaries. Since the first quarter of 2025, Rwanda has recorded the creation of more than 240,000 jobs as part of efforts to expand employment opportunities and strengthen household incomes. Justice and Rights