Lack of policy, minimum wage take toll on informal sector

Saturday February 12 2022
Informal sector

Without the minimum wage the desperate workers are at the mercy of their employers. PHOTO : Cyril NDEGEYA


Unfriendly policies, lack of minimum wage and diplomatic differences that have seen Rwanda close border with some neighbouring countries are chocking informal sector.

Many informal cross border traders around the Rwanda-Burundi border and those near the Rwanda-Uganda border lost their livelihoods years before the Covid-19 broke-out.

Six months after the Rwanda-Ugandan border was closed in 2019, the Rwanda central bank figures indicated an 8.1 per cent drop in informal cross border exports, while imports fell by 40 percent, compared to the previous year of 2018.

Thousands of livelihoods depend on small-scale informal trade around border areas but this has come to a standstill, which has affected many people’s standards of living. The absence of the minimum wage in Rwanda is yet another factor that has still subject millions of informal sector workers to  exploitation by their employers who end up paying them meagre wages because there is no legal instrument that impedes them.

A wide spectrum of low-income wage earners, for instance house helps, cleaners, construction labourers, plantation workers continue to face this type of exploitation, which has kept many in this cycle of vulnerability.

Without the minimum wage the desperate workers are at the mercy of their employers, many of which are paying them far below what they deserve for the work done.


“Lack of minimum wage has continued abetting exploitation of the informal sector at the hands of their employers, the pandemic has made things even worse because it has increased desperation,” said Biraboneye Africain, the head of CESTRAL, an umbrella body of workers unions in Rwanda.

He said many of the informal workers do not belong to any trade union to fight for them.

A study done by the institute of policy and Research, IPAR last year indicated that the economically vulnerable people said they do not save because they do not have enough money for both subsistence and saving.

And that those in rural areas still account for a large number of the poor who can barely cover their daily expenditures, or produce what they consume.