THE REPUBLIC OF RWANDA

ECONOMIC
DEVELOPMENT AND
POVERTY REDUCTION
STRATEGY II

2013 - 2018

MAY 2013
Copyright © Ministry of Finance and Economic Planning (MINECOFIN), May 2013

All rights reserved

Printed in rwanda by:

www.glcmc.com
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

table of contents

acronyms and glossary v

foreword xii

executive summary xiii

1. SHAPING RWANDA’S FUTURE 1

Introduction 1
The context for EDPRS2 2
The Changing Face of Poverty Reduction Strategies 2
Achievements under EDPRS 1 3
Steady Growth across all sectors 3
Gains in Income and Non-Income Poverty Reduction 6
Emerging Challenges for EDPRS 2 10
Opportunities for EDPRS 2 12
Principles of EDPRS 2 14
Structure of the EDPRS 2 Document 17

2. ECONOMIC TRANSFORMATION 18
Introduction 18
What is Economic Transformation? 18
Strategic Framework for Economic Transformation 19
Five Priority Areas 22
Priority 1: Increase the domestic interconnectivity of the Rwandan economy 22
through investments in hard and soft infrastructure
Priority 2: Increase the external connectivity of Rwanda’s economy and 22
boosting exports
Priority 3: Transform the private sector by increasing investment in priority 22
sectors
Priority 4: Transform the economic geography of Rwanda by facilitating and 22
managing urbanisation for increased growth countrywide
Priority 5: Pursue a ‘green economy’ approach to economic transformation 23

3. RURAL DEVELOPMENT 40
Introduction 40
What is Rural Development? 40
Strategic Framework 42
Strategic Framework for Rural Development 42
Four Priority Areas: 44
Priority Area 1: Integrated Approach to Land Use and Human Settlements 44
Priority Area 2: Increase the Productivity of Agriculture 44
Priority Area 3: Enabling Graduation from Extreme Poverty 44
Priority Area 4: Connecting Rural Communities to Economic Opportunity 45
through Improved Infrastructure

i
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

4. PRODUCTIVITY AND YOUTH EMPLOYMENT 60

Introduction 60
What do Rwandans do? 61
Who doesn’t work in Rwanda? 62
What is Productivity and Youth Employment? 63
Strategic Framework 64
4 Priority Areas for Productivity and Youth Employment 65
Four Priority Areas 66
Priority 1: Skills and Attitudes 66
Priority 2: Technology 66
Priority 3: Entrepreneurship, Access to Finance and Business Development 66
Priority 4: Labour Market Interventions 67

5. ACCOUNTABLE GOVERNANCE 76
Introduction 76
What does Accountable Governance mean for Rwanda? 76
Strategic Framework 77
2 Priority Areas of Accountable Governance 78
Priority Area 1: Strengthening Citizen Participation, awareness and demand 79
for accountability
Priority Area 2: Service Delivery 80

6. FOUNDATIONAL AND CROSS-CUTTING ISSUES 83

Introduction 83
Foundational Issues 83
Macroeconomic Stability 83
Demographic Issues 83
Food Security and Malnutrition 84
Early Childhood Development (ECD) and Basic Education 85
Improving Quality, Demand and Accessibility of Healthcare 86
Rule of Law, Unity and Reconciliation, Security and Stability 87
Strengthening the Effectiveness of Public Finance Management (PFM) 88
Consolidating Decentralisation 89
Cross-Cutting Issues 90
Capacity Building 90
Environment and Climate Change 91
Family and Gender 92
Regional Integration 93
HIV/AIDS and NCDs 93
Disaster Management 94
Disability and Social Inclusion 95

7. IMPLEMENTATION AND MONITORING AND EVALUATION 96

Implementation 96
Sequencing of Actions 96
Roles and Responsibilities 97
Communication for Ownership and Participation in Implementation 98
Monitoring and Evaluation 99
Principles 99

ii
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Monitoring Plan 100

Monitoring Tools 101
Evaluation Plan 102
Institutional Arrangements 102
Institutional Arrangements – Evaluation 103
Capacity Development 103

8. MACROECONOMIC FRAMEWORK AND COSTINGS 108

Macroeconomic Framework 108
The Real Sector 108
The External Sector 110
The Fiscal Accounts 111
The Monetary Sector 112
The Cost of Implementing EDPRS 2 112
Total Costs for EDPRS 2 initiatives 113
Breakdown of Costs by Thematic Area 113
Breakdown of Costs by Foundational Issues 118
Breakdown of Costs by Sector 120

ANNEX 1 THEMATIC PRIORITIES AND OUTCOMES MATRICES 122

Economic Transformation 122
Rural Development 127
Productivity and Youth Employment 130
Accountable Governance 131

ANNEX 2 EDPRS MONITORING MATRIX 133

ANNEX 3 EDPRS 2 MONITORING MATRIX SECONDARY INDICATORS 138

(Baselines and targets to be developed in EDPRS 2) §

ANNEX 4 DISTRICT ECONOMIC TRANSFORMATION PRIORITIES 139

iii
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

tables and figures

Table 1.1 Key Vision 2020 Targets 2

Table 1.2: Output and Growth Rates 2008 to 2012 4

Figure 1.1 Sector Output and Shares of GDP 5

Figure 1.2 Domestic and Foreign Investment as a Percentage of GDP 6

Table 1.3 Targets and Achievements of EDPRS1 8

Table 1.4 Poverty & Extreme Poverty Headcount (EICV 3) 10

Figure 1.3 Level of Poverty by District (EICV 3) 11

Table 1.5 Summary of Thematic Areas and Priorities for EDPRS 2 16

Figure 2.1 Opportunity Areas for Prioritisation under EDPRS 2 20

Figure 2.2 Approach used to develop the Vision and Priority Areas for the Economic 21
Transformation Strategy

Figure 2.3 Projected decline of cost of energy as key projects mature 25

Figure 3.1 Poverty Reduction Projections (MINECOFIN) 42

Figure 3.2 Rural Development Strategic Framework 43

Table 3.1 Road Development (Transport Sector Strategy 2012) 55

Figure 4.1 Large increases in Employment and Students 63

Figure 4.2: Strategic Framework for Productivity and Youth Employment 65

Figure 5.1 Approach Used to Develop the Objective and Priority Areas for the
Accountable Governance Strategy 78

Figure 6.1 CFSVA 2012 Nutrition and Food Consumption Map 84

Table 7.1 Institutional Arrangements for EDPRS 2 Coordination, Monitoring 105

and Reporting

Table 8.1 Output and Growth Rates under Optimistic Scenario 108

Figure 8.1 Sector Growth Rates and Shares of GDP 109

Figure 8.2 Public and Private Investments as a Percentage of GDP 110

iv
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Figure 8.3 Exports, Imports and the Current Account (percentage of GDP) 110

Figure 8.4 Government Revenues as Percentage of GDP 111

Figure 8.5 Government Expenditures and Fiscal Deficit 112

Table 8.2 Total Cost of EDPRS 2 Showing Thematic Areas and Foundation
Sectors (RwF million) 113

Table 8.3: Total costs by Thematic Area (RWF million) 114

Figure 8.6 Percentage Share of Total Thematic Costs over the Duration of EDPRS 2 114
by Thematic Area

Table 8.4 Breakdown of Economic Transformation Thematic Area by Sectors 115

(RwF million)

Figure 8.7 Percentage Contribution of Sectors to the Cost of Economic Transformation 115

Table 8.5 Breakdown of Rural Development Thematic Area by Sectors (RwF million) 116

Figure 8.8 Percentage Contribution of Sectors to the Cost of Rural Development 116

Table 8.6 Breakdown of Productivity and Youth Employment Thematic Area by

Sectors (RwF million) 117

Figure 8.9 Percentage Contribution of Sectors to the Cost of Productivity

and Youth Employment

Table 8.7 Breakdown of Accountable Governance Thematic Area by 118

Sectors (RwF million)

Table 8.8 Breakdown of Costs of Foundational Issues by Sectors (RwF million) 118

Figure 8.10 Percentage Contribution of Sectors to the Cost of Foundational Issues 119

Table 8.9 Total Cost of EDPRS 2 by Type of Expenditure (RwF million) 119

Figure 8.11 Percentage Share of Different Types of Projects in EDPRS 2 Costs 120

Table 8.10 Education Agriculture Health 121

Boxes:

Box 1.1 Five Lessons to Build on from EDPRS 1 15

v
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

acronyms and glossary

AIDS Acquired Immunodeficiency Syndrome

BCC Behaviour Change Communication

BLCF Business Linkages Challenge Fund

BDF Business Development Fund

BNR Banque Nationale du Rwanda/ National Bank of Rwanda

BPO Business Process Outsourcing

BRD Banque Rwandaise de Développement/ Rwanda Development Bank

BRT Bus Rapid Transit

CFSVA Comprehensive Food Security and Vulnerability Assessment

CBO Community Based Organisation

CCIs Cross Cutting Issues

CEPGL Communauté Economique de Pays de Grands Lacs/ Economic Community for

Great Lakes Countries

COMESA Common Market for Eastern and Southern Africa

CIP Crops Intensification Programme

CSO Civil Society Organisation

CPAF Common Performance Assessment Framework

CRC Citizen Report Card

DPCG Development Partners’ Coordination Group

DDP District Development Plan

DRC Democratic Republic of Congo

DRR Disaster Risk Reduction

EAC East African Community

vi
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

EARP Electricity Access Rollout Programme

ECD Early Childhood Development

EDPRS Economic Development and Poverty Reduction Strategy

EICV Enquête Intégrale sur les Conditions de Vie des ménages (Integrated Household
Living Conditions Survey)

EWSA Energy, Water and Sanitation Authority

FARG Fonds d’Assistance Aux Rescapés du Génocide / Genocide Survivors Assistance

Fund

FDI Foreign Direct Investment

FFS Farmer Field Schools

FONERWA National Fund for Environment and Climate Change

GBV Gender Based Violence

GDP Gross Domestic Product

GoR Government of Rwanda

Ha Hectare

HIMO Haute Intensité de Main-d’œuvre/ Labour Intensive Works Program

HIV Human Immunodeficiency Virus

HLIs Higher Learning Institutions

ICT Information and Communication Technology

IDEC Industrial Development and Export Council

IFC International Finance Corporation

IFPRI International Food Policy Research Institute

ILO International Labour Organization

IT Information Technology

JADF Joint Action District Forum

vii
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

JBSR Joint Budget Support Review

KIST Kigali Institute of Science and Technology

KLP Kigali Logistics Platform

Km Kilometre

Kwh Kilowatt hour

LAIS Land Administration Information System

LTR Land Tenure Regularization

M&E Monitoring and Evaluation

MDG Millennium Development Goal

MFI Microfinance Institution

MIFOTRA Ministry of Public Service and Labour

MIGEPROF Ministry of Gender and Family Promotion

MINAFFET Ministry of Foreign Affairs and Cooperation

MINAGRI Ministry of Agriculture

MINALOC Ministry of Local Government

MINEAC Ministry of the East African Community

MINECOFIN Ministry of Finance and Economic Planning

MINEDUC Ministry of Education

MINICOM Ministry of Trade and Industry

MININFRA Ministry of Infrastructure

MINIRENA Ministry of Environment and Natural Resources

MINISANTE Ministry of Health

MMT Mobile Money Transfer

MSMEs Micro, Small, and Medium Enterprises

viii
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

MW Mega Watt

MYICT Ministry of Youth and Information Communication Technology

NAEB National Agriculture Export Board

NCD Non Communicable Disease

NFA Net Foreign Assets

NGO Non-Government Organisation

NSC National Steering Committee

NTB Non Tariff Barriers

NICI III Rwanda National Information Communication Technology Policy and Action Plan
III 2011 - 2015

NISR National Institute of Statistics, Rwanda

ODA Overseas Development Assistance

OSBP One-Stop-Border Posts

OSC One Stop Center

PSCBS Public Sector Capacity Building Secretariat

PPD Public Private Dialogue

PPP Public Private Partnership

PRSP Poverty Reduction Strategy Paper

PSD Private Sector Development

PSDS Private Sector Development Strategy

PTA Prospective Target Areas

PMTCT Prevention of Mother-To-Child Transmission

PWD People with Disabilities

RBM Results-Based Management

RLDSF Rwanda Local Development Support Fund

ix
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

RDB Rwanda Development Board

RDRC Rwanda Demobilisation and Reintegration Commission

REMA Rwanda Environmental Management Authority

RHA Rwanda Housing Authority

RNRA Rwanda Natural Resources Authority

RSSB Rwanda Social Security Board

RTDA Rwanda Transport Development Agency

RURA Rwanda Utilities and Regulatory Agency

RwF Rwandan Franc

SACCO Savings and Credit Cooperative

SEZ Special Economic Zone

SMEs Small and Medium Enterprises

SMS Short Message Service (Mobile text message)

SWG Sector Working Group

SSP Sector Strategic Plan

TFP Total Factor Productivity

TVET Technical and Vocational Education and Training

TWG Thematic Working Group

UCS Ubudehe Credit Scheme

USD United States Dollar

VCT Voluntary Counselling and Testing

x
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

VSLA Voluntarily Savings and Loans Association

VUP Vision 2020 Umurenge Programme

WAN Wide Area Network

WDA Workforce Development Authority

WUA Water Users’ Association

YEGO Youth Empowerment for Global Opportunity

Glossary of Kinyarwanda terms

Abunzi Mediators

Agaciro Dignity

Akagari Cell (administrative unit)

Gacaca Truth and reconciliation traditional courts

Girinka One cow per poor family programme

Imihigo Performance contracts

Inteko z’Abaturage Citizen Forums

Ubudehe Community-based and participatory effort towards problem solving

mUbuzima Mobile phone application to link community health workers to a

national management information system

Umudugudu Village

Umuganda Community work

Umugoroba w’Ababyeyi Parents’ evening

Umurenge Sector (administrative)

xi
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

foreword

Rwanda has made good progress over the last two decades since the enormous challenges faced
in the aftermath of a genocide that destroyed the entire social and economic fabric of the country.
Rwandans have benefited from rapid economic growth, reduced poverty, more equality and increased
access to services including health and education. This has only been possible through the hard work
and dedication of millions of Rwandans supported by friends of Rwanda. Our progress strengthens the
belief that our development ambitions towards the Vision 2020 can be achieved with our concerted
efforts.

The Second Economic Development and Poverty Reduction Strategy (EDPRS 2) is a launch into the
home straight of our Vision 2020. We are faced with new challenges of ensuring greater self-reliance
and developing global competitiveness. Conscious of these challenges, we forge ahead knowing that
by working together, we always overcome.

The EDPRS 2 period is the time when our private sector is expected to take the driving seat in economic
growth and poverty reduction. Through this strategy we will focus government efforts on transforming
the economy, the private sector and alleviating constraints to growth of investment. We will develop
the appropriate skills and competencies to allow our people particularly the youth to become more
productive and competitive to support our ambitions. We will also strengthen the platform for
communities to engage decisively and to continue to develop home grown solutions that have been
the bedrock of our success. These are fundamental principles as we work to improve the lives of all
Rwandans in the face of an uncertain global economic environment.

As we take this important step ahead in our future, let us increase our determination to become makers
of history, to shape our development and elevate Rwanda into a new era of prosperity that will be
celebrated for generations through our joint efforts.

H.E. Paul KAGAME

President of the Republic of Rwanda

xii
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

executive summary

1. During the last ten years Rwanda has experienced one of the most exciting and fastest periods
of growth and socio-economic progress in its history. It was tenth fastest growing economy
in the world during the decade 2000 to 2009. At the same time more than a million people
have been lifted out of poverty. Population growth is stabilising and the country is making
great strides towards achieving the Millennium Development Goals and middle income status.
A perfect developmental “hat trick” of sustained economic growth (8% average), poverty
reduction (12% points) and a reduction in income inequality were achieved over the EDPRS 1
period. There were key lessons learned from the EDPRS 1 Self-assessment Report from both
success and shortcomings that have shaped the EDPRS 2 elaboration.

Positive Lessons Learned from EDPRS 1

2. Ownership of the EDPRS by a wide range of stakeholders at national level has been a key
factor of success. The EDPRS 2 has integrated inclusiveness and sustainability as driving
factors in elaborating the strategy.

3. Home-grown initiatives turned into success stories in strengthening the delivery of EDPRS 1.
These include: Umuganda (community work), Gacaca (truth and reconciliation traditional courts),
Abunzi (mediators), Imihigo (performance contracts), etc. Scale-up of home grown solutions
forms an integral part of the EDPRS 2 with particular focus on identifying innovations.

4. Community-based solutions, working closely with the population, have made possible fast-track
and cost effective implementation and increased demand for accountability, in education with
the 9YBE construction of classrooms, the Crop Intensification Programme (CIP) in agriculture,
and community based health care programmes. This approach supporting community
empowerment and involvement will be scaled up and supported in the EDPRS 2.

5. Use of ICT solutions improved service delivery. Some of the biggest successes in service delivery
and investment climate reforms have been centerd on ICT solutions such as online registration
of businesses, online filing of tax claims among others. The EDPRS 2 targets taking Rwanda
to the brink of middle income status requiring even greater performance in service delivery
from both public and private sectors. ICT is considered an important aspect in developing the
knowledge based economy.

6. An adequate institutional and legal framework for implementation, but with flexibility to change
or adapt has proven effective (e.g. RDB, REB, EWSA, etc). In many instances, merging institutions
with closely complementary mandates has reduced duplication of efforts and improved
coordination. Innovation within the institutional framework has been fully considered and teased
out in the EDPRS 2, key areas identified for reform geared towards increased efficiency of
delivery include: the National Employment programme, the Urbanisation and Rural Settlements
Institutional Framework and the Investment process.

xiii
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Lessons Learned on Shortcomings, Addressed in EDPRS 2

7. Some sectors at the end of EDPRS 1 still lacked exhaustive and well articulated strategies: the
EDPRS 2 has been developed based on a comprehensive elaboration process that included
stakeholders from the District level to the National level. The EDPRS 2 is developed taking into
consideration: 30 District Development Strategies, City Development Plan for Kigali City, 16 Sector
Strategies at National level and 4 Thematic Area Strategies.

Concurrent development of these strategies allowed for better streamlining of plans at all levels.

8. Insufficient coordination and communication across sectors as well as between central and local
government entities. In general, districts and sectors both expressed need for better sharing
of information and improved coordination for implementation among others. The EDPRS 2
introduced four Thematic Areas: Economic Transformation, Rural Development, Accountable
Governance and Productivity and Youth Employment. These thematic areas seek to level planning
and ensure that planning is driven by commonly understood goals and objectives. The focus
on joint planning and cross-sectoral action was further emphasised.

9. Insufficient involvement of the private sector in some areas affected the quality of policy dialogue
and engagement of private sector in implementation. The EDPRS 2 required that every sector
identify private sector players and engage them in developing their respective strategies. This
was achieved and taken forward as a principle for the EDPRS 2 including the refinement of Public
Private Dialogue and the adoption of private sector investment targets for line Ministries.

10. Mainstreaming cross cutting issues needed strengthening. While Sectors and Districts
acknowledged progress in integrating cross cutting issues they also highlighted the need for
more tools and guidance on effectively mainstreaming cross cutting issues into their plans,
budgets and M&E. The EDPRS 2 considered guidelines from lead institutions on all seven cross
cutting issues for integration into Thematic, Sector and District Strategies. The development and
collection of specific disaggregated indicators will be further developed moving forward.

11. Weak M&E systems. Districts and sectors pointed out the need for an integrated M&E system that
links the different sub-systems. By developing a strong linkage between M&E outcomes from the
thematic, to sector and district level, the EDPRS 2 provides a platform for increased effectiveness
of the M&E system. The planned introduction of an integrated electronic M&E system for District
and National level will further facilitate the M&E process during EDPRS 2.

Rationale for the EDPRS 2 Elaboration

12. Challenges: A range of challenges confront medium and long term development aspirations but
are balanced by exploitable opportunities. Poverty and inequality are high; land, a basic resource
for many people’s rural livelihoods and for new productive activity, is pressured by increasing
population density and demographic trends and the growing youth share of population requires
200,000 jobs to be created each year. Yet the labour force is characterised by low skills and
productivity; the private sector is constrained by its small scale and lack of suitable infrastructure;
and delivery of development faces horizontal (across sectors) and vertical coordination (to district
to community) challenges.

xiv
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

13. On the other hand a number of opportunities exist; Rwanda’s favourable dependency ratio can
provide a demographic dividend based on its youthful labour force and the demands for goods
and services arising from increasing urbanisation. Domestic political and economic stability and
an attractive regulatory environment are positive for private investment and doing business. The
improving literacy and numeracy of the population provides the basis for a more skilled national
workforce. The existing decentralised modalities for development and service delivery, often
based on traditional institutions, are platforms for increased engagement of citizens in planning
and delivery. Increased regional integration can massively expand market potential and economies
of scale. Rwanda’s alertness and pro-activeness in environment mainstreaming can provide a
natural center for green growth and investment.

14. Under EDPRS 2, these challenges will be addressed and opportunities will be pursued through
the four Thematic Strategies of Economic Transformation, Rural Development, Productivity and
Youth Employment and Accountable Governance while continuing the success stories of
EDPRS 2 through Foundational Issues.

Thematic Area Priorities for EDPRS 2

Economic Transformation

15. This thematic area targets accelerated economic growth (11.5% average) and restructuring of the
economy towards more services and industry as we move towards middle income country status.
The main targets relate to: strategic infrastructure investment for exports, increased private sector
financing for increased exports coverage of imports, urbanisation and green economy approach
for sustainability. Five priority areas will spearhead this thematic strategy.

16. Priority 1: Increase the domestic interconnectivity of the Rwandan economy through investments
in hard and soft infrastructure by meeting the energy demand of the private sector; increasing
access to public goods and resources in priority sectors of the economy; and deepening the
integration of key value chains.

17. Priority 2: Increase the external connectivity of Rwanda’s economy and boosting exports
by building a new international airport, expanding RwandAir, and finalising planning for an
appropriate railway connection along the Central Transport Corridor to Dar- es-Salaam or to
Uganda; transforming Rwanda’s logistics system and strengthening export promotion.

18. Priority 3: Transform the private sector by increasing investment in priority sectors. The investment
process will target large foreign investors in priority sectors of the economy; accelerate measures
to increase long-term savings, transform the financial sector for increased access to long term
international and domestic financing for private sector, strengthen tax and regulatory reform to
spur medium and large enterprise growth and attract large investors.

19. Priority 4: Transform the economic geography of Rwanda by facilitating urbanisation and
promoting secondary cities. Six Secondary Cities will be developed as poles of growth and
centers of non-agricultural economic activities. This will require investment in specific hard and
soft infrastructure and strategic economic projects that will trigger growth of these cities and
enhance linkages to other towns and rural areas. Affordable housing will also be a key element of
increased attractiveness of these cities. Kigali will continue to be developed as a regional hub.

xv
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

20. Priority 5: Pursue a ‘green economy’ approach to economic transformation. The green economy
approach favours the development of sustainable cities and villages. Key innovations include:
piloting a green city, piloting a model mine and attracting investors in green construction
Interventions will focus on green urbanisation and the promotion of green innovation in industrial
and private sectors.

Rural Development

21. This thematic area is focused on ensuring that poverty is reduced from 44.9% to below 30% by
2018. This will be achieved through focus on increased productivity of agriculture which engages
the vast majority of the population and ensures sustainable poverty reduction.

Enhanced linkages of social protection programs will also be developed with particular attention to
increasing graduation. Four priority interventions will lead this strategy:

22. Priority 1: Integrated Approach to Land Use and Human Settlements. Two functions will be
strengthened in this priority. The overall land use allocation for development and the decentralised
process of land allocation and management. A major consideration is ensuring that rural
settlements are revisited to ensure greater access to economic opportunities and basic services.

23. Priority 2: Increase the Productivity of Agriculture by building on the sector’s comparative
advantage. The focus is therefore on irrigation and land husbandry, proximity advisory services
for crops and livestock and connecting farmers to agribusiness.

24. Priority 3: Enable Graduation from Extreme Poverty by monitoring graduation through a database
across social protection programmes, supporting financial products, services and literacy for the
poorest, strengthening Umurenge SACCOs, and improving the coverage and targeting of core
social protection programmes such as VUP. Graduation will also mean linking the poorest to
economic activity through the provision of skills.

25. Priority 4: Connect Rural Communities to Economic Opportunity through Improved Infrastructure.
Interventions will include a feeder roads programme and information and communications
technologies (ICT) expansion for rural areas with the aim of linking communities to markets, the
electrification programme, modern biomass and other cooking methods, and full coverage of
quality water and sanitation.

Productivity and Youth Employment

26. This thematic area is focused on ensuring that growth and rural development are underpinned
by appropriate skills and productive employment, especially for the growing cohort of youth. The
main objective is the creation of at least 200,000 new jobs annually. Four priority interventions
will lead the way.

27. Priority 1: Develop Skills and Attitudes by reviewing and reforming national education curricula,
establishing Sector Skills Councils, strengthening TVET, internships, promoting adult literacy and
short course basic skills training, a tripartite funding system for on-the-job training, and a youth
entrepreneurship mentoring programme.

xvi
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

28. Priority 2: Promote Technology with a focus on accelerating innovation by internet and mobile
phone infrastructure and improving ICT skills.

29. Priority 3: Stimulate Entrepreneurship, Access to Finance and Business Development by

increasing off-farm employment, productivity and new job creation driven by the private sector.
The government will consolidate, rationalise and expand different business support programmes
into an Integrated National Employment Programme to boost entrepreneurship and job creation.

30. Priority 4: Labour Market Interventions. Government will improve the efficiency of labour markets
by assisting job seekers match to match with job providers through Employment Service and
Career Advisory Centers.

Accountable Governance

31. The objective of this thematic area is to improve the overall level of service delivery and ensure
citizen satisfaction above 80%. It also focuses on increased citizen participation as a way of
ensuring ownership and feedback for efficiency and sustainability. The following strategic priority
areas for intervention have been identified:

32. Priority 1: Strengthen Citizen Participation and Demand for Accountability by using “home grown
initiatives” to promote citizen participation; using ICT and radio to promote participation and
development communication; strengthening the media and civil society organisations to better
fulfil their developmental role and strengthening administrative decentralisation.

33. Priority 2: Improve Service Delivery. To revitalise service delivery in the public sector as well as in
the private domain, the Government will embark on development of a customer- centerd service
delivery culture, the design of policies and the establishment of standards of Customer Services.

Foundational Issues

34. Foundational issues reflect long-term ongoing priorities where, in many cases, significant progress
has already been made during EDPRS 1. These shall be of continued focus for the nation in order
to lay a firm foundation for the emerging priorities designed and implemented under the thematic
areas.

a) Macroeconomic stability. Public investment will be targeted priority investments that

demonstrate strong linkages to enabling the growth of the economy, stimulating private
sector development, and poverty and inequality reduction. Prudent macroeconomic
policies will continue to be pursued.

b) Demographic issues: policies focused on sustainable population growth as evidenced in

the success of the reduced fertility and population growth will continue to be pursued.

c) Food security and malnutrition. This remains an important issue to be addressed through
coordinated, strengthened and scaled-up community based nutrition programmes and
information campaigns across the country.

d) Literacy, early childhood development and basic education. The objective is to have all
infants and young children fully achieve their developmental potential. More emphasis will

xvii
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

be put on the role of partnerships with the private sector to increase available options for
education.

e) Quality, demand and accessibility of primary health care. The EDPRS 2 will be on
improving the quality of health care services, including the management of hospitals,
while continuing to expand geographical and financial accessibility

f) Rule of Law, unity and reconciliation, security and stability (including regional peace and
stability). Domestic and regional peace and stability will play a significant role in Rwanda’s
development process. On-going measures will include strengthening the legal and policy
framework; and developing institutional capacity to respond to, investigate and prevent
crime. Furthermore, support to international and regional peacekeeping initiatives and
operations will be pursued. Unity and reconciliation will also be strengthened through
entrenching community based dialogue.

g) Strengthening effectiveness of public finance management. This will focus on the

continued increase of resource mobilisation from domestic and alternative sources
of finance, scaling up of the implementation of the Integrated Financial Management
Information System, enhancing capacity at the National and District levels.

h) Consolidating decentralisation. This will be pursued through deepening participatory,

democratic, accountable local governance systems, building capacity for effective local
service delivery, leveraging regional integration, using ICT to deliver services efficiently
and effectively, increasing citizen’s empowerment.

Cross Cutting Issues (CCIs)

35. These issues have been mainstreamed in all the sector strategies and district plans over the period
of EDPRS 2 include the following;

a) Capacity Building: through prioritising institutional and individual capacity development

within sectors and districts to deliver under each of the thematic areas and foundational
issues.

b) Environment and Climate Change: major areas of attention will be mainstreaming

environmental sustainability into productive and social sectors and reducing vulnerability
to climate change.

c) Gender and Family: The main issues include reducing poverty levels among men and
women, malnutrition, reducing gender based violence and other related conflicts at both
family and community level.

d) Regional Integration: This will be explored for increased access to trade, finance,
legislation, health regulation, agricultural standards, environmental safeguards and
education qualifications.

e) HIV/AIDS and NCDs through regular sensitisation regarding HIV, voluntary counselling,
testing, prevention of mother to child transmission, condom distribution.

xviii
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

f) Disaster Management includes investment in rapid response disaster management

equipment, early warning systems and awareness campaigns.

g) Disability & Social Inclusion include accessible infrastructure and information, media
practitioners will develop standards for reporting news accessible to people with
disabilities.

Consultations and Shareholders Views

36. Following the lessons learned from EDPRS 1, Sector Strategic Plans and District Development
Plans have been elaborated simultaneously to ensure coherence among the national planning
documents. They have been developed with a common direction on how each shall contribute to
meeting MDGs, 7YGP and Vision 2020. The figure below is a visual summary of the methodology
followed under EDPRS 2 elaboration.

37. EDPRS 2 is about each Rwandan playing his or her part in the development of the country and
all Rwandans benefitting from it. Hence the title: “uruhare rwacu, mu bukungu bwacu”. This has
been prioritised by the engagement of all concerned stakeholders right from the planning phase
in order to enhance implementation. In this regard, citizens were widely consulted to solicit their
views through forums such as Umuganda and focus group discussions.

38. A robust EDPRS 2 Communication Strategy was implemented under the theme: “GIRA IJAMBO”
that included various activities among others; a customised EDPRS 2 website (www.edprs.gov.
rw), toll free SMS line (2018) for contribution of ideas, road shows were conducted country-
wide with brochures, banners, billboards, radio and TV Spots. A theme song for the EDPRS 2
was also developed calling the youth to participate in their development. Activities under the
communication strategy are planned to go on for at least two years of EDPRS 2 implementation,
to ensure that majority of the population understand what EDPRS is about and thus own the
national development agenda.

39. Focus group discussions and consultative meetings have been held with the population
including: youth, private sector, civil society (international and local), academicians and students
to ensure all categories of the population were well informed and able to give their suggestions
as to how the EDPRS 2 should be shaped.

40. Overall guidance to the strategy was provided by the National Steering Committee composed
of Ministers, Province Governors and the Mayor of Kigali City assisted by a technical steering
committee composed of Permanent Secretaries and Development Partners.

Implementation and Monitoring and Evaluation

41. EDPRS 2 implementation will need to be well coordinated, focused and aggressive through
the various levels of operationalisation. This will require adequate sequencing (from short
-term to medium-term interventions) and inter-relatedness of actions under the thematic and
sector strategies and district plans, the clear assignment of responsibilities and roles in their
implementation, and coordination with non-state actors, especially insisting on the centrality of
private sector participation and national ownership.

xix
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

42. Implementation will prioritise foreign exchange savings (exports and expansion of available
products on local market to reduce import bill), increasing private sector investment involvement
and improving efficiency in the raising and use of public funds and rapid delivery in the public
sector.

43. Central government will continue to be responsible for coordination of Government programmes
to ensure effective implementation and monitoring of the EDPRS 2 and to ensure that national
level policies and local priorities are well aligned whereas local government will be responsible for
coordination of EDPRS 2 implementation at district level.

44. Given the M&E experience of EDPRS 1 and the results of the self-assessment, the EDPRS 2
framework has definitive M&E Plans. The Monitoring Plan is designed to facilitate tracking of
progress at the national level and also at the three levels of the EDPRS 2 conceptual framework
(Thematic, Sector and District levels) so as to ensure the evaluability of the EDPRS 2 both
during, and at the end of its implementation. Clear indicators have been defined and subsequent
implementation plans will be developed at all levels. These will guide annual planning and
budgeting. The development of an electronic M&E system will further facilitate the collection,
tracking and analysis of information. The evaluative function will be given greater importance
with a series of priority analytical work already identified to be conducted to inform the EDPRS 2
implementation.

45. The implementation of the EDPRS 2 has been costed by Districts, Sectors and Thematic areas.
The cost of delivery is estimated at RWF 9,929 Billion.

EDPRS 2 costs RWF

Cost of the initiatives linked to the thematic areas 4,738 billion

Cost of the initiatives in the foundation sectors 3,292 billion
Cost of support functions (such as wage bill, defence) 1,899 billion
Total government expenditure during EDPRS 2 RWF 9,929 billion

46. Financing the EDPRS 2 will require investment as a percentage of GDP to increase from 21.3%
in 2013 to 29.7% in 2017. Growth is expected to be driven by a scaling up of public investment
and measures taken to encourage private investment initially. Public investment will increase at
the beginning of the period to 15.0% of GDP in 2015 as the government undertakes strategic
investments to boost productivity and increase access to resources in priority sectors of the
economy, but will fall thereafter as the private sector becomes the driver of growth. Private
investment is expected to increase throughout the period reaching 15.4% of GDP in 2017, and
by the end of the period, private investment is expected to take over as the main source of
investment.

47. New and innovative sources of financing will be pursued including an increase in both external
debt and foreign direct investment, encouraging international capital flows, strategic government
portfolio management, setting up of equity funds, expanding the Agaciro sovereign fund and
attracting green economy financing. High non-debt inflows including Foreign Direct Investment
(FDI), other forms of foreign investment and remittances will ensure that the current account
deficit can be financed without resorting to exceptional financing whilst maintaining the Net
Foreign Assets (NFA) at four months of prospective imports of goods & services.

xx
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

1. SHAPING RWANDA’S FUTURE

Introduction
1.1 Rwanda is experiencing one of the most exciting and fastest periods of growth and socio-
economic progress in its history. It was the tenth fastest growing economy in the world during
the decade 2000 to 2009. At the same time more than a million people have been lifted out
of poverty. Population growth is stabilising and the country is making great strides towards
achieving the MDGs and middle income status.

1.2 Post genocide, adversity was turned into opportunity by creating a national vision i.e.
“Vision 2020” which is a translation of Rwandans’ aspirations for the future of their country
and society. The Vision presents a framework and key priorities for Rwanda’s development
and a guiding tool for the future, and is ambitious to overcome poverty and foster unity and
reconciliation. Vision 2020 has been made operational by a series of medium-term national
Poverty Reduction and Economic Development Strategies.

1.3 The energy and determination invested in the concept and implementation of the Vision
generated an economic recovery which has dramatically impacted on growth, incomes and
poverty. Long-term indicators tell the story of socio-economic rebound after a major upheaval.
Average annual economic growth averaged more than 10% in the decade after 1995. Since
2000, this momentum has been sustained culminating in a perfect developmental “hat trick”
of sustained economic growth, poverty reduction and a reduction in income inequality by the
end of the EDPRS 2 period. Despite the disruptions caused by the 2008-9 global financial
crisis, during 2005-11, annual economic growth grew by a robust 8%, annually, the headcount
poverty and extreme poverty ratios both fell by nearly 12 percentage points, taking a million
people out of poverty, and income inequality declined. In short, Rwanda has been “on the
move”, and has provided real improvements in living standards for its population.

1.4 This Second Economic Development and Poverty Reduction Strategy (EDPRS 2) is a five
year plan designed to accelerate the progress already achieved and to shape the country’s
development in the future. It will build on those policies from EDPRS 1 which have been
effective in accelerating growth, creating employment and generating exports. In addition,
EDPRS 2 will innovate determinedly to strengthen policy and strategy approaches and to
ensure continuing achievement by more engagement of the private sector.

1.5 The overarching goal for EDPRS 2, derived from the Vision’s long-term goal of “creating a
productive middle class and fostering entrepreneurship” is:

Overarching Goal of EDPRS 2

“Accelerating progress to middle income status and better quality of life for all
Rwandans through sustained average GDP growth of 11.5% and accelerated reduction
of poverty to less than 30% of the population”

1
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

1.6 The EDPRS 2 is guided by the revised targets of the Vision 2020 adopted in May 2012 which
clearly outlined the objectives to be achieved as a pre-requisite for rapid growth and poverty
reduction.

Table 1.1 Key Vision 2020 Targets

Objectives Vision 2020 targets

Rapid economic growth to middle income status w GDP per capita of $1240
w Avg. GDP growth of 11.5%
Increased poverty reduction w Poverty reduced to 20%
w Extreme poverty eliminated
More off-farm jobs, more urbanisation w 3.2 million off-farm jobs
w 35% of population urban
Reduced external dependency w Exports growth of 28% p.a.
Private sector as engine of growth w Private sector takes dominant share
of investment

The context for EDPRS2

The Changing Face of Poverty Reduction Strategies

1.7 Vision 2020 has been converted into action by a series of medium-term strategic plans. The
first was the Poverty Reduction Strategy (PRSP) finalised in 2001, which covered the period
2002-6. This was the Government of Rwanda (GoR)’s first systematic assessment of the
actions needed to reduce poverty and generate pro-poor economic growth. It was followed
by the first Economic Development and Poverty Reduction Strategy (EDPRS) covering the
period 2008-12.

1.8 PRSP 2002-6 was elaborated in a post-conflict environment where the main emphasis was on
managing a transition from emergency relief to rehabilitation and reconstruction. Six broad
areas were identified as priorities for action: rural development and agricultural transformation:
human development, economic infrastructure; governance, private sector development and
institutional capacity-building.

1.9 Despite strong economic growth, poverty fell during the PRSP period by only 2.2 percentage
points. More than half the population continued to live below the national poverty line. Extreme
poverty1 fell by 4.2 percentage points between 2001 and 2005, but still afflicted more than
one third of the population. While income inequality as measured by the Gini coefficient, rose
from 0.51 to 0.52.

1.10 In terms of non-income poverty, the PRSP was much more successful. Infant, under-five and
maternal mortalities all decreased by 20-30%. Progress has continued under EDPRS so that by
2012 the associated health MDG targets for 2015 had already been achieved or were on track.
Access to education has improved with the implementation of the nine year basic education
program while completion rates have also increased significantly for both boys (79%) and girls

1 Defined as the income required to provide food requirements of 2,100 calories per day

2
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

(82%) by 2012. Governance progress was made through a range of constitutional reforms, the
holding of presidential and legislative elections in 2003, local elections in 2006 and the roll-
out of the gacaca community courts to resolve the post- genocide legacy.

1.11 EDPRS 1 (2008-12) marked a distinct change in the approach to development. A key conclusion
of the PRSP experience was that the social sectors (particularly health and education) had
been well addressed, but the real economy i.e. the sectors dealing with the production of
goods and services, had not. Priority was, therefore, given to accelerating growth, creating
employment and generating exports. These were to be catalysed through public investment
in infrastructure, and through regulatory reform. They were intended to reduce the costs and
risks of doing business and to create an attractive environment for private sector investment
and activity.

1.12 The policy and strategy focus under EDPRS 1 was, therefore to (a) accelerate growth and
diversification by giving a bigger role to the private sector, and (b) further decentralise
governmental functions to take developmental decision-making closer to the people,
accompanied by strengthened accountability mechanisms.

1.13 These priorities were reflected in three flagship programmes: the Programme for
Sustainable Growth for Jobs and Exports, the Vision 2020 Umurenge Programme (VUP), and
the Governance Programme. The VUP was aimed at providing a decentralised, integrated
programme designed to impact on rural poverty reduction.

Achievements under EDPRS 1

1.14 As mentioned, remarkable socio-economic progress has been made during EDPRS 1. The
economy grew strongly, and significant poverty reduction was achieved. Economic activity
was driven by a large increase in agricultural output, robust exports, and strong domestic
demand. Fortunately, Rwanda has remained relatively insulated from the slowdown in the
advanced economies. Though inflation rose sharply in 2011, it has still remained in single
digits and has been the lowest in the region. In 2012, high growth was sustained and inflation
remained relatively modest, although risks from instability in commodity prices and aid flows
remain.

Steady Growth across all sectors

1.15 Economic growth for the EDPRS 1 period 2008–2012 exceeded ambitious expectations. Real
GDP growth averaged 8.2% annually, which translated into GDP per capita growth of 5.1% per
year (Table 1.2).

3
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Table 1.2: Output and Growth Rates 2008 to 2012

Gross Domestic Product (GDP)

2008 2009 2010 2011 2012

GDP Rwf billions 2,879 3,059 3,280 3,551 3,833

constant 2010
prices

USD millions 4,938 5,246 5,625 6,089 6,573

constant 2010
prices

GDP per capita Rwf ‘000s, 293 302 315 331 348
constant 2010
prices

USD, constant 502 519 540 568 644

2010 prices

Annual Growth Rates

2008 2009 2010 2011 2012 Average

annual
growth
rate
Real Gross Domestic 11.2% 6.2% 7.2% 8.3% 8.0% 8.2%
Product (GDP)

Real GDP per capita 8.1% 3.2% 4.2% 5.2% 4.9% 5.1%

1.16 The economy experienced a short period of difficulty following the global financial crisis in
2008-9, when GDP growth fell to 6.2% in 2009. However, growth well in excess of population
growth returned during 2010-2012, permitting significant real increases in per capita incomes.
Rwanda was shielded from the worst effects of the global downturn because of its relatively
low level of integration with the worst affected western economies, and its fiscal stimulus
policies implemented in 2009 and 2010. Overall, the economy proved resilient to the global
dip in 2009, helped by a rebound in commodity prices for its exports.

1.17 Strong and balanced economic performance has derived from sustained growth across all
sectors of the economy. Services have been the main driver of growth. The sector grew at an
average of 10.0% per year and produced around 52% of national output during the EDPRS 1
period. The main expansion areas were telecommunications with increased mobile phone and
internet use, wholesale and retail trade and transport. Expansion of services accounted for
just over half of total GDP growth (53%) during the EDPRS 1 period.

4
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

1.18 The industrial sector grew at an average rate of 9.8% per year during EDPRS 1, driven by a
rapid expansion of construction, which grew at 15.0% annually. The industrial sector produced
15.4% of national output between 2008 and 2012. Investment flows for construction from the
Diaspora have been an important contributor. The rapid growth was achieved despite the
sector, in particular construction, being hit hard by the global downturn in 2009. Industrial
growth contributed 20% of total growth during EDPRS 1.

1.19 Agriculture grew at 5.4% sustained by higher than expected expansion of food production,
mainly thanks to scaled-up public investments such as the crop-intensification programme
(CIP). The agriculture sector contributed 32.7% of GDP and 28% of total growth.

Figure 1.1 Sector Output and Shares of GDP

5,000

4,500

4,000

Rwf 3,500
billions,
3,000
current
prices 51.7% 51.1%
2,500
52.8% 51.7% 52.8%
2,000
15.9%
16.3% Services
1,500
14.4% 15.0%
1,000 14.8%
Industry
500
32.4 33.9% 32.3% 32.0% 33.0%
0 Agriculture
2008 2009 2010 2011 2012

1.20 Thus, the highest growth rate was in the services sector, which remained the main contributor
to growth. Despite high rates of growth, structural transformation of the economy towards
higher productivity industry and services was limited during the EDPRS 1 period.

1.21 Strong performance of the productive sectors was underpinned by several key factors
supportive of business. Prudent and stable macro-economic and market-oriented policies
sustained business confidence. Regulatory frameworks were improved and enforced, thereby
facilitating business activity, providing transparency in government-private sector interactions.
A strong anti-corruption stance simplified and reduced the cost of business transactions. And
high levels of consumption and public investment, supported by international aid, fuelled
economic activity.

1.22 According to the World Bank’s Doing Business Report for 2012, Rwanda progressed from
58th to 45th position in the ease of doing business rankings worldwide. This performance
makes Rwanda the second most reformed economy in the world over the last five years
and the third easiest for doing business in Africa, as well as being the first in the East African
Community (EAC).

5
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

1.23 Gross investment in the economy averaged 22.5% of GDP from 2008 to 2012, just short of
the EDPRS target for 2012 of 24.4%. High levels of gross investment were achieved through
a scaling up of public investment which reached 12.8% of GDP in 2012. This was a major
component of government’s fiscal stimulus. A number of strategic infrastructure investments
to promote private sector growth were also identified and financing initiated.

1.24 In 2012, out of a gross investment of USD1,562 in the economy, USD876 million was public
investment and USD686 million was domestic private investment. USD160 million was
Foreign Direct Investment (FDI), a steep increase after hovering around USD100 million in
three out of the four years. In general, the increasing volumes of public investment were not
able to leverage significant additional FDI during this period.

Figure 1.2 Domestic and Foreign Investment as a Percentage of GDP

(Data labels show amounts in USD millions)

25.0% 23.5% 22.8%

22.3% 22.1%
21.7%
103
119 42 106 160
20.0%

617 576
686
15.0%
651 Foreign direct
607 investment (FDI)

10.0% Domestic private

investment

490 520 613 808 876 Domestic public

5.0% investment

Gross
0.0% Investment

2008 2009 2010 2011 2012

Source: MINECOFIN

Gains in Income and Non-Income Poverty Reduction

1.25 While Rwanda’s population is still growing, its rate of growth is stabilising. The provisional
results for the fourth Population Census for 2012 give a total resident population of 10.5 million,
compared with 8.1 million in the 2002 Census, implying an annual population growth rate of
2.6%. Population density has increased from 321 to 416 persons per sq.km between 2002 and
2012, the highest in Africa.

1.26 High growth rates combined with stabilising population growth has contributed to poverty
reduction. The poverty headcount ratio declined from 56.7% in 2005/06 to 44.9% in 2010/11
with significant poverty reduction experienced particularly in rural areas where the rate fell
from 61.9% to 48.7%.

6
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

1.27 The reduction in poverty was supported by a combination of improved agricultural incomes,
off-farm job creation, reduction in household sizes, and public and private transfers2.
Agricultural incomes were enhanced by productivity gains for staple and cash crops, and by
commercialisation in the agricultural sector, which covers more than 70% of employment.
Use of fertilisers tripled in tonnage terms from 2006 to 2011, and the share of marketed
agricultural output increased from 21.5% to 26.9%. At the same time, the number of non-farm
jobs increased by 50-60%.

1.28 Improved income levels resulted in reduced income inequality. The Gini coefficient, a
conventional measure of income inequality, declined from 0.52 in 2005/06 to 0.49 in 2010/11,
below the level in 2000/01 (0.51). Nevertheless, persistent inequality between men and
women in accessing economic resources remains one of the main challenges in addressing
rural poverty.

1.29 In terms of gender equality, Rwanda has continued to register progress. Women representation
in decision making positions makes Rwanda the world leader in the proportion of women in
Parliament (56.3%). In addition, a conducive policy and legal framework for mainstreaming
gender in socio-economic sectors at all levels is in place (existence of a national gender policy,
gender sensitive laws such as Gender Based Violence (GBV) law, inheritance law, land law,
etc.). Pro-poor and gender friendly programmes such Girinka were initiated as well as gender
mainstreaming programmes/projects such as the Gender Responsive Budgeting Initiative.

1.30 Increased monetisation of the economy and the rural world in particular, has led to reduced
financial exclusion. This has dropped significantly since 2008 (Finscope 2012). In 2008, 52%
of adults (i.e. 18 years or older) were financially excluded. By 2012, this had reduced to 28%.
In 2008, 21% of adults were served by formal finance institutions; and by 2012, this proportion
increased to 42%. The increase in inclusion has been helped by an uptake of banking products
offered by non-bank formal financial institutions (such as Umurenge SACCOs and insurance
companies).

1.31 Significant gains were also recorded in non-income dimensions of poverty. Child mortality
declined from 86 to 50 infant deaths per 1,000 live births, and maternal mortality from 750 to
476 per 100,000 live births between 2006 and 2011. More children attend school across the
country with net enrolment for primary school reaching 96.5%, and net enrolment for girls
being higher than for boys. Net enrolment for lower secondary school is still low, but gross
enrolment has increased from 10% to 48.6%. However, children from poorer families are far
less likely to attend secondary school than the better off, though the gap is closing. Access
to clean drinking water and sanitation increased in all provinces to 71% and 75% coverage
respectively.

1.32 Electrification has expanded to cover 13% of households, compared with 3% in 2006, but is
still largely limited to urban areas.

2 The Evolution of Poverty in Rwanda from 2000 to 2011, Results from the Household Surveys (EICV 3), NISR 6

7
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Table 1.3 Targets and Achievements of EDPRS1

Baseline Actual
Priority area Indicator Target 2012
2006 2011/12
Growth and 1. Real GDP growth (% 6.5 8.1 8.2 (2008-
poverty annual) 12)
reduction 2. Export growth (% annual) 10 15 25.1 (2008-
12)
3. National investment (% of 16.3 24.4 22.5
GDP)
4. Share of population living in 57 46 44.9
poverty (%)
5. Share of population living in 37 24 24.1
extreme poverty (%)
6. Poverty incidence among 60 48 47.0
people living in female-
headed households (%)
7. Employment in agriculture 80 70 71.6
(% reporting as main
occupation)
8. Number of new jobs 140,000 177,362
created
Widen and 9. Private Sector credit (% of 10 13.9 14.5
strengthen the GDP)
Financial Sector 10. Financial depth (broad 20 22.5 21.3
money/GDP)
Develop skills 11. Pupil/teacher ratio in 73:1 60:1 62:1
primary schools
12. Gross secondary school 10 30 38.0
enrolment
Raise agricultural 13. % of agricultural land 40 90 92.0
productivity protected against soil
and ensure food erosion
security 14. Area under irrigation 15,000 24,000 24,131
(hectares)
15. Use of mineral fertiliser 14,000 47,600 46,000
(MT)
16. Livestock in intensive 16 55 60
systems (%)
Land and 17. Forestry coverage (%) 20 22.7 24.5
Environment 18. Land titles issued 8,000 7 million 4.2 million
19. Area of land protected to 8 9.6 10.1
maintain biological diversity
(%)

8
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Baseline Actual
Priority area Indicator Target 2012
2006 2011/12
Build 20. Households with access 70,000 270,000 308,326
infrastructure to electricity (number of
households)
21. Electricity generation (off/ 45 120 110
on grid, MW)
22. Classified national road 11 63 68
network in good condition
(%)
23. ICT penetration rate (%) 26 40 44
Improve 24. Infant mortality (deaths per 86 70 50
health status 1,000 live births)
and reduce 25. Maternal mortality (deaths 750 600 476
population per 100,000 live births)
growth
26. Population covered by 70 90 89
health insurance schemes
(%)
27. Women aged 15-45 using 10 44 47.7
modern contraceptive
techniques (%)
28. Incidence of HIV among 15- 1 0.5 NA
24 year olds (%)
29. Total Fertility Rate (children 6.1 4.5 4.6
per woman)
Increase access 30. Access to safe drinking 64 83 74
to safe drinking water (% of population)
water and 31. Access to hygienic 38 63 74.5
sanitation sanitation
Strengthen 32. Share of population 85 100 68
governance, expressing satisfaction/
security and the confidence in decentralised
rule of law governance (%)

9
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Emerging Challenges for EDPRS 2

1.33 Head count and extreme poverty, though significantly reduced during EDPRS 1, remains high
and persistent, particularly in rural areas. Though poverty reduced more in rural areas than
urban areas in 2008-2011, poverty in rural areas still stands at 48.7%, compared to 22.1% in
urban areas (EICV). Although all provinces experienced reductions in poverty during EDPRS
1, there was significant variation in the level of poverty reduction between different districts
and in all provinces (Table 1.4). In Rwanda’s poorest district, Nyamagabe, 73% of people live
below the poverty line.

1.34 Rwanda’s poverty profile indicates that women are more affected by poverty than their
male counterparts, with 47% of female headed households being poor compared to 44.9%
of all households. A key challenge for EDPRS 2 is, therefore, to ensure sustained growth and
poverty reduction nationwide and among all groups. Focus is also required on the persistence
of poverty which remains high throughout the rural areas. The depth of poverty indicators,
i.e. the proportion by which poor households fall below the poverty line, show that despite
improvements, many households in rural areas are far below the poverty line while others
continue to be vulnerable to shocks particularly in the agriculture sector.

1.35 Rwanda also continues to have comparatively high inequality. Although inequality, as
measured by the Gini coefficient, has reduced in the last five years to a level lower than in
2000/2001 (EICV), it remains high when compared to other Sub-Saharan Africa countries.
Inequality will only continue to reduce if Rwanda can ensure that the poor and the extreme
poor, particularly in rural areas, have access to the benefits of economic growth and jobs, and
that they are not left behind in Rwanda’s development story.

Table 1.4 Poverty & Extreme Poverty Headcount (EICV 3)

2000/01 2005/06 2010/11
Province Extreme Extreme Extreme
Poor Poor Poor
Poor Poor Poor
Kigali City 22.7% 14.5% 20.8% 12.9% 16.8% 7.8%
Southern 65.5% 44.7% 66.7% 44.9% 56.5% 31.1%
Province
Western 62.3% 40.4% 60.4% 37.7% 48.4% 27.4%
Province
Northern 64.2% 46.5% 60.5% 39.1% 42.8% 23.5%
Province
Eastern 59.3% 39.4% 52.1% 29.9% 42.6% 20.8%
Province

Urban 28.5% 16.0% 22.1% 10.4%

Rural 61.9% 39.5% 48.7% 26.4%
Total 58.9% 40.0% 56.7% 35.8% 44.9% 24.1%

Source: EICV

10
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Figure 1.3 Level of Poverty by District (EICV 3)

1.36 Rwanda is the one of the most densely populated countries in Africa and land is perhaps
Rwanda’s scarcest resource. Rwanda’s demographic reality, whilst an opportunity, carries risks
and pressures for the Rwandan economy. Current population density in Rwanda stands at 416
people per square km (NISR 2012). More than ever the demographic shift necessitates better
use of scarce land resources, which today is dominated by smallholder farms. Smallholders
in rural areas hold four to five plots that make up a mean land size average of approximately
0.59 hectares, with the median value at 0.33 hectares. This restricts both the productivity of
land and the ability of rural populations to escape poverty. This enhances the need for modern
farming methods to increase agricultural productivity, increased off farm employment to
release land for scaled-up agriculture, and leveraging the process of urbanisation.

1.37 The demographic trend necessitates 200,000 jobs to be created each year for new entrants
into the workforce. This compares to a total of 396,000 waged jobs in the formal economy
today, meaning that Rwanda will need to see a significant increase in both formal and informal
jobs over the period of EDPRS 2. Only if Rwanda’s job market entrants are used productively
in the economy can Rwanda’s growth be sustained and accelerated. This in turn requires a
transformation of economic structures to spur the movement of people away from scarce
agricultural land into higher productivity non-agricultural activities that provide jobs and
facilitate the movement of people to urban areas.

1.38 Private sector growth and competitiveness is constrained by low skills and labour productivity
in all sectors of the economy. The number of formal sector firms reporting inadequate skills
as a major constraint has doubled since 2006, indicating that this is a growing problem. Lack
of skills is a particular issue for large firms with more than 100 employees, 45% of which
reported an inadequately educated workforce as a constraint in 2011. The 2009 National Skills
Audit reported an average 61.5% skills deficit and severe skills gaps in the private sector in
Rwanda.

11
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

1.39 The private sector needs transforming to enable it play its role as engine of economic growth.
The private sector is key to the economic transformation process. However, Rwanda’s private
sector remains small and nascent, dominated by micro and small enterprises (99.5% of firms)
which provide low returns to investment and struggle to grow. The activities of the private
sector have been highly undiversified though a recent increase in non-traditional exports such
as manufactures is gradually reducing dependency on a few traditional commodities (tea,
coffee, and mining).

1.40 Private firms and the process of structural transformation are constrained by key infrastructure
gaps. The most significant infrastructure constraint to all sizes of firms relates to electricity,
which is costly by comparison to the region (at $0.24/kwh compared to Kenya’s $0.15/ kWh,
Uganda’s $0.17/kwh, and Tanzania’s $0.05/kwh) and insufficient in quantity. Current installed
capacity is 110MW against an anticipated minimum demand of 563MW in the medium term.
In addition, Rwanda’s internal trade and the competitiveness of its exports are constrained by
an insufficient logistics system that has not grown parallel to the increasing demand for trade.
Rwanda is substantially dependent on its neighbours for land transportation of goods from
Mombasa and Dar es Salaam which is constrained by costly connectivity.

1.41 Transforming Rwanda’s economic structure will take time beyond EDPRS 2. In the meantime,
Rwanda needs to address the extensive challenges facing the rural population to make
inroads into poverty. The majority of the 9.1 million people living in rural areas today will
likely continue to live and work in rural areas during EDPRS2. Rural households are more
than twice as likely to be in poverty and extreme poverty, than an urban household. 62%
of waged farm workers are in poverty, compared with just 22% of waged off-farm workers.
Therefore, the EDPRS challenge of poverty reduction is more so a challenge of accelerated
poverty reduction in rural areas, in the context of the limitations of land, skills, infrastructure
and connectivity of rural populations.

1.42 The delivery challenges of EDPRS 2 require enhanced coordination and a step change in
the performance of the public and private sector. Service delivery is crucial for both the
public and private sectors and is part of government’s social contract with citizens. Service
delivery has been marked as an area for improvement where satisfaction with public services
was rated at 64.5% on average for all key sectors. With the anticipated increased role of the
private sector in contributing to growth and poverty reduction, quality of service delivery
and customer centerd services will take on more importance. Improving private and public
sector performance will require incentives and mechanisms for engaging private sector,
citizens and communities to provide input and feedback for enhanced delivery. During the
EDPRS 1 period significant achievements were registered and more could be delivered with
improved coordination and communication across sectors as well as between central and
local government entities.

Opportunities for EDPRS 2

1.43 While Rwanda’s development targets may seem ambitious, they remain achievable. Rwanda
has the potential to grow rapidly and to exceed the levels of growth, poverty reduction and
development experienced during EDPRS 1 if opportunities are sustainably exploited and
developed. The track record of past achievements has strengthened confidence and belief of
the population in their ability to deliver on development ambitions.

12
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

1.44 Rwanda is primed to reap the demographic dividend. Rwanda has just entered its
demographic window of opportunity, a period in which the age dependency ratio of the
population decreases, i.e. the number of dependents (young and old) decreases as a share
of the total population, thereby increasing the economic opportunities for its working age
population. The preliminary census results from 2012 show that population growth has
slowed in the last 10 years and the 2010 DHS showed that fertility rates have dropped from 6.1
children per woman to 4.6 between 2006 and 2010. However for this demographic potential
to be realised, productive employment opportunities have to be created, and competent and
skilled youth workforce has to be developed.

1.45 Growing urbanisation offers an opportunity for increased off-farm employment and
development of cities. According to the World Bank, Rwanda has the fastest rate of
urbanisation among African countries, with the proportion of people living in urban areas
increasing nearly threefold between 1990 and 2011. Urbanisation is widely associated with
increased off-farm activity, which would alleviate some of the pressures on the land from
rising population density. While the urbanisation rate is growing, the level remains relatively
low. This is a unique opportunity for Rwanda to avoid mistakes made by other middle income
countries by pro-actively managing the urbanisation process and mitigating risks of urban
sprawl, divided cities, high urban unemployment and high urban poverty.

1.46 A strong investment climate including stability, peace and security in the country is a
foundation for growing investment and trade. The continued reforms in the doing business
environment has laid the foundations for Rwanda to develop into a top investment and
trade destination within Africa. The prolonged period of peace and stability also provides a
reassurance to investors. To reinforce this opportunity, Rwanda will need to identify, prioritise
and strengthen viable export sectors.

1.47 Functioning decentralised systems provide a valid platform for citizen service delivery and
participation. Rwanda has a well functioning and detailed decentralised system that goes
to community level (Umudugudu). This includes a lot of community level engagement in
programmes like Ubudehe (social protection) and Umuganda (community works). These
existing home-grown systems can be strengthened and used as opportunities for real
engagement with the community where community development and policy related issues
can be discussed via appropriate feedback mechanisms.

1.48 Regional integration provides an outlet for Rwanda’s landlocked nature. With Rwanda now
a part of regional communities like the East African Community (EAC), Common Market for
East and Southern Africa (COMESA) and the Countries of the Great Lakes (CEPGL), a host
of markets and opportunities are opened if Rwanda invests in the right infrastructure for
increased connectivity. It also provides a forum for Rwanda to address and advocate for the
implementation of priority projects like the regional railway.

1.49 Rwanda as a leader in environment and climate change awareness is a natural center for green
investments. Rwanda has taken important steps at a high level to recognise the importance of
the environment and climate change. The adoption of the National Green Growth and Climate
Change Adaptation Strategy highlights the center stage this issue has taken in GoR policy
making. With the changing international environment giving more recognition of climate
change as a global issue, Rwanda stands to gain by moving rapidly and quickly to ensure
sustainability of interventions through environment mainstreaming, ecosystem protection
and rehabilitation as well as tapping into the growing international pool of green investments.

13
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

1.50 Growing financial literacy and inclusion is a pathway to increased savings and reduced
vulnerability. With more than 70% of the population now using a form of financial services,
the monetisation of the economy is increasing and the country is on path to increase savings,
integrate into regional and global markets and break the cycle of persistent and generational
poverty. More of the population will now be able to invest in their future through education
and entrepreneurship while reducing dependence.

Principles of EDPRS 2
1.51 The above presentation of Rwanda’s achievements, opportunities and challenges, together
with the lessons about the need for improved cross-sector co-ordination from EDPRS 1,
have resulted in the organisation of EDPRS 2 around four thematic areas, which reflect the
emerging priorities for EDPRS 2:

• Economic transformation for accelerated economic restructuring and growth striving for
middle income country status;

• Rural development to address the needs of the vast majority of the population and ensure
sustainable poverty reduction and rural livelihoods;

• Productivity and Youth Employment to ensure that growth and rural development are
underpinned by appropriate skills and productive employment, especially for the growing
cohort of youth;

• Accountable Governance, to underpin improved service delivery and citizen participation

in the development process

1.52 EDPRS 2 and its four thematic areas have been built from five principles derived from the
lessons and experience of EDPRS 1 and the overarching ambitions set for EDPRS 2. These
principles are:

• Innovation: emphasising new ways of thinking, working and delivering because the status
quo will not be adequate to achieve Rwanda’s ambitious targets.

• Emerging priorities: identifying thematic strategies which encompass new priorities,

including new ways of doing business, to drive the achievement of Vision 2020 targets.

• Inclusiveness and Engagement: creating ownership of development at all levels and

providing learning and feedback mechanisms to improve solutions.

• District-led Development: creating strong, mutually supporting linkages between district

and sectoral strategies, and supporting administrative standardisation and efficiency.

• Sustainability: ensuring that programmes and targets achieved from EDPRS 2 are
sustained over the long term in their economic, social and environmental dimensions.

14
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Box 1.1 Five Lessons to Build on from EDPRS 1

Ownership of the EDPRS by a wide range of stakeholders at national level has been a
key factor of success. The EDPRS 2 has integrated inclusiveness and sustainability as
driving factors in elaborating the strategy.

Home-grown initiatives turned into success stories in strengthening delivery of EDPRS

1. These include: Umuganda (community work), Gacaca (truth and reconciliation
traditional courts), Abunzi (mediators), Imihigo (performance contracts), etc. Scale up
of home grown solutions forms an integral part of the EDPRS 2 with particular focus
on identifying innovations.

Community-based solutions, working closely with the population, have made possible
fast-track and cost effective implementation and increased demand for accountability,
in education with the 9YBE construction of classrooms, the Crop Intensification
Programme (CIP) in agriculture, and community-based health care programmes. This
approach supporting community empowerment and involvement will be scaled up
and supported in the EDPRS 2.

Use of ICT solutions improved service delivery. Some of the biggest successes in
service delivery and investment climate reforms have centerd on ICT solutions such as
online registration of businesses, online filing of tax claims among others. The EDPRS
2 targets taking Rwanda to the brink of middle income status, requiring even greater
performance in service delivery from both public and private sectors. ICT is considered
an important aspect in developing the knowledge-based economy.

An adequate institutional and legal framework for implementation, but with flexibility
to change or adapt has proven effective (e.g. RDB, REB, EWSA, etc). In many instances,
merging institutions with closely complementary mandates has reduced duplication of
efforts and improved coordination. Innovation within the institutional framework has
been fully considered and teased out in the EDPRS 2, key areas identified for reform
geared towards increased efficiency of delivery include: the National Employment
programme, the Urbanisation and Rural Settlements institutional framework and the
investment process.

1.53 The thematic areas will coalesce the work of multiple sectors around a set of common
objectives (or outcomes), thereby increasing the likelihood of effective delivery. Together
with their sub-themes, the thematic areas are presented in (Table 1.5), and are elaborated in
the following chapters.

1.54 Recognising that Rwanda cannot lose focus on gains made during the last two decades,
the Foundational Issues area of EDPRS 2 have been put in place to sustain momentum on
areas that provide critical underpinnings for the thematic areas. The foundational issues
span a range of critical issues for Rwanda’s development including macro-economic stability,
food security and malnutrition, early childhood development and basic education, quality and
accessibility of primary healthcare, decentralisation and public financial management. They
represent areas that currently are not the new, emerging priorities in Rwanda’s economic

15
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

journey, but they are, nevertheless, key ingredients in the mix needed for the success of that
journey (see Chapter 6).

1.55 EDPRS 2 has involved much active District involvement in elaboration and expects to put
an increased focus on district implementation. EDPRS 2 purposefully places an equal focus
on Sector Strategic Plans and District Development Plans, and on the interface between
them, in order to move to a development model that is tailored to the differential needs of
different parts of the country. More details of district development transformational priorities
are provided in Annex 4.

Table 1.5 Summary of Thematic Areas and Priorities for EDPRS 2

Economic
Productivity and youth Accountable
transformation for Rural Development
employment creation Governance
rapid growth
1. Increasing 1. Integrated 1. Improving skills 1. Strengthening
the domestic approach to land and attitudes citizen
interconnectivity use and rural participation
2. Applying
of the economy settlements in delivery and
technology and
through demand for
2. Increasing the ICT.
investments in accountability
productivity of
hard and soft 3. Enhancing
agriculture 2. Service delivery
infrastructure entrepreneurship
3. Enabling and business
2. Increasing
graduation from development
the external
extreme poverty.
connectivity of 4. Improving
the economy and 4. Connecting rural labour market
boosting exports communities interventions
to economic
3. Transforming the
opportunity
private sector
through
by increasing
improved
investment in
infrastructure.
priority sectors
4. Transform
the economic
geography
of Rwanda
by facilitating
and managing
urbanisation
and promoting
secondary
cities as poles
of economic
growth
5. Pursuing a
‘green economy’
approach to
economic
transformation

16
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Structure of the EDPRS 2 Document

1.56 This structure of the following chapters of the EDPRS 2 document is as follows. Chapters 2-5
present the thematic areas of Economic Transformation, Rural Development, Productivity
and Youth Employment, and Accountable Governance. These will spearhead the innovations
and interventions to take place under EDPRS 2. These chapters explore the factors which are
expected to drive progress, and present the thematic areas objectives and the interventions
that will be applied to attain the objectives.

1.57 Chapter 6 presents the foundational and cross-cutting issues which underpin and span
the thematic areas. Chapter 7 sets out the implementation institutional arrangements that
will be put in place to execute EDPRS 2. The chapter includes a Monitoring and Evaluation
(M&E) plan, direction and timing for performance monitoring and evaluation to ensure that
objectives are achieved. Chapter 8 presents the macroeconomic framework for EDPRS 2 and
identifies EDPRS 2 costs and financing requirements.

17
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

2. ECONOMIC TRANSFORMATION

Introduction
2.1 The main objective of the Economic Transformation thematic area is to propose an ambitious,
prioritised and coherent cross-sectoral strategy to sustain rapid growth and facilitate
Rwanda’s process of economic transformation to meet Vision 2020 revised targets. This
strategy builds on a decade of sustained rapid economic growth and evidence of incipient
Economic Transformation in Rwanda’s economy. It is a process that encompasses all the main
sectors of the economy – private sector, agriculture, energy, transport, finance, urbanisation,
the environment and natural resources. Economic Transformation is impossible to achieve
without sustained rural development, improvements in skills and labour productivity, and
accountable governance. The detailed objective of the Economic Transformation thematic
area is:

Economic Transformation Objective for EDPRS 2

“Sustain rapid economic growth and facilitate the process of economic transformation
by increasing the internal and external connectivity of the Rwandan economy.

This will be achieved through improved infrastructure, exports, and more integrated
supply- chains, while meeting demand in the energy sector, planting the seeds of a
green economy, and better managing the process of urbanisation”

What is Economic Transformation?

2.2 Economic Transformation is the process of sustained high economic growth during which
the fundamentals of an economy change, shifting from a traditional and low productivity
agricultural base and a rural labour-force, to a more industrial, diversified and high productivity
urban economy. It is a multi-decade process, spanning one or two generations in the case of
fast growing East Asian economies, during which a country grows from lower income status to
a modern high-income economy, through changes in infrastructure, industries, technologies
and institutions.

2.3 While there is consensus on the direction and some of the ingredients of Economic
Transformation, there is no clear recipe for success. The main lessons this strategy takes from
recent research and the experience of other countries are: (i) governments play a pro-active
role in facilitating and accelerating the process of economic transformation; (ii) however, there
is no single recipe for success: other fast growing economies that have experienced economic
transformation relied on home-grown, often unconventional, policies; (iii) the process of
economic transformation is characterised by: greater international integration, increased
investment and savings, a stable macro-economic environment, a commitment to market
driven processes for resource allocation, increased urbanisation and the non-negligence of

18
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

environmental issues; and lastly (iv) targeting and prioritisation is important – in addition to
general incentives and securing a stable business environment, governments should identify
priority sectors in which they can improve hard and soft sector- specific infrastructure.

Strategic Framework for Economic Transformation

2.4 The overall targets for the Economic Transformation thematic areas for EDPRS 2 include: (i)
average GDP growth of 11.5% over the duration of EDPRS 2; and (ii) a change in Rwanda’s
economic structures reflected through increased investments, exports, savings, private
sector credit, and manufacturing, accompanied by an increase in urbanisation. In order to
achieve these high-level targets, the GoR proposes a comprehensive Economic Transformation
strategy that is framed around a multi-sectoral common vision and approach.

2.5 Given limited public resources and the sector/location-specific nature of economic
constraints, this strategy is based on the premises that a country’s journey to Economic
Transformation is impossible to achieve without strategic and pro-active involvement of
the public sector in catalysing private sector growth. Under EDPRS 2, the GoR will prioritise
general incentives to strengthen the business environment and alleviate high-level constraints
to the economy. It will also invest in soft and hard infrastructure in: a) priority sectors of the
economy, both existing and emerging; and b) geographic areas of opportunity.

2.6 Priority Sectors: This strategy prioritises interventions and investments in specific sectors
of the economy. These include: (i) existing export-oriented sectors; (ii) emerging sectors, in
particular in the knowledge economy; and (iii) potential new sectors of interest for Greenfield
investments, for which further research is necessary. The policy mix for each of these three
types of priority sectors is different:

• In existing sectors that have already contributed to boosting exports growth, many of
the sector-specific constraints are known and can be addressed through targeted soft
and hard infrastructure investments in order to maintain and/or further stimulate exports
growth.

• Emerging sectors will require intensive and targeted engagement with potential investors
in order to develop a clear understanding of what type of soft and hard public investments
are required to jump-start private sector investment in these sectors and attract FDI.

• GoR will earmark funding and build the institutional capacity to continuously explore
the market potential for new Greenfield opportunities, as yet unknown, with the aim of
developing a clear value-proposition for investment in Rwanda. Note that the prioritisation
of sectors will not preclude investment into other sectors that emerge as critical.

2.7 Priority sectors are summarised in Figure 2.1.

19
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Figure 2.1 Opportunity Areas for Prioritisation under EDPRS 2

Existing export-oriented Emerging opportunities Future Areas of

sectors Opportunity

1. Tea 1. Logistic Services 1. ‘Green economy’

initiatives
2. Coffee 2. ICT-related services
e.g. Business Process 2. Exploring the potential
3. Mining
Outsourcing of greenfield investments
4. Horticulture in new sectors
3. Private Equity fund base
5. Construction materials, for regional investments
based on locally sourced raw
4. Remote back-office
material
operations for financial
6. Tourism services such as retail and
7. Food processing & capital funds operations
beverages 5. Electronics assembly

2.8 Geographic Focus: this strategy will also target priority geographic areas for investment and
export promotion policies. The geographic focus of the Economic Transformation strategy
under EDPRS 2 can be broken down into three categories:

i Domestic: In order to reshape the economic geography of urbanisation and economic

development in Rwanda, geographic poles of investment have been selected based on a
comprehensive assessment of the economic potential of chosen secondary cities.

ii Regional: this Economic Transformation theme is based on the belief that the broader
EAC region will be one of the fastest growing regions of the world over the next
decade. Therefore, EDPRS 2 will prioritise deeper regional integration within the EAC
community and will focus investments on increasing connectivity to Rwanda’s economic
neighbourhood including DRC.

iii International: a strategic decision under EDPRS 2 is to deepen investment and export
promotion ties with the broader East and Southern Asia region, while continuing to invest
in growing ties with existing financial hubs. This geographic focus will help diversify
Rwanda’s export destination mix and grow inward foreign direct investment.

2.9 To meet the vision and achieve the high-level targets of Economic Transformation, the
thematic area has five priorities (see Figure 2.2). These are described and developed into
specific interventions in the following sections. These priority areas are impossible to achieve
without the foundational and cross-cutting factors such as macroeconomic stability, human
capital, access to education and health, gender mainstreaming, managing the demographic
dividend, strong public financial management and good governance (see Chapter 6 for more
details).

20
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Figure 2.2 Approach used to develop the Vision and Priority Areas for the Economic
Transformation Strategy

Economic Transformation Challenges that could Strategic Direction

pre-requires and jeopardise economic
characteristics transformation

1. Stable macro-economic 1. Unmet energy demand Prioritization:

environment 2. Limited and over- A. Sectors
2. Increased investment and concentrated exports 1. Existing export-
savings 3. Low FDI oriented sectors
3. Greater international 4. Weak logistics system 2. Emerging high-
integration potential sectors
5. Limited availability of
4. Commitment to market long-term savings and 3. Future areas of
driven processes for credit opportunity
resource allocation B. Geographic
6. Urbanization pressures
5. Increased urbanization 1. Domestic – secondary
6. Address environmental cities
issues 2. Regional – EAC & DRC
3. International – East &
South
4. Asia

The Economic Transformation Vision for EDPRS 2

“Sustain rapid economic growth and facilitate the process of economic transformation
by increasing the internal and external connectivity of the Rwandan economy. This will
be achieved through improved infrastructure, exports, and more integrated supply-
chains, while meeting demand in the energy sector, planting the seeds of a green
economy, and better managing the process of urbanization”

5 Priority Areas for Economic Transformation

1. Increase the domestic interconnectivity of the Rwandan economy through investments

in hard and soft infrastructure

2. Increasing the external connectivity of Rwanda’s economy and boosting exports

3. Transform the private sector by increasing investment in priority sectors

4. Transform the economic geography of Rwanda by managing urbanization and

promoting secondary cities

5. Pursue a ‘green economy’ approach to economic transformation

21
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Five Priority Areas

Priority 1: Increase the domestic interconnectivity of the Rwandan
economy through investments in hard and soft infrastructure

2.10 Rwanda’s high growth rate, combined with increasing population density, has put pressure
on the country’s connectivity infrastructure and on its national resources, in particular land.
The three main interventions for this priority area will be to (i) meet the energy demand of
the private sector; (ii) increase access to public goods and resources in priority sectors of the
economy; and (iii) deepen the integration of key value chains.

Priority 2: Increase the external connectivity of Rwanda’s economy and

boosting exports

2.11 Increasing the external connectivity of Rwanda’s economy and boosting exports is a key
priority of EDPRS 2 and a powerful tool to spur economic growth, raise living standards and
reduce poverty. To achieve this, this priority area proposes the following three interventions:
(i) bringing transformational change to Rwanda’s external connectivity by building a new
international airport, expanding RwandAir, and finalising planning for the establishment of
a railway connection; (ii) transforming Rwanda’s logistics system, with a strategic focus on
exports and re-exports to Burundi and Eastern DRC; and (iii) strengthening export promotion,
while investing in soft and hard sector-specific infrastructure to accelerate growth in the
commodity and tourism sectors, and facilitating the increasing export orientation of firms in
Rwanda’s manufacturing and agro-processing sectors.

Priority 3: Transform the private sector by increasing investment in

priority sectors

2.12 The small size of Rwanda’s formal private sector is a major limiting factor to future prospects
for economic growth. The private sector needs to undergo significant structural transformation
to be able to become the main driver of economic growth and create the large number
of jobs the Rwandan economy requires. The three proposed interventions to transform the
private sector will be to (i) strengthen the investment process to pro-actively target large
foreign investors in priority sectors of the economy; (ii) accelerate structural changes in the
financial sector by increasing long-term savings with the objective of increasing credit to the
private sector; and, (iii) significantly strengthening the business environment through tax and
regulatory reform to spur medium and large enterprise growth and attract large investors.

Priority 4: Transform the economic geography of Rwanda by facilitating

and managing urbanisation for increased growth countrywide

2.13 Urbanisation is being addressed as a new sector in EDPRS 2 because of its importance in
economic transformation and moving to a high productivity economy. Increasing income
segregation and over-concentration in Kigali, regional imbalances due to the small size
and limited development of secondary cities and weak national coordination of the urban
system have made sustainable urbanisation a key priority area for EDPRS 2. Rwanda is today
amongst the least urbanised countries in the world, but with one of the highest population
densities and urbanisation rates. To transform the economic geography of Rwanda and

22
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

manage the process of urbanisation, the strategy has three high level objectives: (i) integrated
development planning and management (ii) develop secondary cities as poles of growth (iii)
develop financing and supply options for affordable housing

Priority 5: Pursue a ‘green economy’ approach to economic

transformation

2.14 EDPRS 2 incorporates a ‘green economy’ approach to economic transformation - reducing

economic costs and benefiting future generations through exploiting new ‘green’ economic
opportunities. Significant resources are allocated to a number of high impact interventions
in priority sectors. Many of these will reduce costs, create jobs and also have large positive
environmental impacts. This priority area will focus on two targets related to (i) green
urbanisation and (ii) the promotion of green innovation in industrial and private sectors.

23
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Priority Area 1: Increase the domestic interconnectivity of the Rwandan

economy through investments in hard and soft infrastructure

2.15 Rwanda’s high growth rate, combined with increasing population density, has put pressure
on the country’s connectivity infrastructure and on its natural resources, in particular land.
To meet future demand and accelerate economic transformation, Rwanda needs to: (i) meet
the energy demand of the private sector; (ii) increase access to public goods and resources
in priority sectors of the economy; and (iii) deepen the integration of key value chains. To
achieve these three objectives, EDPRS 2 proposes interventions that will:

a) Increase Rwanda’s electricity generation capacity to 563 MW, leveraging large-scale

private sector investment;
b) Give preferential access to electricity, water, roads, and land to priority sectors of the
economy and/or large investors;
c) Increase inter-linkages between large firms and suppliers in priority sectors, leading to
increased investments by large firms in upstream activities

Outcome 1.1: Increased electricity generation capacity to 563 MW leveraging large-

scale private investment

2.16 To increase energy generation to meet projected future demand and better develop Rwanda’s
indigenous sources of energy, EDPRS2 proposes two measures: (i) the development of a
clear roadmap for investment in electricity generation; and (ii) a new approach to leveraging
private sector investment in the sector.

2.17 Investments and planning in the electricity sector under EDPRS 2 will be based on a clear
roadmap for investment aimed at delivering increased access to electricity and sufficient
generation to meet all of Rwanda’s energy demand. This roadmap will take a long-term view
as investments that are made now will impact on tariffs for many years to come. It will also
prioritise incremental improvements in energy generation rather than one big project that
might materialise in 5-7 years, thereby bringing forward the increase in generation capacity.
The objectives of this roadmap are to: (i) meet demand for electricity using a balanced mix
of energy sources; (ii) gradually eliminate subsidies to the electricity tariff, freeing up public
funds for other investments; and (iii) prioritise public investments with a clear view on when
and how funds are invested to ensure value for money (iv) reduce the cost of energy to
facilitate business.

24
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Figure 2.3 Projected decline of cost of energy as key projects mature

EWSA’s costs to serve (RWF/KWh)

220

200

180

160

140

120

100
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Source: EWSA, MININFRA

2.18 Public finance will also be used to de-risk electricity generation projects for the private
sector and thereby attract a wider range of investors on better terms. There are three
parts to this: (i) proving the technical and economic feasibility of resources in geothermal,
hydro, peat and methane (expected to cost over $100m in public investment), financed by
an energy development fund with donor support; (ii) putting in place systems to effectively
project demand for electricity; and (iii) restructuring the procurement process following the
guidelines of the Energy Policy (2012), shifting towards a more competitive and transparent
procurement strategy, minimising unsolicited proposals, and encouraging local private sector
involvement.

Outcome 1.2: Accelerated access to electricity, water, roads and land to priority
sectors of the economy and/or large investors

2.19 To stimulate investments in priority sectors especially by large firms and to reduce the risk
of delays in the delivery of electricity, roads or land to large-scale investments, three key
interventions are proposed: (i) creation of a task force with the authority to fast-track the
provision of public services and infrastructure for priority investment projects; (ii) an expansion
of targeted economic zones, including the finalisation of the Kigali Special Economic Zone
(SEZ) programme with an associated Technopole, and the development of four provincial
industrial parks; and (iii) development of a clear mechanism to guide the process of land
allocation for investment projects, based on a collaborative process between investors, the
Rwanda Development Board (RDB), relevant Ministries, districts and land owners.

2.20 To reduce delays and risks related to coordination failures and the pressure on existing
assets, the GoR will fast-track the provision of electricity, water, roads and land to priority
investments. Prioritisation will be coordinated and monitored by an inter- ministerial task
force, including the Rwanda Development Board (RDB). Ministries and the private sector will

25
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

have the option of calling upon this task-force to consider fast-tracking public service delivery
for specific or potential future investments in key priority sectors and by large firms.

2.21 The GoR will also improve access to public services by reviewing and finalising the SEZ
programme (including a Technopole in the Kigali SEZ) and investing in four provincial industrial
zones in Huye, Rusizi, Nyabihu and Bugesera. The delivery of these projects will contribute
to several national objectives under EDPRS 2: (i) facilitating access to key public services for
investors in priority sectors of the economy; (ii) attracting large firms and investors; and (iii)
reshaping the economic-geography of Rwanda by investing in economic zones outside the
capital.

2.22 A clear mechanism to guide the process of land-allocation for investment projects is currently
being developed, based on a collaborative process between investors, RDB, relevant Ministries,
districts and land owners. This mechanism will provide transparency and clarity on how
investors can navigate the process of accessing, leasing or purchasing land for investment
projects.

Outcome 1.3: Increased private sector investment targeted at strengthening value

chain inter-linkages in priority sectors

2.23 To further integrate value chains and support ongoing investments to strengthen inter-
linkages between processors and suppliers, two interventions are proposed: (i) a business
linkage challenge fund to leverage private sector investments in upstream activities in priority
sectors of the economy; and (ii) a supplier development programme.

2.24 To encourage private sector investment in the agro-processing sector, a Business Linkages
Challenge Fund (BLCF) will be established. The BLCF will allocate grants, on a competitive
basis, to large businesses that propose to support the strengthening of business linkages with
SMEs. This will provide new opportunities for growth, improving competitiveness and helping
them invest and create jobs.

2.25 Furthermore, a supplier development programme in the hospitality and tourism, retail,
construction services, agribusiness and mining sectors led by the RDB will also be established.
The purpose is to work with large domestic and foreign owned companies in Rwanda to
identify opportunities that address existing supply constraints through a combination of
company support and FDI promotion that would enhance the ability to compete in the EAC
and the wider global market.

Priority Area 2: Increasing the external connectivity of Rwanda’s economy

and boosting exports

2.26 Increasing the external connectivity of Rwanda’s economy and boosting exports is a key
priority of EDPRS 2 and a powerful tool to spur economic growth, raise living standards and
reduce poverty. During EDPRS 1, Rwandan exports increased at a very rapid pace more than
doubling between 2009 and 2011 in nominal terms. Nonetheless, as a share of GDP exports
of goods and services have remained low (13% of GDP in 2011) and have not grown on par
with imports, leading to an increase in the trade deficit reaching 19% of GDP in 2011. The

26
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

main issues Rwanda’s external sector faces are: (i) low external connectivity, characterised
by an airport operating almost at saturation capacity, no railway connection to the ports
of Mombasa or Dar es Salaam, and a deficient logistics (ii) costs related to the geographic
isolation and low connectivity of the economy, in particular high transportation costs and
non-tariff barriers; and (iii) the vulnerability of the export sector to terms of trade shocks due
to high concentration on few traditional exports.

2.27 For Rwanda to achieve the goal of 28% annual real exports growth, EDPRS 2 proposes to
prioritise interventions that will:

a) Bring transformational change to Rwanda’s external connectivity by building a new

international airport, expanding RwandAir, and finalising planning for the establishment
of a railway connection;

b) Transform Rwanda’s logistics system, with a strategic focus on exports and re-exports to
Burundi and Eastern DRC;

c) Invest in soft and hard sector-specific infrastructure to accelerate growth in the commodity
and tourism sectors, and facilitate the increasing export orientation of firms in Rwanda’s
manufacturing and agro-processing sectors.

Outcome 2.1: Increased trade through improved air and rail services to and from
Rwanda

2.28 EDPRS 2 prioritises two interventions to increase Rwanda’s external connectivity during
the 2012-2018 period: (i) Rwanda will complete phase 1 of the development of a major new
international airport in Bugesera by 2017; and (ii) invest in an ambitious expansion of RwandAir
during the EDPRS 2 period. The GoR will also pro-actively lead the effort to finalise planning
and procurement for a railway connection, for which construction will start before the end of
EDPRS 2.

2.29 Phase 1 of the development of Bugesera airport will be finalised by 2017, leveraging private
sector investment. Estimated to cost more than US$600m (phase 1) this airport will be the
single largest investment in Rwanda’s history and is the second most important infrastructure
priority after investments in the electricity sector. Bugesera International Airport will provide
an ultra modern airport for Rwanda with the flexibility to expand and develop to become a
hub airport within the East Africa region. Once completed, phase 1 of this airport will include
a 4.2km runway as well as cargo and passenger terminals capable of handling 3 million
passengers annually.

2.30 In addition to the airport, the GoR will also invest in an ambitious expansion of RwandAir
during the EDPRS 2 period. The GoR aims to make RwandAir a profit making company by
2018 and expand its annual turnover from the current US$46m to more than US$350m during
the same period. Objectives include: (i) to expand its fleet from 7 to 12 aircraft including 3
wide bodied aircraft; (ii) increase destinations from the current 13 to at least 25; (iii) achieve
and maintain IOSA certification, thereby strengthening operational management and safety

27
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

control standards; and (iv) significantly strengthen branding. Increased connectivity will
support Rwanda’s tourism sector and improve the country’s business environment.

2.31 Planning and procurement will be finalised for a railway link, connecting Rwanda to
neighbouring EAC countries, with construction to start before the end of EDPRS 2. The
GoR will initiate engagement with neighbouring EAC partners to finalise agreements on
the construction of a railway link. The objective under EDPRS 2 will be to finalise feasibility,
planning and procurement for railway by 2017, with an eye to starting construction before the
end of the EDPRS 2 period.

Outcome 2.2: Transformed logistics system with a strategic focus on exports and
re-exports to Burundi and Eastern DRC

2.32 The following interventions seek to transform Rwanda’s logistics system and strategically
position this system to strengthen Rwanda’s growing exports and re-exports to Burundi
and Eastern DRC. The proposed interventions include: (i) establishing an integrated logistics
system based on a Kigali Logistics Platform linked to Regional Logistics Centers; (ii) improving
the sea-land logistics system by building off-dock container depots; (iii) finalising One-Stop
Border Posts at all Rwandan border posts to facilitate both large and small-scale cross border
trade; and (iv) increasing efforts to remove Non-Tariff-Barriers (NTBs) on the Northern and
Central Corridors.

2.33 The key to transforming Rwanda’s logistic system will be the establishment of an integrated
logistics system based on a Kigali Logistics Platform, linked to Regional Logistics Centers and
supported by an e-freight exchange system. These centers, to be established in conjunction
with the private sector through PPP arrangements, will provide distribution and logistics
services at selected locations for transit goods arriving from Mombasa and Dar es Salaam,
with final destination in Rwanda, Eastern DRC or Burundi. The central part of this integrated
system is the Kigali Logistics Platform (KLP). This platform will have cross-docking features
for higher value products, and will serve DRC, Burundian and Rwandan traders. It will be
integrated to the Kigali SEZs and will be supported by an e-freight exchange system that
will provide information on truck-loads to operators, improving the efficiency of the system
and reducing coordination failures leading to trucks travelling empty. The KLP will be directly
linked to two Regional Logistics Centers in Rusizi and Nyabihu.

2.34 This will be complemented by improvements in the sea-land logistics system through the
building of off-dock container depots in Mombasa and Dar es Salaam. The inefficiencies of
the Mombasa and Dar ports significantly increase the cost and time for Rwandan exports. The
off-dock inland containers depots in Mombasa and Dar es Salaam will be built on land owned
by Rwanda to counter long port times, providing the opportunity to store and to engage in
value added services on products while waiting for on-dock processing. Management of the
container depots will be outsourced to a private operator.

2.35 Improvements to the logistics system will also include One Stop Border Posts (OSBPs) at
every Rwandan border, thereby facilitating both large and small-scale cross border trade.
This will reduce transportation costs and time for cross-border exports and exports using
land-sea routes through the Northern and Central Corridors. OSBPs are an interim measure

28
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

to reduce trade costs between countries, prior to the full implementation of the EAC common
market for goods in which trade is to be free-flowing.

2.36 Finally, the monitoring of NTBs needs to be institutionalised while continuing to work with
EAC countries and institutions to steadily reduce NTBs on the northern and central transport
corridors. This will reduce transportation costs and delays related to exports, imports and re-
exports. NTBs currently include port delays, weighbridges, corruption and lack of harmonised
standards. Monitoring of NTBs will be institutionalised within MINICOM and MINEAC thereby
better positioning Rwanda to negotiate the removal of NTBs both through the EAC forum
and bilateral agreements with neighbouring countries.

Outcome 2.3: Accelerated Growth of Exports

2.37 This strategy focuses on five major interventions to strengthen export promotion and enhance
sector-specific hard and soft infrastructure in key export sectors in line with decisions by
the IDEC forum (December 2012). These include: (i) review of the institutional set-up for
export promotion and strengthen the export promotion department at RDB; (ii) overhaul
Rwanda’s mining sector on the basis of a new mining law, a new mining model contract
for investors, and targeted investments in exploration; (iii) invest in a major tea expansion
programme, increasing the area under production by 18,000ha by 2018; (iv) engage in a large
and systematic expansion of extension services and capacity building in the coffee sector,
modelled on successful approaches tested domestically; and (v) finalise the Kivu belt and
invest in developing a tourism circuit.

2.38 The GoR will review the institutional set-up for export promotion and strengthen the
export promotion department at RDB, with the objective of becoming more pro-active at
targeting potential export markets and linking domestic firms to export opportunities. The
new institutional set-up, to be finalised by the start of EDPRS 2, will be based on shared
targets and clear responsibilities between RDB (the lead institution for export promotion)
and line Ministries/agencies, which will play a pro-active role in the entire export promotion
process, leveraging their sector-specific know-how and promoting export promotion
efforts overseas (see the new institutional arrangements for investment promotion under
Outcome 3.1). The new institutional set-up will be supported by a stronger export promotion
department at RDB, with greater resources (both human and capital) to conduct pro-active
export promotion activities in target markets. Specific programmes to link domestic firms
to export opportunities will include a US$5m export development fund to be managed and
tested by RDB and the continuation of the Trade Linkages Programme. This will help agro-
processing and manufacturing companies in Rwanda link with potential buyers in potential
export destinations, in particular in the region. Export Councils will be the channel through
which government and industry interact and collaborate towards the formulation of an export
‘vision’ for the various sub-sectors and assist in the identification and implementation of the
most appropriate levers with which to realise these visions.

2.39 The first sector specific intervention will be to overhaul Rwanda’s mining sector through
new regulations, systems and an enhanced understanding of mining resources. EDPRS 2
prioritises the finalisation and implementation of the Rwanda’s new Mining Law currently

29
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

under development. One of the main transformations this new law will bring is an overhaul
of the concessions strategy in the mining sector and the merging of the prospecting and
exploration licenses. This new legal framework will be strengthened by better information and
transparency about the sector and its potential. The GoR commits to increasing investments
in exploration in prospective target areas (PTAs) for mining, including petroleum exploration,
based on a clear exploration strategy. This improvement in the business environment will
be accompanied by measures to improve transparency in the sector and comply with
international best standards (including environmental standards).

2.40 In the tea sector, Government will support a large-scale tea expansion programme, expanding
the tea production area by 18,000ha. Areas for the new factories and tea plantations have
been identified in a number of districts in the south and west of the country where acidic
soils and agro-climatic conditions are ideal for tea production. The target is a doubling of tea
production in the country by 2018 by working with communities and farmers to support a shift
to tea production in 14,000ha of Greenfield sites in addition to 4,000ha in areas surrounding
existing factories or factories that are currently under development (five factories are currently
being built on 7,500ha of new tea plantations).

2.41 To increase productivity in the coffee sector, capacity building and research will be
intensified. The biggest constraint in the coffee sector is low productivity, largely caused by
sub-optimal agronomic practices and diseases/pests. The National Agriculture Export Board
(NAEB) is already in the process of extending training to 10,000 coffee farmers per year
using the Farmer Field School approach (FFS). Replicating capacity building models that
have worked can lead to transformational change in the coffee sector. Capacity building will
also be targeted at coffee washing stations, extending the 2010 Turnaround Programme and
building on its initial successes to support cooperatives.

2.42 Proactive targeting of export-oriented investment in new and emerging sectors: Business
tourism, BPO, financial services, and light manufacturing. Investment in knowledge-based
sectors will help to transform the economy and society of Rwanda, moving it away from
dependence on primary agriculture and farm-based jobs towards higher value- added
employment and middle incomes. Rwanda’s position as a multilingual country will also be
advantageous in attracting investments in Business Process Outsourcing (BPO) and financial
services (funds administration, retail support) which are potential employers of thousands of
youth. Light manufacturing will be explored particularly in IT assembly. Proactive targeting of
investors will be supported by ongoing research to assess and develop the required regulatory
reforms, skills, technology and infrastructure to fully exploit these sectors.

2.43 Finally, to enhance tourism in Rwanda the Kigali Convention Center and the Kivu Belt Tourism
Master Plan will be completed, significantly contributing to diversifying Rwanda’s tourism
offering. The Kigali Convention Center with world class conference facilities to be operational
in 2014 will be host to regional and international conferences that will stimulate demand and
exports from the service industry. Finalising the Kivu Belt road will also achieve a number
of key objectives under EDPRS 2: (i) connecting a number of important secondary cities to
domestic markets and Eastern DRC; (ii) spurring investments in the tourism sector along the
Kivu Belt; and (iii) creating a national tourism circuit, enabling travellers to combine a visit to
the Virunga National Park, Lake Kivu, Nyungwe Forest and other notable touristic sites in one
circuit.

30
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Priority Area 3: Transform the private sector by increasing investment in

priority sectors

2.44 In 2011, Rwanda’s formal private sector employed a mere 4% of the country’s labour force, and
only 0.5% of firms had more than 30 employees.3 The small size of Rwanda’s private sector is
a major limiting factor to future prospects for economic growth and economic transformation.
A cautionary sign of this was the falls in private domestic and foreign investment in 2010 and
2011. The private sector overall needs to undergo significant structural transformation to be
able to become the main driver of economic growth and create the large number of jobs the
Rwandan economy requires. Rwanda’s public sector can contribute to this transformation
through the following proposed interventions during EDPRS 2:

a) Strengthen the investment process to pro-actively target large foreign investors in priority
sectors of the economy;

Accelerate structural changes in the financial sector, in particular measures to increase long-term
savings, with the objective of increasing credit to the private sector to 30% of GDP by 2017;

Significantly strengthen the business environment through tax and regulatory reform to spur
medium and large enterprise growth and attract large investors.

Outcome 3.1: Increased private sector investment and financing

2.45 To radically increaese foreign direct investment in priority sectors of the economy especially by
large firms, this strategy identifies key interventions that will transform Rwanda’s investment
process, by: (i) strengthening the institutional set-up to lead the investment process; (ii)
transforming and better funding investment promotion with a revamped strategic focus; and
(iii) finalising and implementing the New Investment Code.

2.46 It is a national priority to strengthen the GoR’s institutional set-up to better manage the
investment process. The key to ensuring an effective institutional set-up to achieve national
investment targets is clarifying the roles and responsibilities of RDB and other ministries /
government agencies. Process reform, will be based on six principles:

• RDB will remain the lead institution on large foreign investment (both PPPs and general
FDI) and will consolidate specialised investment related competencies while line ministries
and related implementation agencies will play an active role in the entire investment
process, leveraging their technical sector specific know-how and supporting investment
promotion efforts overseas (investment process guidelines are currently being developed
in each sector);

• Sector related investment promotion targets will be the joint responsibility of ministries,
related implementation agencies and RDB (these targets will be reviewed during quarterly
meetings co-chaired by RDB and the respective ministry);

3 EICV 2 (2002)

31
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

• The incentive structure for RDB, ministries and implementation agencies will focus not
only on reaching investment targets (in terms of the value of the investment), but also
ensuring that Rwanda is attracting quality investors;

• There will be a clear distinction between the institutional set-up for PPP projects and
general FDI, as these entail different institutional roles and responsibilities;

• The strengthened institutional set-up will avoid duplication and ensure that the investment
process is consistent across government;

• The new institutional set-up will include a mechanism to resolve internal issues across
agencies/ministries in addition to the proposed task force to fast track the provision of
public services and investments for priority investment projects.

2.47 Transforming and better funding investment promotion will involve pro- actively targeting
markets, leveraging Rwanda’s network of commercial attachés, creating a core marketing
division within RDB, and funding research into emerging sectors. Increasing resources
to support targeted investment promotion over the next five years in addition to funding
research into the potential of new or emerging sectors in Rwanda, aimed at pro-actively
attracting investors in priority markets. Pro-activity will be achieved by:

• Creating an Investment Promotion Taskforce and a core Marketing Division within RDB to
pro-actively target key markets. The Marketing Division will have significantly enhanced
resources (people, funds, tools and systems). The Task-Force will oversee: a) investment
promotion activities; b) the activities of a network of outsourced agents, working together
with commercial attachés and diplomats; and c) allocate funding for research into the
feasibility of attracting investment in new sectors.

• Creating a research framework that RDB will use towards targeted research into the
potential for new or emerging sectors in Rwanda, either in response to growing interest
expressed by investors or by looking into new sectors with potential, in particular to
stimulate growth in the knowledge economy.

2.48 The New Investment Code will also be finalised, advertised and implemented during the
EDPRS 2 period. A new Investment Code with a robust package of incentives for investors
is currently under development. Options to be considered under the new Investment Code
include fiscal incentives with a sectoral or geographic focus, fiscal or alternative incentives
for exporters, incentives around capital gains and dividend taxation, and other incentives
to encourage firms to establish their international or regional headquarters in Kigali. The
Investment Code will ensure that domestic firms are not at a disadvantage when competing
in the market.

Outcome 3.2: Accelerated structural changes in the financial sector, in particular

measures to increase long-term savings and access to international
finance, with the objective of increasing credit to the private sector to
20.2% of GDP by 2018

32
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

2.49 To stimulate growth in long term savings and credit to the private sector EDPRS 2 proposes
interventions that will: (i) significantly increase long-term savings in the economy; (ii) contribute
to diversifying and intensifying credit to the private sector; and (iii) position Rwanda as a
potential regional financial service center.

2.50 To increase long-term savings this strategy supports expanding pension and contractual
saving funds, strengthening the RSSB, creating new collective investment schemes and
developing the bond market. The policy-mix to increase long-term savings will include: (i)
enactment of the Pension Law to establish the basis for private pension plans and improve
the financial sustainability of the RSSB; (ii) enactment of the Trust Law to change the
provisions for collective schemes to create a new range of investment options for Rwandans;
(iii) consolidating the RSSB by strengthening governance and administration; improving
investment management and performance; and strengthening risk and cash management;
and (iv) developing the bond market ensuring the regular issuance of government bonds to
give banks greater access to long-term funds.

2.51 An increase in savings will need to be accompanied by measures to stimulate credit to the
private sector, in particular by leveraging the credit guarantee programme and strengthening
credit history. The policy-mix to increase credit to the private sector will include: (i)
encouragement of commercial bank lending by testing and then exponentially increasing the
size and scope of the current BDF credit guarantee programme; and (ii) creation of a creditor
profile electronic system that will enable commercial banks to verify potential lenders’ credit
history.

2.52 Position Rwanda as an attractive financial service center in the region. Achieving this will
involve close cooperation between financial sector regulators, banks, and the Services
Development Department at the RDB. Policy options that will be considered include: (i)
favourable corporate income taxation for financial service firms; (ii) a review of withholding
tax on interests and dividends for firms in the financial sector; (iii) a review of capital gains
taxation; (iv) pro-actively attracting private equity funds for investments in the region; and (v)
the creation of a task force to coordinate efforts towards this objective.

Outcome 3.3: Strengthened business environment through regulatory reform to

spur medium and large enterprise growth and attract large investors
in priority and emerging sectors

2.53 To enhance the business environment for the private sector, EDPRS 2 will focus on (i) tax
reform, (ii) double taxation agreements, (iii) district level business environment reforms, (iv)
improving the insolvency process, (v) facilitating the free flow of highly skilled labour and (vi)
strengthening public-private dialogue mechanisms.

2.54 Tax reform with the aim of providing additional incentives for investment is a priority under
EDPRS 2 and will be carried out in conjunction with the passing of a new investment code.
Additional research, to be completed by December 2013, will identify potential interventions
to: (i) enact revenue enhancing reforms to restructure the corporate and personal income
tax system, leading to a reduction in rates but also an increase in the tax base; (ii) reform the
turnover tax rate for SMEs - currently SMEs opting for the simple lump- sum turnover tax face

33
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

very high marginal tax rates, making this taxation system highly regressive and putting them at
a significant disadvantage; and (iii) review VAT, withholding tax and non-deductible expenses
policies to ensure that they do not put domestic firms at a disadvantage but rather encourage
investment. In addition to research and the eventual implementation of these reforms, the
GoR will create Tax Business Advisory Panels to provide businesses with an opportunity to
voice their concerns over tax administration procedure and to suggest practical alternatives.

2.55 To position Rwanda as an attractive financial services investment destination, Rwanda will
pursue double taxation agreements with all strategic partners. Combined with targeted
initiatives under consideration in the new Investor Code, such as fiscal incentives for firms in
priority sectors, double taxation agreements will improve the attractiveness of Rwanda as an
investment destination.

2.56 EDPRS 2 will focus on district-level business environment reforms targeted at alleviating
licensing constraints, access to land and construction permits. In coordination with districts,
RDB will study options to apply national level business reforms at the district level. Areas that
require further research include: (i) reducing the time and cost for the delivery of operating
permits at the district level, potentially through the creation of RDB One Stop Centers (OSCs)
within district offices; (ii) better coordination of the forced closure of a business across
government institutions; (iii) accelerating the process of land acquisition for private investors;
and (iv) accelerating the implementation of OSCs for construction permits in districts.
Research is to be completed by December 2013 and will result in a clear, timed and targeted
plan to address some of the major constraints companies face at the district level.

2.57 At the national level, Doing Business reforms will be strengthened by improvements in the
insolvency process. A good rate of business failure can be an economic asset to a country
(sometimes known as “creative destruction”), provided bankruptcies do not tie up large
amounts of capital in failed businesses thereby creating ‘blockages’ in the financial system. To
address this, a programme of reform will be implemented which should include: expediting
bankruptcy procedures; developing a framework for out-of-court debt negotiations;
developing methods for insolvency laws. An improved insolvency regime will further
strengthen Rwanda’s Doing Business brand.

2.58 Rwanda will also build on its on-going policy to improve the free flow of highly skilled
labour from within and outside the EAC. Rwanda’s immigration policy has proved successful
in attracting high skilled labour from the region and abroad and has played a significant
role in alleviating the skills constraints, in particular in the finance, professional services and
manufacturing sector. This policy will be extended and strengthened during EDPRS 2. The
EAC Common Market includes provision for the free movement of labour for citizens of EAC
countries. In addition, free trade in services allows sole traders to move and set up in each
member state. In addition, working visas for those outside the EAC will be expedited for those
with skills in areas where Rwanda is in deficit.

2.59 Finally, Public Private Dialogue (PPD) forums to review sector specific regulations and
investments will be enhanced. Different sectors of the Rwandan economy face very specific
regulatory challenges, a number of which are affected by regulations at a regional level
through the EAC. These will be addressed on a continual basis, by the implementation of the
PSDS and extensive, regular consultation with private sector stakeholders. This will include
enhancing the current Public Private Dialogue (PPD) forum, with representation from a cross

34
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

section of the private sector and senior ministry level officials. RDB will be the secretariat for
the forum.

Priority Area 4: Transform the economic geography of Rwanda by facilitating

and managing urbanisation, and promoting secondary cities
as poles of economic growth

2.60 Urbanisation is being addressed as a standalone sector in EDPRS 2, which was not the case in
EDPRS 1. Increasing income segregation and overconcentration in Kigali, regional imbalances
due to the small size and limited development of secondary cities and weak coordination
of the urban planning and management system have made sustainable urbanisation a key
priority area for EDPRS2.

2.61 Rwanda is amongst the least urbanised countries in the world, but with a high population
density and population growth. To transform the economic geography of Rwanda and
manage the process of urbanisation, three high level objectives are pursued:

• Integrated development planning and management

• Development of Secondary Cities as poles of growth

• Establishment of financing and supply options for affordable housing

Outcome 4.1: Integrated development Planning and Management

2.62 Integrating and coordinating economic and physical planning. A functional planning system,
coordinating actors at the central and the local government level, with clearly defined
roles, participatory implementation and a strong monitoring component will be developed.
This will ensure a well-managed and balanced urbanisation process integrating climate
change adaptation and mitigation strategies, as well as other human, social and economic
considerations. This will require strengthening the alignment of development interventions
to developed land use master plans and strengthened monitoring of economic planning to
ensure spatial planning is well addressed.

2.63 Develop urban settlements around economic activities. The urbanisation and rural settlement
policy together with the urban development and management procedures will also be revised
to match the pace of anticipated growth that requires ultra-modern settlements centerd on
economic opportunities with potential to grow into towns and cities.

2.64 Establish and strengthen One Stop Centers in all districts; in order to ensure quick service
delivery, districts one stop center will be operationalised. The interventions to ensure this
happens include; i) reinforcing capacity in districts one stop centers to manage and issue
construction permits within 30 days and iii) strengthen a system for the districts to monitor
development on the ground.

35
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Outcome 4.2: Develop Secondary Cities as poles of growth

2.65 Many public services that are easily available in Kigali, such as inner-city public transport,
business registration services, specialised healthcare services, and multiple schooling
options, are not available in other cities. Yet, opportunities for investment and potential for a
viable social life are also attractive outside of the capital. While Kigali City needs continuous
support to improve management of service provision to an exponentially growing population,
the GoR intends to simultaneously support the development of a network of secondary cities
while Kigali City will be developed as a regional hub.

2.66 Six Secondary cities Huye, Muhanga, Musanze, Nyagatare, Rubavu and Rusizi will be
developed as regional centers of growth and investment. Six cities have been selected based
on agreed criteria as poles of increased urbanisation and growth. The development of these
cities will ensure more balanced regional growth and opportunities for increased access to off-
farm employment for a larger proportion of the rural population. To increase attractiveness
of these cities, strategic investments and economic projects will be undertaken including
investment in interconnectivity of the road network, linking these urban areas and secondary
cities to rural areas. The system for local revenue collection will also be strengthened.

2.67 Integrated public transport systems for Kigali City as a regional hub. Kigali will invest in
implementing an integrated multimodal transport development strategy that is centerd
around three non-mutually exclusive phases: (i) the first phase will focus on improving existing
modes of public transport services, by scheduled bus services and an integrated ticketing
system under a route franchising approach in Kigali City; (ii) the second phase will involve soft
and hard infrastructure aimed at introducing high occupancy vehicle lanes (HOV), establishing
more than 90km of Dedicated Bus Lanes (DBLs) in Kigali City, and scaling-up successful pilots
related to scheduling and ticketing; and (iii) the last phase will involve designing a detailed
Bus-Rapid-Transit (BRT) piloting the standardization of system for Kigali and finalising a 17km
BRT corridor by 2018.

Outcome 4.3: Financing and supply options for affordable housing

2.68 Housing demand is highest among low income earners making up more than 90% of the
demand. Kigali City alone is projected to require at least 35,000 housing units annually. To
address the rising cost of housing and growing demand private sector investment will have to
be channelled to large scale investments which require access to affordable financing options.

2.69 Mobilisation of large scale private investment in affordable housing and funding mechanisms
to support the mortgage finance industry. This will entail close collaboration between BRD,
RHA and RSSB. Policy options to ensure access to viable financing options include: (i) a BDF
guarantee scheme for affordable housing loans; (ii) housing loan products for SACCOs to be
provided by BRD based on a peer group guarantee scheme as well as traditional collateral;
(iii) making operational the affordable housing fund; (v) exploring the possibility of floating a
“housing bond” issue; (vi) mobilizing and linking housing cooperatives to large scale private
investors and vii) engaging in large scale PPP housing projects.

36
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Priority Area 5: Pursue a ‘green economy’ approach to economic

transformation

2.70 EDPRS2 incorporates a ‘green economy’ approach to economic transformation - reducing

economic costs through exploiting new ‘green’ economic opportunities. Significant resources
are allocated to a number of high impact interventions in priority sectors. Many of these will
reduce costs, create jobs, and also have large positive environmental impacts.

2.71 Two specific areas are promoted; green urbanisation and the promotion of green innovation
in industrial and private sectors. These have been singled out because they link closely to
other economic transformation themes (especially urbanisation, exports and private sector
development), and could open up new ‘transformative’ economic opportunities such as
markets for environmental goods and services. They also require dedicated support because
their potential has been little explored in the Rwandan context.

Outcome 5.1: Increased level of “green” investment and environmentally sustainable

urban development that exploits ‘green’ economic opportunities

2.72 Rapid urbanisation will occur in Rwanda in the next five years, with 35% of the population
envisaged to live in urban areas by 2020. This is likely to have huge economic and environmental
impacts, through increased pressure on urban infrastructure, such as transport and solid
and liquid waste management systems. This could push up costs but it also represents an
opportunity to transform urban development and the urban economy. The National Land-use
Master Plan, Kigali City Master Plan, plans for secondary cities and District Development Plans
provide a timely opportunity to promote some of these ideas through the planning system.
New global funds also exist that could help to support the development of such approaches
in Rwanda.

2.73 The first step in benefiting from this opportunity will be to build an early case for green
urbanisation in Rwanda. Analytical work will be conducted on the following elements: 1)
information on existing initiatives; 2) cost-benefit analysis of potential design options for
developing green urban areas (i.e. types of technologies to be promoted); 3) analysis of
policy and incentive mechanisms in the sector (i.e. regulatory structure for incentivising the
industry); 4) analysis of key capacity constraints to the implementation of green urbanisation;
5) analysis of potential institutional structures for implementing green urbanisation (e.g. roles
of local government and city authorities); 6) initial feasibility study for locating a green city
pilot.

2.74 Once this has been achieved, a Center of Excellence on green urbanisation that supports
research and skills development will be established. The mandate of the center will include:
1) Supporting research and development on green building materials and technologies,
establishing local supply chains, ensuring sustainable land-use planning, making sure
infrastructure is resilient to climate change and developing conceptual master plans for green
urbanisation; 2) building skills and capacity in the construction sector; 3) communication
and outreach, particularly linking government, researchers, the private sector and developers,
to identify cost-effective incentives for promoting green infrastructure, technology and

37
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

construction; 4) support in the definition of construction standards with the Rwanda Bureau
of Standards; 5) identification of financing opportunities, developing business plans and
proposals (linking to FONERWA); 6) and building stronger relationships between MININFRA,
RHA and industry and trade sector. Ideally, the Center could operate as a limited profit or
for-profit center attached to a university that has an existing architecture and environment
programme as well as environmental engineering facilities (KIST or Umutara).

2.75 One of the objectives, with MININFRA as the lead ministry will be to develop a conducive
regulatory environment to support green urban development. The regulatory framework will
respond to the development challenges of climate change and environmental degradation.
Regulatory instruments will be developed (e.g. energy efficiency requirements in building
codes; grants and rebates for renewable technology etc.) in collaboration with the responsible
ministries and institutions. This will provide the regulatory base for green urban development,
which would find application in any new settlement development, or in urban renewal projects.

2.76 Finally, the flagship project for green urbanisation will be to work towards the development of
a pilot ‘green’ city. EDPRS 2 will initiate a pilot green city to test and promote a new approach
to urbanisation that will be a demonstration of sustainable cities for the future. Activities that
will be carried out to develop the pilot include: 1) feasibility study, building on the findings
of the study outlined in intervention 1 above; 2) development of master plans (with the
responsible planning authorities and target groups) that demonstrate environmental impacts,
combined with economic sustainability of approaches; 3) identification of funding sources
from domestic and global sources (linking to FONERWA); 4) initiating the pilot (by 2018).

Outcome 5.2: High environmental standards and sustainable green innovation in the
industrial and private sectors

2.77 The main institutional driver of this effort will be a proposed Environment and Climate
Change Innovation Center. The center will have a mandate to promote transformational
green innovation in the industrial and private sectors. The scope of the center will include:
1) support to research and development through links to industry and academia in Rwanda
and internationally; 2) promoting technology transfer in priority sectors through business
advice and training; 3) linking innovation with finance through identifying international
funding sources, supporting proposal development and providing seed funding (FONERWA
will play an instrumental role in this area); 4) providing analyses and information on market
and sector trends. This will build on and link to existing institutions – specifically the National
Industrial Research and Development Center, the Cleaner Production Center, and the Center
of Excellence described under Outcome 5.1

2.78 One of its roles will be to propose reforms that will incentivise green technologies and
innovation. Countries that have been successful in developing environmental industries have
put in place ambitious regulatory and incentive frameworks (e.g. import duty exemption on
green products, tax rebates etc.). EDPRS 2 will initiate this process to review and reform
existing regulations and policies, and to build an enabling policy environment for private
sector and industry.

38
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

2.79 The Environment and Climate Change Innovation Center will also work towards piloting
promising ‘green’ technologies. EDPRS2 will support pilots of innovative technologies that
are likely to provide large-scale environmental and economic benefits. Technical and financial
support will be provided through the Center and FONERWA respectively.

2.80 Finally, establishing a pilot ‘model’ mine will also be considered. The mining sector is a key
strategic priority for in EDPRS 2 but has significant environmental impacts, which will increase
as the sector grows. Rwanda has the potential to promote a state of the art ‘green’ mining
sector. Feasibility studies on the potential to develop a ‘model’ mine, fully funded through
green investment that incorporates renewable energy systems, water treatment systems,
forestry out-grower schemes and a local training center will be conducted.

2.81 Priority Area Outcomes together with Interventions are at Annex 1.

39
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

3. RURAL DEVELOPMENT

Introduction
3.1 Given the prevalence of poverty and the range of socio-economic factors that affect rural areas,
rural poverty reduction requires comprehensive treatment. For growth to be sustainable and
its benefits to be equitably distributed, it should be broad-based, multi- sectoral and inclusive
of the Rwandan rural labour force, which is predominantly engaged in agriculture. Inclusive
growth recognises that, while targeted social protection may redistribute income to the
poorest in the short-run, effective and sustainable poverty reduction requires improvements
in productivity across both farm and off-farm employment activities. This requires supporting
households with secure rights to land, access to markets and resources and an enabling
environment for businesses and individuals.

Rural Development Objective for EDPRS 2

Sustainable poverty reduction is achieved through broad-based growth across

sectors in rural areas by improving land use, increasing the productivity of agriculture,
enabling graduation from extreme poverty, and connecting rural communities to
economic opportunity through improved infrastructure

What is Rural Development?

3.2 Rural development is defined as the process of improving the quality of life and economic
wellbeing of people living in rural areas. The primary objective of rural development is to
reduce rural poverty. Targeting rural poverty reduction also means focusing on strengthening
social cohesion and reducing inequality. Poverty reduction is a complex process and many
factors will determine whether economic growth is associated with poverty reduction, such
as the initial level of inequality, the composition of growth (which sectors grow) and how
inequality changes over the period of growth. Given Rwanda’s geographical and demographic
composition, sustained economic growth requires large gains in poverty reduction and vice
versa.

3.3 Rural Development emphasises the foundations and linkages of rural growth and the
coordination between sectors such as land, infrastructure, agriculture and rural finance,
while at the same time understanding the need for broader urban and rural linkages. Off-
farm job creation and large-scale investment to open up the economy are also essential.
These aspects are addressed in the Productivity, Youth and Employment Thematic Strategy
and the Economic Transformation Thematic Strategy. The combination and coordination of
these focus areas will catalyse rural development in Rwanda.

3.4 The analysis of EDPRS 1 experience suggests a number of recent trends and factors at
play in Rwanda. Firstly, agricultural production across households, driven by the Crop
Intensification Programme (CIP), has increased despite a decline in the average land size
cultivated by households. Secondly, much of this additional production has been marketed,

40
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

fuelling the commercialisation of agriculture. In 2011, households sold around 25% of their
output compared with 18% in 2005. These two factors have meant higher incomes for the
average agricultural household. Third, the contribution of off-farm income to rural households
has increased, particularly wage and self-employed income. Fourth, there has been a decline
in average household size leading to reduced consumption needs.

3.5 To understand further the nature of poverty, some more facets of rural poverty are explained:

3.6 The Rural Nature of Poverty: As the name implies, rural development focuses on rural areas.
In Rwanda, around 9.1 million people, i.e. 85% of the total population live in rural areas. Many of
the poor and extreme poor reside in this demographic group. Poverty remains largely a rural
and agricultural phenomenon with rural and urban poverty at 48.7% and 22.1%, respectively.
Rural households are more than twice as likely to be either poor or in extreme poverty than
urban households.

3.7 Inequality is still high despite the decreasing trend: As measured by the Gini coefficient,
inequality has reduced in the last five years to a level lower than in 2000/2001. Thus, poorer
households (predominantly rural) have become better off in proportional terms and at a
faster rate than less poor households. However, the Gini index remains high and there is a
need to ensure that inclusive growth takes place in rural areas.

3.8 Land Size and Poverty: Rwanda is predominantly rural in its landscape with around 1.4 million
hectares of arable land. Land categorised as rural is nearly 98% of total land area, with around
54% classified as arable, and the urban area being only 1.5% of total country surface (RNRA
2012). Agricultural smallholders dominate the scarce land available in Rwanda. And the
smaller the land holding, the more likely the land holder to be in poverty. Smallholders hold
an average of four to five plots that make up a mean land size average of approximately 0.59
hectares, with a median value of 0.33 hectares. However, the average picture does not show
how skewed land distribution is in Rwanda. 36% of households own 6% of the farm land, with
an average of only 0.11ha per household. In addition, women provide the bulk of labour in the
crop sector, but function mainly at subsistence level with insufficient skills, access to markets
and control over land and other agricultural facilities.

3.9 Rural Livelihoods and Poverty: The prevalence of poverty is associated with low productivity
in subsistence agriculture. Poverty is highest by far (76.6%) among households (often landless)
who obtain more than half their income from working on other people’s farms. The next
poorest group is those with diversified livelihoods who obtain more than 30% or more of their
income from farm wage work (76.2%). Women are more likely to fall into the category. Given
the transition of some men to off-farm employment, there are now more women involved in
agricultural subsistence production than before EDPRS 1.

3.10 Agriculture can also offer a pathway out of poverty. Improving productivity and increasing
sales of produce is an important income earner for smallholders. A study on Rwanda by IFPRI
supports this: “economy wide growth led by the agriculture sector has a greater effect on
poverty reduction than does the same level of growth driven by the non- agricultural sector”4
(IFPRI 2009).

3.11 Rural and Urban Linkages: The connection between poverty and rural-urban linkages and
urbanisation, are important considerations in Rwanda. Economic growth has spurred internal
4 De Janvry and Sadoulet (2010) looking at numerous countries, show growth in agriculture leads to
three times as much poverty reduction than GDP growth outside of agriculture

41
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

migration and it is estimated that 19% of the population migrated within the country during
EDPRS 1. Additionally, the higher the wealth of the family, the more likely the individuals are to
move. The size of the poverty differential between urban and rural areas will to some extent
explain the level of migration. Therefore it will be important to strengthen the economic
interdependence between rural and urban areas. Urban areas provide markets for rural
products. And centers for processing, distribution and information and concentration and
agglomeration of people and activities lead to high levels of social and economic development

Strategic Framework
Strategic Framework for Rural Development

3.12 The objectives for Rural Development are derived from the overarching objectives of EDPRS
2 – sustained poverty reduction and economic growth. The current headcount poverty ratio
is 45% and extreme headcount poverty is 24%, with the EDPRS 2 target set at 30% and 9%,
respectively. Two projections are presented in Figure 3.1, one (the red line) based on meeting
the MDG target by 2015 with less than 30% poverty by 2015/2016, and the other measure (the
blue line) showing the continuation of the Status Quo (the rate at which poverty declined
between EICV 2 2005/06 and EICV 3 2010/11). On the latter measure, headline poverty will
reach 32% by 2017/2018, just above the goal of 30%. On current trends, extreme poverty
will reduce to 14% by 2017/18. Therefore the reduction in headcount poverty over the next
five years will require a greater reduction than ever before to meet the targets of EDPRS 2.
In terms of rural poverty, even with urban growth (and assuming urban migration reduces
overall headcount poverty), rural poverty needs to decrease substantially faster than it did in
EDPRS 1 to reach the EDPRS 2 target.

Figure 3.1 Poverty Reduction Projections (MINECOFIN)

Poverty Head Count

70.00%

58.9% 56.7%
60.00%
Poverty
50.00% Headcount
MDG
35.56%
40.00%
44.90% 31.86% Poverty
Headcount SQ
28.16%
30.00%
Extreme
30.00% Poverty SQ
20.00%

10.00% 13.57%

0.00%
EICV EICV EICV EICV End of EICV
2001/2002 2005/2006 2010/2011 2015/2016 EDPRS 2 2020/2021
2017/2018

Source: MINECOFIN 2013

Note: SQ = status quo,

42
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

3.13 The approach to meeting the overall objective of Rural Development will have four areas of
focus. These four priority areas are summarised in Figure 3.2 and developed into specific
interventions in the following sections.

Figure 3.2 Rural Development Strategic Framework

Understanding Challenges that

Strategic could jeopardise Objectives from
Rural Poverty in
Direction rural development 8 SSPs
Rwanda
in Rwanda

1. Characteristics Focusing on the 1. Weak land admin Priorities, objectives

of rural poverty: foundations of to handle land and interventions
2. Land site income generation development related to Rural
in Rural areas: needs development
3. Low agriculture
productivity 1. Land and 2. Lack of
management coordination in
4. Poor access to
2. Agriculture infrastructure
markets and
investment
services 3. Access to
and human
5. Women, finance
settlement
dominant 4. Social protection development
subsistence 5. Rural 3. Low agriculture
farmers infrastructure: productivity and
6. Lack of roads, on-gri and access to skills /
diversity in off-grid energy knowledge
income sources options, water
4. Lack of
7. Low levels and sanitation
coordination
community to support
empowerement graduation from
extreme poverty
5. Low levels of
financial services
6. Demand for off-
grid energy not
current met

The Rural Development Vision for EDPRS 2

“Sustainable poverty reduction is achieved through broad-based growth across

sectors in rural areas by improving land use, increasing the productivity of agriculture,
enabling graduation from extreme poverty, and connecting rural communities to
economic opportunity through improved infrastructure”

43
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

4 Priority Areas for Rural Development

1. Integrated approach to land use and rural settlements

2. Increase the productivity of agriculture
3. Enabling graduation from extreme poverty
4. Connect rural communities to economic opportunity through improved infrastructure

Four Priority Areas:

Priority Area 1: Integrated Approach to Land Use and Human Settlements

3.14 Given land scarcity, land allocation for agriculture, industry and settlements will be a key
factor in determining growth in rural areas in EDPRS 2. The challenge is how to manage
and administer a range of land use issues, from dealing with land allocation to dealing with
land disputes amongst smallholders. The more efficient the system, the more investment
and income generation that is likely to occur. Therefore, there is a need to strengthen two
functions: firstly, overall land use allocation for development, and secondly the decentralised
process of land allocation and management. Growth in quality human settlements will depend
on effective land management and the pull framework of infrastructure and services in rural
areas.

Priority Area 2: Increase the Productivity of Agriculture

3.15 The agricultural sector has great potential to reduce poverty and ensure that growth is
inclusive. Since the scope to expand cultivable land area is limited, improved productivity of
agriculture land is critical for income generation. Rwandan agriculture seeks to move from
being a largely subsistence to a commercialised sector, building on the sector’s comparative
advantage and supporting skills and knowledge for smallholder farmers. A progressive shift
towards harnessing the potential of the private sector will be the main instrument for achieving
greater productivity and incomes in agriculture. The focus is therefore on irrigation and land
husbandry, proximity advisory services for crops and livestock and connecting farmers to
agribusiness through smallholder aggregation farming models.

Priority Area 3: Enabling Graduation from Extreme Poverty

3.16 While social protection has a key role to play in stabilising assets, incomes and capabilities in
the poorest households, it is not sufficient in isolation to enable graduation from poverty. While
expansion of the Vision 2020 Umerenge Programme (VUP) will focus on the poorest sectors
in districts, given the widespread nature of rural poverty and the budgetary implications of
relying on cash transfers, sustained graduation from poverty will be achieved through ensuring
stronger linkages to complementary public programmes and private sector job opportunities
to ensure that households are able to strengthen their livelihoods. Investment in facilitating
income-generating activities on and off-farm will be crucial to providing these opportunities.
Additionally, financial access and education can provide people with the knowledge and skills
needed to graduate.

44
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Priority Area 4: Connecting Rural Communities to Economic Opportunity

through Improved Infrastructure

3.17 Rural infrastructure investments are critical for rural communities to grow. For optimal impact,
these investments should connect up economic opportunities. The supply of public goods
in this area will leverage private sector investment. Feeder and secondary roads are needed
to improve agriculture produce marketability. The electrification programme for EDPRS
2 promotes twin strategies for universal access, facilitating 100% of the population to be
connected through on-grid and off-grid solutions. While all households will require access
to modern energy sources, the levels of consumption for some are too low to justify a grid
connection. Therefore off-grid options, such as solar and biogas, are the most economical
and sustainable options for poor households. Supporting biomass and other modern cooking
sources will also support rural households. And finally, ICT and water and sanitation will reach
rural communities through public and private investment.

Priority Area 1: Integrated Approach to Land Use and Human Settlements

3.18 The efficient allocation of land for agriculture, industry and settlement will be a key factor
in determining growth in rural areas in EDPRS 2. A strong institution (land administration
arrangements) to manage the process of land allocation and land rights is required to
optimise land use and protect Rwandan’s most prized asset. The challenge for Rwanda is
how to manage and administer effectively a range of land use issues, from dealing with land
allocation, land appropriation, monitoring and land leasing to private investors, to dealing with
land disputes amongst smallholders. There is a need to strengthen two functions: firstly, land
use allocation powers (who determines the allocation) and the process of land allocation.

3.19 Rural households are split between human settlements and isolated rural households. The
proportion of the population currently living in human settlements (planned, unplanned
or agglomeration) is around 60%. Isolated or scattered rural settlement accounts for
approximately 40% of all rural households. Imidugudu are planned settlements consisting
of between 100 and 200 houses on 10 to 20 hectares. Scattered rural living means that such
households are unable to connect to modern services. And connecting communities to
modern infrastructure and services is much easier and more cost-effective in grouped and
serviced settlements.

3.20 According to a survey conducted by MINALOC in 2012, distance from agriculture plots,
poverty and lack of planning of the newly proposed site are the three main reasons for
people not moving to a settlement (with or without infrastructure). For the 60% that reside
in settlement (planned or unplanned) sites, the provision of basic infrastructure is still very
low. Additionally, only 9% of villages surveyed have layout plans that assist housing and
infrastructure development in the village.

3.21 The incentives for rural populations to move to formal settlements will be mostly created
by pull factors. For individual households making settlement decisions, the economic and
social benefits of living in a formal settlement must outweigh those of living in a scattered
settlement. The benefits will include: access to economic opportunities, access to safe water
and sanitation, to electricity and social services such as schools and health centers. There are
economic and social costs of resettlement to the households which include the cost of moving
location, distance to farmland, construction of new housing5, and possible social difficulties in
the new location.
5 New regulations or higher standard may imply high short-term costs for rural households. 41

45
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Outcome 1.1: Improved land rights and land administration

3.22 Secure land ownership is a key determinant of agricultural investment and income generation.
Evidence from Rwanda and elsewhere has shown that tenure security drives investment in
land. Households with formal land titles are more likely to invest in soil erosion protective
measures, particularly female-headed households. Land titling has led to increased trading of
land. In the last five years, buying and selling of land has become widespread, with local land
markets being highly active. 84% of households feel they have the right to sell any part of their
land or use it as a guarantee (World Bank 2011). However, the capacity of local government
(district, sector, cell and village level) to support the rural population in land management is
limited.

3.23 The National Land Policy requires secure tenure rights for all landholders and registering
land holding is mandatory in Rwanda according to the Organic Land Law. Land reforms in
the last five years sought to improve land tenure security through a transparent and equitable
system of land administration. The Land Tenure Regularization (LTR) Programme provided for
full legal recognition of rights for the 11 million land parcels in Rwanda, giving title certificates
to land holders. By the end of 2012, LTR has demarcated and adjudicated 10.4 million parcels.
Ten million of these are recorded in the database, 8.5 million parcels have been through an
objections and corrections phase, and over 4 million parcel titles are approved for issue.
However, more is to be done to continue building the land administration system and capacity.

3.24 Consolidating secure land tenure for all land claimants through systematic land administration
will be pursued. The land registration processes for the 10.4 million parcels and issuance
of leases will be completed under EDPRS 2. Clear and secure land ownership is critical to
production and livelihoods for the rural population and is the number one determinant of
rural investment and growth. The system will be strengthened by connecting the national
land registry to decentralised land administration institutions, connecting the district land
bureau to web based systems, and building their capacity in land administration. There will
also be measures to connect land registration to mortgage registration processes which are
essential for access to finance.

Outcome 1.2: Enhanced rural settlements which facilitate access to basic services,
farm and off-farm economic activities through integrated district
land-use plans

3.25 The Master Plan provides a general framework and guidance for rational land use and
identifies areas suitable for agriculture and other forms of land use. The National Land Use
Master Plan was approved by Cabinet in 2011 and adopted by Parliament in 2012. However,
while the overall framework exists for the country to develop systems for land use planning,
at the district and village level land use planning has not yet been completed.

3.26 Effective land use planning at the district level will facilitate investment and empower
districts to design their economic future. This system will provide the spatial planning tool
for agriculture, industry and commercial development in rural areas. At the same time, it can
provide feedback loops to central level on the challenges of design and implementation.

46
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Given the size and complexity of land to be managed, strengthening local level functions will
be critical to support the land planning system. Decentralisation support in terms of technical
assistance and budgetary resources will be required.

3.27 Land and settlement planning and management at the district or sector level will determine
the success of resettlement. To ensure attractive pull factors for formal settlements,
government will utilise district land use plans to coordinate public infrastructure (such as
water and electricity) with growing settlements (both existing and new). Regulations for
settlement in rural and urban areas, including on construction standards, guidelines for
amenities and appropriate density guidelines will be developed covering the requirements
of all existing laws and regulations. Citizens will be incentivised to live in productive well-
maintained settlements where services and commerce will be accessible. Leadership and
clear implementation responsibilities of key institutions will be central in supporting the
mapping of settlement sites. Additionally, the ‘green village’ concept will be developed for
grouped settlement planning focusing on environmental sustainability and local-level climate
resilience for land use planning and development at the village level.

3.28 A framework for coordinated land use planning through District Land Use Plans will be
implemented. Integrated planning and implementation will allow coordinated investment
and implementation of government and private sector investments. The existing One Stop
Centers (OSCs) and Land Bureaus will be supported to design and oversee implementation
of district land use plans. Relevant ICT equipment and land mapping tools will be put in place.
The interaction of District Land Use Plans with the pull factors of infrastructure and services
will incentivise quality human settlements to grow. Coherence in terms of infrastructure
investments, both private and public, at central level and in district development plans will be
needed. And policy coherence will mean aligning a range of central and district level plans
including the National Land Use and Development Master Plan (2010), the National Settlement
Policy (2009), the Strategic Transport Master Plan (2012) the National Urban Housing Policy
(2004), EARP II (2013-2017), the Irrigation Master Plan (2010), and the Water and Sanitation
Policy (2012).

3.29 Village layout plans will be designed and implemented through a community- led process.
District land use plans will provide the overall guidance for village level layout. These will
ensure that the planning of land, infrastructure and agriculture investments is harmonised at
the lowest level possible. More importantly, communities will be empowered to design their
own settlements with technical support. This will be supported through measures for citizen
feedback and other accountable governance measures. Technicians in OSCs and Sector/
District Land Bureau offices will support rural communities in cell layout plan development
so as to integrate infrastructure such as water and energy, based on the principles outlined
in the District Land Use Plans. Compensation and support will be required for households in
vulnerable zones or on land needed for large-scale infrastructure plans.

3.30 The regulatory framework for land use planning will be monitored and enforced. Guidelines
for land use planning and monitoring for districts will be developed. Districts and sector
administration will be responsible for enforcing plans after approval by their communities
and guided by the relevant tools at national and district level. District offices will support
and enforce the local district guidelines to ensure that agriculture and non-agriculture land is
protected for social, economic and environmental reasons.

6 Extension refers to the supply of undifferentiated information and messages from the center to all farmers, while advice
implies analysing farmers’ needs and constraints and providing information and training that responds to these needs.

47
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

3.31 Accessing quality and affordable housing will be an important element of rural development.
Cost-effectiveness and the availability of improved local construction materials will be
pursued. Government will provide some pilot housing sites to support the growth of rural
quality settlements. Supporting construction through the private sector, cooperatives and
other institutions will enable more off-farm jobs to be created.

Priority Area 2: Increasing the Productivity of Agriculture

3.32 The agricultural sector remains the sector with the greatest potential to reduce poverty in
Rwanda and ensure that growth is inclusive in EDPRS2. Since the scope to expand cultivable
land area is limited, improved productivity of agriculture land is paramount for income
generation and rural transformation. Income generation and household food security are
intertwined as households need to be able to generate enough money to buy nutritious and
quality food. However, agriculture labour productivity is still very low. Workers in agriculture
are characterised by high-under employment with 68% working less than 36 hours in a week.
Women, who dominate agriculture subsistence, are particularly vulnerable in this respect.

3.33 Rwandan agriculture will move from a largely subsistence to a commercialised base building
on the sector’s comparative advantage. While staple crops will continue to be important
for nutrition and smallholder incomes, over the longer term, the climate, and favourable
endowments of water and labour favour high-value crops. These products are labour intensive,
require technical and value chain expertise and can generate high levels of income per hectare.
Promoting high-value products to diversify smallholder farming and satisfy increasing urban,
domestic and regional incomes and diets, will be a priority.

3.34 A progressive shift towards enhancing the role of the private sector across a range of functions
will be the main instrument for achieving greater productivity and incomes in agriculture.
The private sector will be supported to take responsibility for value chain exploitation,
management of facilities, quality control, farmer advisory services, input marketing and
investment. Mechanisms for private sector investment are stronger coordination between
RDB and MINAGRI to ensure that government works to facilitate and crowd-in investment. At
the same time, the public sector will play a strong role in policy, monitoring and regulation,
facilitating partnerships and providing infrastructure. The public sector’s support will be
provided through training programmes for farmers, risk-reducing financial guarantees, sharing
the cost of agricultural advisory services, and supporting investments in hillside irrigation and
terracing and research. These will support capacity development across the entire sector to
improve the productivity and quality of agriculture and livestock farming.

Outcome 2.1: Increases Productivity and Sustainability of Agriculture

3.35 Irrigation has the potential to triple crop production compared to rain-fed agriculture. Rural
areas are particularly vulnerable to climate change as Rwandan agriculture is mainly rain-
fed. The increased demands of commercial agriculture will also place significant pressure on
water resource management. Irrigation not only helps raise yields but prolongs the effective
growing periods in areas with dry seasons. This allows for multiple cropping (two to four
crops a year) where previously only a single crop could be grown. The security provided by
irrigation gives farmers confidence to invest in additional inputs that are needed to intensify

48
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

production. However, the technical and management challenges to making irrigation systems
work are complex. Increasingly, private sector participation will be emphasised for the sub-
sector.

3.36 Irrigation will be expanded to increase productivity and enhance food security. The target
for the EDPRS 2 is to develop a total of 100,000 ha under irrigation of which 65,000 ha
will be marshland and 35,000 ha will be hillside irrigation. Hillside irrigation development
is a challenge which will require special attention. Public sector investment will be the main
driver, with continuing efforts in developing small-scale irrigation based on water catchment
areas and training the Water Users Associations (WUA), where farmers cooperate to operate
and maintain the irrigation infrastructure. Effective operation and maintenance is particularly
important given the high cost of investments and the relatively low levels of expertise in
maintenance of irrigation systems in Rwanda. In terms of public sector investment, MINAGRI
will develop 60,000 additional ha of irrigated land, two-thirds marshland and one-third
hillside. In terms of private sector irrigation development, 20,000 ha of land will be availed for
development. Government will facilitate investment in private irrigation schemes (a minimum
of 25 ha and a maximum of 500 ha) and assist farmers in understanding the schemes. A unit
within MINAGRI, working with RDB, will be set up to facilitate private investments in irrigation.

3.37 Land husbandry methods will also be improved. 90% of cropland is on slopes of 5% to 55%,
and land husbandry and terracing are important to increase productivity. Actions will prioritise
scaling up of successful experiences with both progressive and radical terraces, accompanied
by an intensified programme of integrated soil fertility management and erosion control. Agro-
forestry and soil research will also be supported by MINAGRI to help harness the sustainability
of farming systems.

Outcome 2.2: Increased public and private advisory service to farmers for agriculture
and animal husbandry skills development

3.38 While the promotion of improved seeds and inorganic/organic fertiliser under EDPRS 1
has increased the use of these inputs from a very low base, many farmers still do not use
fertiliser and the application practices are not optimally carried out. Agriculture research,
technology, knowledge and skills are key to improving productivity. Currently, the outreach
of advisory services is very low in Rwanda. It is estimated that 32% of households receive
information through this channel (BTC 2012). Poor quality of delivery and/or information is
the second constraint. Promotion of accessible extension and advisory services6 is a priority
since knowledge intensive agriculture is needed to improve productivity. There is a need for
a greater role for private services and more market- orientated approaches. Additionally, the
sector needs greater farmer participation in defining issues and priorities, and the advisor
should become a facilitator in the farmer’s learning process.

3.39 Develop sustainable private agro-inputs distribution and sales networks. Demonstrations,
trials and seeing the results of increased application of inputs have allowed farmers to see
the benefits of input application over the past five years. In some areas of the country, poor
smallholder farmers are already paying for fertilisers. Experience from one private credit and
extension provider suggests that charging smallholder farmers the full cost of fertiliser plus

7 Under contract farming, a marketing agent, exporter or processor makes purchases from substantial numbers of small famers agriculture entrepreneur
to reach a lease agreement with a number of farmers. The lease, ideally for not less than 10 years, allows small farmers to be hired to work on their land,
and they would receive at a minimum the revenues they previously took from the land. The government does not need to guarantee any part of the
agreement as the risk is borne by the investor.

49
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

around a 10-15% handling margin, depending on the extension package offered, is feasible.
This approach has proved successful, with a rapidly expanding client base, high repayment
rates and good farmer retention in the programme, demonstrating that subsidies may be
reduced without adversely affecting food security and income generation.

3.40 Farmer Field Schools (FFS) and farmer learning platforms will go nationwide. Public
investment in FFS will be scaled up to reach at least 150,000 farmers to utilise locally- driven
ways to improve productivity and income generation. FFS trainers and facilitators, particularly
women, will be trained to work with farmers. Additional crops will be added to broaden
the supply of what is available to farmers. Inputs and better farming practices will increase
productivity as their correct application and use becomes more widely known. Fee collection
for FFS will be examined to increase the sustainability of the approach.

3.41 An important addition to public agriculture advisory services will be the introduction
of Farmer Promoters and Animal Health Workers. The concept is based on the model of
community health workers that has been successful in the health sector, with model farmers
facilitating improved skills at the village level. Training of government extension agents,
primarily sector and district agronomists and vets, will be enhanced. The provision of targeted
services requires an array of methods and tools for training. It should go beyond simple fact
sheets and be market-orientated. Priority value chains and commodity sub-sectors require
continually updated reference materials. Additionally, District Agricultural Platforms can be
initiated to facilitate information exchange. These low cost events, often on farmer’s fields,
promote peer-to-peer exchanges and allow programme providers such as FFS to assess their
advisory services.

3.42 Agricultural private sector advisory services will also be promoted. In growing private sector
advisory services, the current fertiliser and seed systems will be reformed. This is already
underway with moves to phase out price controls on fertiliser, ending the monopoly of agro-
dealers, and phasing out the transport subsidy during EDPRS 2. Having sustainable private
sector providers charging farmers the full cost of fertiliser and other inputs will promote the
sustainability of the sector and will incentivise improved private supply and advisory services.
Government expenditure on input subsidies will decrease, though they may have a residual
role as social protection to the poorest. In the seed sector, government will promote private
sector seed systems by selling seeds to farmers and investing in quality seed certification and
inspection services. This will raise standards and induce private investment.

Outcome 2.3: Farming Models scaled up to link to agro-processing

3.43 Making the transition to commercial farming requires rethinking agriculture and livestock
systems. To improve incomes of smallholder farmers, it is essential to connect them to value
chains and investment opportunities. To generate value, agricultural products will need to
have quality, quantity and reliability. Production in bulk is required and cooperatives in Rwanda
have already attempted to aggregate smallholder production. Post- harvest management
skills are also vital for farmers to become market-orientated. Training and investment in the
areas of drying, processing and storage management will be made to transform smallholders
into commercial agents.

50
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

3.44 Different farmer models along with appropriate skill training in post-harvest management
will be utilised depending on the context. Land consolidation is not the only model, though
cooperative farming will continue to be promoted and the model of farming can change to
fit the situation. A conducive environment will be supported for farmers to be able to bulk
their production under different models of commercial farming. GoR will explore pilots with
processors that connect farmers to agribusinesses and large scale investors.

3.45 Experimentation with contract farming7, nucleus estate farming, consolidated land rental
and corporate farming will be encouraged. Contract Farming is one way to aggregate and
market smallholder farmer and livestock production. Contracts signed with traders and
processors allow farmers to invest in inputs. Government will work to educate both parties
of the benefits of working together and will promote a partnership policy which mitigates
partnership risks through confidence building, particularly at the first stage. Another model is
Nucleus Estate Farming which is where a large nucleus farm produces a high-value product,
and serves as a demonstration and service provider for surrounding smaller farms (out-
growers). Outgrowers agree to plant the same crop, follow the same cultivation procedures
and sell to the same buyer. This is already being utilised by a handful of companies in Rwanda.
The key to success appears to be provision to out-growers of high- yielding varieties and
rental/leasing of farm machinery with training in post-harvest management and guaranteed
purchase. The Consolidated Land Rental model is another model currently being used by the
private sector in Rwanda. This involves allowing an agriculture entrepreneur to reach a lease
agreement with a number of farmers. The lease, ideally for not less than 10 years, allows small
farmers to be hired to work on their land, and they would receive at a minimum the revenues
they previously took from the land. The government does not need to guarantee any part of
the agreement as the risk is borne by the investor.

Priority Area 3: Enabling Graduation from Extreme Poverty

3.46 The target for the end of EDPRS 2 is for less than 10% of Rwandan households to be in
extreme poverty from 24% (2011). The extreme poor tend to be in larger households with
livelihoods predominantly based on waged farm work. The poorest households tend to be
larger households having no land or very small landholdings, low levels of literacy8 and poor
access to services. Children living in these households are at higher risks of malnutrition
(stunting). Additionally, according to the CFSVA 2012, food insecure households are those
with small landholdings who tend to be headed by women, elderly and uneducated. While
gains in agriculture and off-farm employment opportunities will play a key role in poverty
reduction, effective government support to those in extreme poverty will be critical to protect
the poorest, mitigate the worst effects of poverty and support graduation out of extreme
poverty.

3.47 Social protection will be critical to enabling some of the poorest households to graduate
out of extreme poverty in a sustainable way. The social protection concept in Rwanda
has four elements. Firstly, it is protective, i.e. it provides essential support to those living in
poverty. Secondly, it is preventive, i.e. it puts in place a safety net that can be activated to
prevent people falling into poverty. Third, it is promotive, i.e. it seeks to support poor people’s
investment so that they can pull themselves out of poverty. Fourth, it is transformational, i.e.
it aims to improve the social status and rights of the marginalised, particularly women.

8 Those in quintile 1 have significantly lower literacy rates, with 57.6% of those aged 15 years or more and 75.6% from 15 to 24 years of age. This is
compared with quintile 3 with 67.6% and 83.6% respectively.

51
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Outcome 3.1: Increased and sustained graduation from core social protection
programmes by connecting economic opportunities and financial
services

3.48 Sustained graduation from poverty requires strong linkages to complementary public
programmes and private sector job opportunities. Requirements for graduation include
improvements in the quality of public services, activities to enable poor people to access jobs
or undertake investments (including skills training), and commitments to tackle discrimination
and secure basic rights and entitlements. Financial education can also provide people with
the knowledge and skills to graduate from poverty and core social protection programmes.
Empowering women in the household and in the community is particularly important. This
depends on the potential for employment and income generation in agriculture and non-
agriculture activities in rural areas, which are addressed by the Rural Development Strategy
and the Youth Productivity and Youth Employment Strategy.

3.49 The graduation vision for the flagship social protection programme is to enable the poor to
stabilise their assets and incomes and accumulate savings. Extremely poor VUP beneficiaries
have access to combinations of direct support, public works and financial services that can help
them become less poor. They exit from the VUP’s direct support or public works programmes
once they move out of Ubudehe category 2 (a proxy for movement out of extreme poverty).
Once exited from the VUP’s social protection programmes, there are services available to
help keep the households out of extreme poverty and enable them to further strengthen
their livelihood. These include the VUP financial services, complementary programmes and
market-based credit.

3.50 Financial services will be targeted to the poor to allow them to graduate into using formal
financial services. Supporting these services will assist the sustainability of formal institutions
such as SACCOs and microfinance banks. Impressive results in financial inclusion have been
driven by the outreach and membership drive of SACCOs across rural areas in Rwanda.
Informal financial channels such as VSLAs often provide the stepping stone to formal financial
inclusion for those in poverty. Of those unbanked, 80% claim to have insufficient money to
justify a bank account. VSLAs and Micro Finance Institutions (MFIs) allow poor households to
see the impacts of savings and loans and to obtain basic financial literacy skills such as cash-
flow management. Facilitating the growth of these informal financial services will be critical
to sustainably achieve the 80% financial inclusion target for 2017.

3.51 Products that cater to the needs of rural clients will be critical to increase inclusion and use
of financial products. Mobile Money Transfers (MMT), agent banking and micro-insurance
are beginning to improve the lives of the rural poor. Branchless banking includes remittances,
transfers, payments and insurance. Mobile network operators are beginning to supply this
area with low-cost products. Mobile money transfers have already demonstrated savings
in travel costs and remittance and transaction fees. To encourage this, the legal/policy
framework on transaction limits and different categories of MMT will be improved. Building
financial capabilities through financial education and financial literacy will ensure that clients
understand the products.

3.52 Umurenge SACCOs will be strengthened. SACCOs have contributed the most to increasing
financial inclusion and mobilising savings with 22.3% of adults using its products and services.

9 Rwandan households consumes on average about 42 kWh/year/capita compared with 478 kWh in Sub-Saharan Africa and 1,200 kWh for developing
countries as a whole.

52
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

To ensure sustainability of SACCOs the following activities will be prioritised; i) consolidating

and reducing risk: small Umurenge SACCOs could be in danger of collapse due to poor
infrastructure and may be voluntarily moved into district SACCOs; ii) supporting higher
lending for SACCOs: there is a need to strengthen the size of the capital for agricultural
and non-agriculture cooperatives; iii) provide the Umurenge SACCOs with better access to
the payment system and interbank services and iv) evaluate district SACCOS in terms of
their branch network and their sustainability. Regulation is also important in relation to the
currently very high costs to the poor of receiving benefits through SACCOs. BNR will review
its Regulation on the Organisation of Microfinance Activity to strengthen requirements in
priority areas.

3.53 Further efficiency gains are to be made through harmonising social protection measures as
set out in the Harmonisation Policy 2012:

• Improving the targeting and exit guidelines for social protection programmes
• Implementing updates and redefine Ubudehe categorisation
• Poverty and impact surveys to understand poverty in Rwanda
• Well publicised and accessible appeals and complaints mechanisms
• Raising awareness of communities on targeting procedures and their entitlements.

Outcome 3.2: Improved targeting and effectiveness of social protection interventions

3.54 Under EDPRS 1, VUP, the flagship social protection programme, was expanded to reach the
poorest households in 180 sectors with direct support, and 150 sectors with public works by
2012/2013. VUP support still only reached approximately 5% of the population and significant
numbers of extreme poor have still not benefited from the programme.

3.55 Understanding and monitoring graduation will be developed through a single database across
social protection programmes. Sustainable graduation means viable pathways out of poverty
that enable people to exit core social protection support and progress to a complementary
social development programme that builds skills and resilience. Household graduation will
be monitored to ensure that there is adequate understanding of the factors contributing to
graduation while ensuring support services are provided all through the process. This will
be reinforced by development of a social protection database across government which will
enable tracking of household progress across multiple programmes, reduce fragmentation of
interventions, and avoid duplication of efforts while providing a comprehensive system. The
aim is to have the social protection M&E system functional by 2015/2016.

3.56 The coverage and targeting of the extreme poor through core social protection programmes
such as VUP Direct Support and VUP Public Works will be increased. Government will seek to
scale up and improve the targeting of the core social protection programmes to double, from
5% to 10% of the population, the number of those in extreme poverty receiving direct support
and public works. Targeting improvements will be made to social protection programmes
including VUP, to take advantage of district poverty headcount data and to strengthen the
Ubudehe categorisation process. The poorest districts and sectors will receive coordinated
and targeted support to bring efficiencies in reaching the poorest households.

53
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Priority Area 4: Connecting Rural Communities to Economic Opportunity

through Improved Infrastructure

3.57 Infrastructure is critical for rural communities to grow. For optimal impact, these investments
will connect communities to areas of economic opportunities. Road transport development
in EDPRS 1 focused on improving and rehabilitating the road network. With 14,000 km of
national, district, feeder and urban roads, Rwanda’s road density is high at 0.53km of road
per square km. The main national paved roads are of relatively high quality but the quality
of unpaved roads, maintained through community works such as HIMO, is generally poor.
The level of services in the transport sector has improved but remains poor although it is an
important element in connecting people and moving goods.

3.58 Despite being one of the most densely populated countries in Sub-Saharan Africa, only
4% of rural households use electricity as the main source of lighting (EICV3). Connected
rural households consume below 30kWh/year/capita, well below urban consumption and
ten times less than the Sub-Saharan African average at 478 kWh/year/capita9. In the future,
productivity increases through the use of small-scale technology at household enterprises or
SMEs will depend on the provision of energy. The typical rural household requires energy for
a cell phone, radio and lights. These types of consumption may be suited to solar and micro-
grid which are much more economical than on-grid solutions.

3.59 The energy used for cooking is currently dominated by biomass in the form of wood fuel used
by over 90% of rural households. Biomass is an important source of rural employment, and
low-cost energy for households and small industries and it reduces large- scale importation
of alternative sources of energy.

3.60 Rural populations are becoming more connected to each other through the use of ICT
devices. This major success is primarily through mobile phones owned by an estimated 45%
of households (EICV3). This contributes to increased economic interaction and to demand-
driven services such as agricultural market information and mobile banking. Mobile money
enables transfers to those in poor areas and facilitates trading.

3.61 Water supply and sanitation play a critical role in preventive healthcare and socio-economic
development in rural areas. Ready access to water reduces the time spent searching for
water and may improve educational outcomes. Evidence suggests women/girls bear more
of the cost of distant water sources in Rwanda. Notably, hygiene and sanitation is a strong
complement to effective access to clean water.

Outcome 4.1: Quality road network and rural feeder roads extended

3.62 Feeder and secondary roads are needed to improve agriculture productivity and marketability.
A study revealed that farmers within 7-10km of a main road receive 85-160% higher price for
their produce than those further away (OTF 2010). The predominant modes of transport used
by farmers have been human transport (head loading or drawn carts) or bicycles/motorbikes.
The use of motorised vehicles such as trucks or buses to transport bulked production to
market has been constrained by the lack of road access and poorly maintained feeder and
unpaved roads. It is estimated that farmers lose, in direct costs, between USD40-106 million

54
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

a year due to the lack of feeder roads (OTF 2009). Farmers are likely to respond to better
transport facilities. Production in areas with feeder road programmes increased by 81%
compared to non-feeder road areas where growth was just 15% (OTF 2010).

3.63 The quality of Class 1 national and district unpaved roads is poor. This impedes district-level
transport, limits access, extends travel times and pushes up costs along the value chain. The
poor quality of roads mean that most rural transport is provided by large buses with 60 seat
capacity as it is difficult to operate mini-bus services on unpaved roads particularly in the rainy
season. Private operators are reluctant to provide services because of high operating costs,
poor quality of roads and low passenger demands. Districts with the worst levels of public
transport services seem to relate to high poverty levels. According to EICV 3, the main reason
for low levels of public transport use, are high costs and transport not being proximately
available.

Table 3.1 Road Development (Transport Sector Strategy 2012)

Roads Total length (Km) Good Condition %

National Paved Roads 1,172 97.5
National Unpaved Roads 1,688 39.9
Overall National Roads 2,860 63.5
(paved + unpaved)
District Roads Class 1 1,836 32.6

Source: Ministry of Infrastructure

3.64 Rural areas with economic potential will be connected to market through feeder roads. To
improve productivity, road programmes will connect areas of economic potential to markets.
District feeder roads will be implemented under a National Framework for Feeder Road
Development that will be coordinated by MININFRA (RTDA), MINAGRI and the districts. The
programme promotes local labour, materials, equipment and finance to create off-farm jobs.
The strategy will prioritise training and capacity development for small- scale contractors
and supervisors in road engineering and construction management. During EDPRS 2, the
target is to upgrade 2,550km of district Class 2 feeder roads and 7,000km of farm to market
roads. The programme will target poorly connected areas with high agricultural production
potential. This will also utilise local labour-based approaches such as HIMO.

3.65 Capacity and knowledge of communities of road works will be improved. Four hundred
communities will be trained in HIMO public works construction, operation and maintenance.
The aim for road quality is to move from 37% to 60% of roads being in good condition over
EDPRS 2 and much of this will rest in good operation and maintenance practices by district-
level institutions.

3.66 Transport services will be improved to include waterways and rivers and increased kilometres
of scheduled rural bus routes. The number of scheduled kilometres of rural bus routes will be
increased from 1,600km in 2012 to 8,100km in 2017. The length of unpaved road network will
gradually be reduced from 12,675km to 11,768km through upgrading works while the quality
of unpaved road network in good condition will be increased from 11% (2012) to 39% in 2017.
Diversification of transport services will be undertaken with studies for 3 ports in Lake Kivu

10 FONERWA in Rwanda manages low-carbon growth and climate change related finance – see
Priority 5 of Economic Transformation Theme.

55
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

completed and possibilities explored and navigability of Akagera and Rusizi rivers.

Outcome 4.2: Access to electricity for the rural population

3.67 The electrification programme for EDPRS2 promotes twin strategies facilitating 100% of the
population to be connected through on-grid and off-grid solutions. While all households will
require access to modern energy sources, the levels of consumption for some are too low to
justify a grid connection. Off-grid options may offer the most economical and sustainable
option for poor households, particularly given the settlement structures in Rwanda.

3.68 The Electrification Access Rollout Programme (EARP) will ensure on-grid networks connect
the bulk of the population in settlements and urban centers. EARP will continue to construct
the backbone of the power supply system to rural areas and will align generation capacity
and demand to achieve an efficient tariff. It will focus initially on viable clients, i.e. those who
can make productive use of energy and those who can afford to pay for the cost-covering
connection fee. In terms of household connections, approximately 48% of the total population
will be within feasible range of the grid.

3.69 For the remaining households (over 1.2 million), off-grid solutions represent an attractive
cost-effective option. These households are likely to have low-demand profiles and would
have strong incentives to use solar products or micro-grids powered by micro- hydro. Off-
grid electricity solutions have proved highly effective in countries elsewhere and this is an
area where private sector innovation may decrease costs.

3.70 Electrification rollout will include on-grid electrification. The EARP will target around 45% of
households with direct connections by 2017. Once the network has been extended and covers
large rural centers, connection costs will be significantly reduced per connection. The EARP
network will also seek to connect industrial, mining, agriculture and commercial opportunities
to the electricity grid.

3.71 But rapid growth in private sector solar products will be encouraged. The EARP phase 2
includes off-grid provision for the approximately 52% of rural households who may be out
of range of the national grid during the next five years. GoR, in partnership with the private
sector, will support the rapid dissemination and sales of solar power systems (up to 1.2 million
units).This will be through a large-scale awareness programme of the benefits of solar power
for rural households. Given the growing market, the quality of solar products is improving and
the cost is decreasing. It costs around USD50 for a high-quality lantern with phone charging,
whilst a home solar system costs USD200. The regulatory environment and importation
duties and standards on solar products will be reviewed where appropriate. Clear information
on EARP II will also be provided to encourage off-grid producers to target clients in off-grid
areas.

3.72 Off-grid micro-hydro generation will be expanded. Micro-hydropower projects will generate
electricity for communities located in isolated areas away from the national grid, but with
hydro potential. These provide higher levels of power than solar power systems but at a high
investment and maintenance and operation cost. Local and international investors will be
encouraged to invest in micro-hydro power projects through improved incentives to exploit
local energy resources.

56
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

3.73 Energy education for the population will be provided. A grid connection is not the only
source of energy and the rural population will be sensitized on the relative costs and benefits
of alternative technologies to induce households to make informed decisions. Areas that will
be off-grid in the next five years will be facilitated to access affordable alternatives at the
community level.

Outcome 4.3: Rural households using efficient cooking methods

3.74 Given the high energy and economic costs of Kerosene and Liquefied Petroleum Gas (LPG)
for rural households, over 85% of Rwanda’s primary cooking energy source comes from
biomass. The internal wood market is worth more than USD150 million and is an important
source of off-farm jobs. Firewood and agricultural residues are used by 86% of the population
as the primary fuel for cooking. Wood, primarily eucalyptus, and charcoal are used with urban
households using predominantly charcoal. According to EICV 3, 50% of urban households
use charcoal compared to 3.7% of rural households. Charcoal has the advantage of relatively
higher energy content and can be stored. Rural areas supply the urban centers with charcoal.
Some 49% of the retail value of charcoal, sold in Kigali, stays in rural areas and 51% is used to
transport and distribute the charcoal product (MARGE 2008).

3.75 Biomass is the most economic option for rural households but should be used in a
sustainable, safe and efficient manner. However, the biomass trade lacks clear regulation
which can sometimes stifle trade. Cooking efficiency is low in rural households mainly due to
lack of adequate technologies. Less than 50% of households use improved cooking stoves.
Rwanda is well placed to benefit from global policy on energy efficiency and climate change
financing10. Biomass use, from biogas systems to improved cooking stoves, represents
important potential sources for carbon financing.

3.76 Sourcing of wood for fuel will be improved. Sources of biomass will be supported and
regulated to ensure a sustainable supply of wood. High yielding trees such as eucalyptus will
be planted in areas with no competing productive land to provide wood fuel and charcoal.
Working together, MININFRA and MINIRENA will ensure that there is an equitable balance
between forest protection and wood supply. Rural communities will be supported in wood
production through training and workshops in seed handling, tree nursery management,
forest harvesting, wood processing, timber drying and forest extension.

3.77 Biogas and alternative sustainable biomass sources will be promoted. The Biogas Programme
for Households and Institutional Biogas Programme will be expanded and delivered at the
district level. The biogas digester represents an important long-term opportunity for household
and communities if managed properly. In tandem, there is a need to encourage private sector
innovation to help expand this sub-sector. Alternative sources of fuel for cooking are peat,
rice husks (paddy consists of 20% husk and 80% rice) and coffee husks. Agriculture residues
can use wood stoves. This market is currently under-developed in Rwanda but in Africa as a
whole it has seen a large growth.

3.78 Use of improved energy efficient cooking stoves will be promoted. It is estimated that the
fuel consumption (cost) for improved cooking stoves may be 30-70% lower than for traditional

57
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

stoves. Working with the private sector the aim is to deliver 400,000 improved cook stoves
to Ubudehe Categories 1 and 2, utilising a model integrating community-based workers to
deliver the product together with training packages. The distribution of the stoves will be at
an affordable cost to these households. Private sector companies will be involved in the value
chain from production to distribution and marketing. This will also be linked to investing and
testing green technologies and utilising green financing opportunities.

Outcome 4.4: Connectivity by rural communities to relevant information

3.79 ICT allows rural people to connect to a range of social, employment and trading opportunities.
The sector is private sector led though the Government can facilitate its growth in rural areas
through putting in the basic infrastructure such as internet connectivity. Market information
systems for farmers covering trade and price information, can improve the efficiency of the
market. However, use of these products is very low compared to countries in the region such
as Kenya.

3.80 ICT expansion and products for rural areas will be supported. The private sector will be
encouraged to design ICT services for rural areas, especially mobile phone based systems. The
combination of mobile money products and mobile phone sales will allow rural households to
communicate and conduct cashless transfers in rural areas or between rural and urban areas.
Mobile phones are low-cost and can also have radio and internet services which can allow for
further knowledge generation in rural areas.

3.81 Agriculture information systems will reach more farmers. E-soko phase 2 will provide farmers
with timely (daily) agriculture and livestock market price information as well as other services
for farmers. The private sector will be engaged to develop more products for the agriculture
sector.

Outcome 4.5: Increased access to water and sanitation facilities

3.82 During EDPRS 1, water and sanitation services have improved significantly for rural
communities. These are among the most cost-effective ways to reduce the spread of hygiene
related diseases. Access to clean water with improved sources of drinking water has reached
71% of the population a 7 percentage point improvement since 2005/2006. However, there
are differences across regions, with Kigali’s access to clean water above 90% and some
parts of the Eastern and Western Province below 60%. Sanitation services (through public
and household latrines) reached 74.5% of the population. The goal for EDPRS 2 is to ensure
universal access to water and sanitation.

3.83 The quality of water delivery will be improved. This will be achieved by assisting districts
to plan, design, finance and implement water infrastructure projects. The possibilities for
community involvement and private sector management in distribution will be further
explored alongside increased public investment. The aim is to ensure that households across
rural areas in Rwanda are within 500m of an improved water source.

58
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

3.84 Sanitation in rural areas will be improved. Household sanitation coverage will be improved
for the remaining households and communities through local capacity building and public
investments for certain public buildings such as schools and markets. District sanitation plans
will be designed to promote improved planning and resource allocation.

3.85 Priority Area Outcomes and Interventions are in Annex 1.

59
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

4. PRODUCTIVITY AND YOUTH EMPLOYMENT

Introduction
4.1 This chapter, focuses on jobs and productivity by pulling together interventions from 6
sectors; Private Sector Development, Education, Youth, ICT, Financial Sector Development,
and Social Protection. The key challenges facing Rwanda in this area are high levels of
underemployment in rural areas, insufficient off-farm jobs being created, and high cost,
uncompetitive skilled labour for firms in urban areas.

4.2 Productivity is the underlying driver of wages and incomes. The priorities of this theme
focus on increasing worker productivity by encouraging a shift from agriculture to industry
and services and creating the conditions for higher worker productivity within each sector,
in conjunction with the other three EDPRS2 thematic strategies on Rural Development,
Economic Transformation, and Accountable Governance.

4.3 Jobs are central to all of our lives. We spend most of our time at work, trying to make a
living. It’s not just about what we earn our work fundamentally defines who we are as people,
with important implications for our social relations and psychological well-being.

4.4 The overarching goal in this thematic area is to move Rwanda from an agriculture-based
economy to an industry and services-based economy. Vision 2020 aims for half of the
Rwandese workforce to be working off-farm by 2020, up from just 28% today. This is because
off-farm workers are five times more productive than farm workers, and are 50% less likely to
be in poverty. Reaching this goal will require creating an additional 200,000 off-farm jobs per
year.

Key terms

Productivity – There are several ways of defining productivity – in this chapter

“productivity” refers to labour productivity – the amount of output produced per
worker.

Youth – In Rwanda the definition of youth is all those aged 14-35

Employment, Unemployment, and Underemployment – By the ILO definition, anyone

working at least 1 hour per week is “employed.” As a result, unemployment in low-
income countries with weak social safety nets such as Rwanda is typically very low.
The main challenge in countries like Rwanda is underemployment, where people work
fewer hours than they would like to each week.

60
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

What do Rwandans do?

4.5 Of the overall working age population (those aged above 16), 84% are in employment and
16% are not working.

4.6 Farm workers make

up 60% of the working
age population. This
represents 3.5 million
people whose main
occupation is farming.
They are mostly poor,
live in rural areas, have
low education, and are
underemployed, working
an average of around 26
hours per week.

4.7 Informal workers make

up 17% of the population.
There are almost 1 million
people whose main
activity is in the informal
sector. These workers
carry out a variety of
activities, the largest
portion of which is retail
or petty trade. Other prominent service industries include maids and tailors, construction
workers and drivers. Most informal sector workers have not completed primary school. Their
income is generally higher than farm workers but not as high as formal sector workers.

4.8 Workers in the formal (private) sector are just 4% of the population. There are around
250,000 people working in the formal private sector, just under half of whom live in cities.
They are most likely to
be high income, live in
urban areas, and have
education. They work in
similar secondary and
tertiary industries to the
informal sector, but work
for slightly larger formal
sector firm. Typical
occupations include  
drivers, mining workers, retail and construction. This category includes some professional
white-collar workers but these are small in number – for example, there around 4,000
accountants working in Rwanda.

61
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

4.9 Workers in the public sector

make up 3% of the population.
This group is mostly made up
of teachers, nurses, the military
and government officials.
These workers also tend to
have relatively high income and
levels of education.
 
Who doesn’t work in Rwanda?
4.10 There are three main groups of people who are not working: the “inactive” (comprised of
elderly, disabled people and domestic workers), students and the unemployed.

4.11 The largest group of people

 
not working are students, who
make up 11% of the working
age population. The majority of
these 667,000 people are still
completing secondary school,
but some are also in tertiary
education.

4.12 The 215,000 “inactive”  

people make up 3.6% of the
population. These are mostly
 
the elderly, disabled and
domestic workers. Most live in
rural areas.

4.13 The smallest group is the

long- term unemployed, just
46,000 people (0.9% of the
population). These people  
typically have a secondary
school qualification, live
in Kigali, and come from a
relatively high-income family.
Many are “queuing” for a formal
sector job rather than engaging
in informal sector activity or
starting their own business.
 
What is Productivity and Youth Employment?
4.14 This thematic area focuses on labour productivity – output per worker – rather than any
broader measure of productivity such as Total Factor Productivity (TFP). Rising labour
productivity is vital for higher incomes at the individual level and for economic growth at

62
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

the national level. Rising productivity is also a key driver of innovation. The fundamental
conditions for improved productivity are the same as those for entrepreneurship and job
creation in general, i.e. the rule of law and a stable business environment.

4.15 Education, skills and technology are the key drivers of productivity. There is strong evidence
of a causal relationship between skills and growth in incomes. This evidence reveals that
it is not just the years of education that contribute to economic growth, but the quality of
the education that is received and the skills that people acquire. The resources allocated to
improving the quality of education throughout the entire school system are of vital importance.
It is also critical that we measure learning outcomes and not just school enrolment (though
this is also important).

4.16 Jobs are the key link between economic growth and poverty reduction. In order to ensure
that growth is inclusive and broad-based, businesses need to be expanding and taking on
new hires, individuals need the skills and capital to engage in the economy, and employers
and job-seekers need to be able to find each other.

4.17 Employment has remained high despite increasing numbers entering the workforce. This
has been because of a strong and growing economy and investment in infrastructure.

Figure 4.1 Large increases in Employment and Students

Source: EICV 1 – EICV 3

People aged 7000

16+
6000
(in 000s)
5000

4000
Other inactive
3000
Student
2000
Unemployed
1000
Employed
0
EICV EICV EICV
2000/2001 2005/2006 2010/2011

4.18 The majority of new off-farm jobs are in micro, small, and medium sized enterprises

63
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

(MSMEs) in the informal sector. Over 90% of firms in Rwanda are informal, and have 3 or
fewer employees (NISR 2012). The sectors with the largest non-farm job growth in the past
5 years have been retail (30,000 net new jobs per year), construction (16,000), government
(14,000), and transport (7,000). This reflects rising incomes and increased demand for goods
and services, increased urbanisation fuelling housing demand, and a large expansion in
government provided education and healthcare. Despite being off- farm, most of these jobs
(82%) have been created in rural areas. Young people and those with some basic education
are more likely to be employed off-farm than older uneducated people.

4.19 Net attendance rates at secondary school level have doubled over EDPRS1, from 10.4% to
20.9%, showing rapid progress, but still a long way to go to get to universal enrolment. Gross
attendance rates (including those above age 18) are twice as high at 41%.

Strategic Framework
4.20 The interventions for the Productivity and Youth Employment thematic area have been
chosen in order to address the key challenges and contribute to the attainment of the
objective of ensuring good jobs for all. The interventions are able to provide a comprehensive
solution through the life cycle of each Rwandan.

4.21 The primary focus is on creating opportunities for the 77% of the population in the farm
or informal sector to prosper and for the students currently in education to find a decent
job when they graduate. Attention is also paid to reducing urban unemployment, which
represents a waste of skills.

4.22 The first thing necessary to obtain a decent productive job is to have the right skills. The
right skills need to be built upon a solid foundation of effective ECD and primary schooling
which equips students with the necessary cognitive and non-cognitive skills. It is crucial that
these investments are made in building skills for the future, but this chapter focuses on the
interventions focused on higher level skills which will have an impact over the short-term.

4.23 As well as the right skills, the right tools are necessary to create decent productive jobs. The
government will focus on expanding access to ICT and other technologies which can enable
higher productivity. But skills and tools are useless if there are no jobs. Ensuring continued
strong economic growth, further improvements to the business environment and direct
support to entrepreneurs, will be crucial to supporting private sector job creation. Finally, in
order to ensure that urban unemployment is kept to a minimum, there need to be effective
support services that can match job-seekers to vacancies.

4.24 The priorities set out in this chapter focus on creating jobs in the off- farm sector. Increasing
agricultural productivity will be crucial for releasing surplus labour and creating demand for
new non-farm jobs in rural areas, but interventions associated with agricultural productivity
are contained in the Rural Development chapter.

64
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

4.25 There are three transitions which need to be made for success in productivity and youth
employment:

• the movement of farm workers into microenterprises and SMEs;

• the growth and formalisation of existing small businesses;
• the growth and expansion of the formal sector.

Figure 4.2: Strategic Framework for Productivity and Youth Employment

Underlying Drivers of Challenges that could

productivity and youth jeopardise productivity Strategic Direction
employment and youth employment

1. Productivity is driven by 1. Current job growth is no fast 1. New job creation through
education and economic enough and needs to more the private-sector SMEs
transformation - moving than double 2. Creating off-farm jobs
from farm to off-farm 2. A slowing economy would which are more productive
2. Private sector job make this even more than farm jobs
creation is underpinned difficult 3. Improving the work
by a strong economy 3. Employer feedback on relevance of education
and stable macro- TVET graduates is mixed 4. Linking SMEs to large firms
economic environment
4. Few employers provide 5. Leveraging ICT to raise
training for internships productivity in the public
5. Employment policy lacks and private sectors
coordination
6. Rwandan youth lack
self-reliance and an
entreprenuerial mindset

The Productivity and Youth Employment Objective for EDPRS 2

“All Rwandans have a stake in the continued economic growth of Rwanda through
access to fulfilling and productive work. All Rwandans who are able to work make
a positive contribution to Rwanda growing into a middle-income country through
increased productivity”

4 Priority Areas for Productivity and Youth Employment

1. Skills and Attitudes

2. Technology and ICT
3. Entrepreneurship and Business Development
4. Labour Market Interventions

65
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Four Priority Areas

Priority 1: Skills and Attitudes

4.26 Skills are a key driver of productivity and wage increases. As well as increasing productivity
and incomes, skills development will be essential for staffing the business requirements of
emerging sectors of the economy anticipated in the Economic Transformation Theme. Some
key sectors in need of building critical skill for economic transformation include transport,
energy, mining, hospitality (including basic mastery of international languages such as
English and French), IT and trade logistics while some sectors will require the development
of basic skills for massive job creation, including literacy and numeracy, skills related to trade,
construction, transport, agro-processing and light manufacturing. Improved literacy will
contribute to better access to skills and information for farmers in the Rural Development
Theme. A more informed citizenship will contribute to the demand-side of accountability for
the Accountable Governance Theme.

4.27 The attitude of young people is also a driver of their productivity. Many Rwandan youth lack
a culture of Entrepreneurship while some youth perceive a certain kind of jobs as jobs for
second zone citizens. This further translates into a negative attitude towards learning skills
related to those perceived blue-collar jobs.

Priority 2: Technology

4.28 The development of Information and Communications Technologies (ICT) has applications
in every sector of the economy and cuts across the other priorities of the thematic area.
Improving the internet and mobile phone infrastructure will continue to bring down the costs
of sharing information, which has been shown in other countries to increase business efficiency,
agricultural and labour market efficiency through quick price and information sharing, and
reduce communication and payments costs for consumers. Encouraging the growth of the
mobile money sector through responding to the specific needs of businesses in the sector
will facilitate access to financial services. There are also substantial numbers of jobs that can
be created directly by the sector, through sales, repairs, servicing, and software development.

Priority 3: Entrepreneurship, Access to Finance and Business Development

4.29 The top priority to increase off-farm employment and productivity is new job creation
driven by the private sector. This priority will depend crucially on the foundations of a solid
macroeconomic environment. Achieving new job creation relies critically on: the Economic
Transformation Thematic Area to drive economic growth on the Rural Development Theme to
improve agricultural productivity and free up labour to move into the non-farm sector, as well
as to increase rural incomes and market demand for new products, and on the Accountable
Governance Theme for the essential rules of the game and underpinnings for the market and
effective service delivery.

4.30 Creation of a National Employment Programme. In addition to getting the foundations

right, the government will consolidate, rationalise and expand different business support
programmes into a National Integrated Employment Programme to boost entrepreneurship
and job creation.

66
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Priority 4: Labour Market Interventions

4.31 A key emerging challenge in Rwanda is unemployment amongst skilled youth especially in
urban areas. Although the number of unemployed is relatively small, it represents an important
waste of human capital, and suggests that graduates may not be obtaining the skills that
firms need. It is important that the labour market operates as efficiently as possible, and that
job-seekers are able to find the job vacancies that exist. There is a key role for government in
smoothening this search process through active labour market policy, assisting job seekers to
find vacancies through Employment Service Centers, Career Advisory Services for students
and collecting viable statistics on employment and labour.

Priority Area 1: Critical Skills and Attitudes for Service and Industrial Sectors

4.32 All skills need to be built upon a solid foundation of basic skills such as literacy, numeracy,
language and social skills developed through quality Early Childhood Development
(ECD) and primary education. Basic education is foundational for the whole EDPRS2. The
interventions included in this chapter focus on those interventions in education and skills
which can create an impact over the next five years, focused on the higher level skills and
work-focused training. These interventions will be key to capacity building for priority sectors
during EDPRS 2. Education personnel and teachers with skills in inclusive and special needs
education, will be increased in order to promote social inclusion.

Outcome 1.1: Curricula for educational institutions meeting skills requirements of

employers

4.33 As Rwanda continues to scale-up universal secondary education and 12 full years of basic
education, it is crucial that those graduating from secondary school are equipped with the
right skills to ensure that they can obtain productive work after graduation. This will require
a careful review of the school curriculum to ensure that the key transferable soft skills that
employers need are being provided to all secondary graduates, academic skills as well as
communication and team-work skills.

4.34 A work-focused school system will have a significant impact on the employability and
productivity of the workforce providing skills that are transferable to situations commonly
experienced in employment. ‘Soft’ skills in problem-solving and interpersonal communication
as well as specific skills in basic literacy and numeracy, language skills including a basic mastery
of international languages, ICT and financial literacy, are essential to a productive workforce.
A strong focus on Maths, Science and English will be fundamental to laying this foundation in
the school system. Investors are attracted to destinations where the local labour force has the
required skill set at a competitive price and education can also have a large role in fostering
an entrepreneurial skill set.

4.35 The Education Sector will conduct a comprehensive review and reform the national curricula
from primary through to higher education, to ensure that students are equipped with job-
oriented skills. In addition to the basic human right of access to education, schooling should
be judged according to how much value added students receive in terms of their economic

67
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

potential, i.e. their gain in productivity. In terms of aligning with market needs, higher secondary
schools will integrate entrepreneurship in their curriculum.

4.36 Sector Skills Councils will be established to provide a forum for feedback and discussion to
ensure that employers’ voices are heard throughout the policy-making process for skills and
TVET policy. The first Sector Council has already been established in the mining sector, with
plans to roll out councils for the other seven priority RDB sectors (construction, agriculture,
energy, trade & manufacturing, financial services, ICT, and tourism). RDB has identified four
key objectives for every Sector Skills Council. These are: reducing skills gaps and shortages;
improving productivity and business performance; increasing opportunities to boost the skills
and productivity of everyone in the sector’s workforce, including action on equal opportunities
and improving quality and relevance of training for employment.

Outcome 1.2: Graduates prepared for job market with critical skills needed

4.37 As well as ensuring that the curriculum is right, there will be a new focus on ensuring the
quality of education across the system. Many of the core skills that employers need and that
higher learning is based on are learnt at primary school – literacy, numeracy, and non-cognitive
social skills. In addition, there will be an expansion in: TVET, and an expansion in internship,
apprenticeship, and industrial attachment programmes.

4.38 Technical and Vocational Education & Training (TVET) will provide specific skills to meet
labour market demand. Currently there is a low but increasing number of students in Rwanda
enrolled in TVET. In order to ensure TVET courses are successful, their design must be
demand-driven and both the education and PSD sector must coordinate to ensure this is
fulfilled. The sector skills councils will give private sector employers a voice in the entire policy
process of design, provision and evaluation of employment-focused education. Focus will be
on training for priority sectors with high potential for job growth including priority export
sectors contained in the Economic Transformation Thematic Area such as construction,
tourism and food processing. Courses offerings will also be tailored to local needs depending
on the location of vocational training centers.

4.39 Work experience opportunities through internships, apprenticeships and industrial

attachments will be pursued. Both academic and technical students can benefit from work
experience whilst still enrolled in full-time education (or directly after) through internships
and apprenticeships. In addition to gaining specific skills, this can increase the individual’s
awareness of the skills demanded by firms and can help them decide which subsector of
employment suits them. Whilst current initiatives exist led by individual private firms, some
education institutions and RDB, widespread access and take-up of productive internships
requires a national programme to mobilise the private sector. Without getting the private
sector on board, any initiative will not succeed. Mobilisation will target large national and
international firms, but also local smaller firms through district initiatives. The education sector
will be responsible for information dissemination to students, although TVET institutions and
HLIs may consider a more active role.

Outcome 1.3: Access to skills training for adults

68
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

4.40 In addition to the foundation of skills offered by the mainstream system of schooling, there
is also a need for education focused on adults. Rwanda cannot afford to wait for the current
generation of children to enter the labour market: it needs to provide farm workers with the
basic skills and education they need to move into the non-farm sector in the short to medium-
term. As well as basic adult literacy training provided by the Ministry of Education, other
government agencies are also involved in the provision of specific job- and business-focused
training as part of the consolidated Integrated Employment Programme.

4.41 Adult literacy will help create a more productive work force. The majority of agricultural
workers have no education qualifications and adult illiteracy remains an issue. Often basic
literacy skills are required in off-farm employment, including for access to further training
and finance. Basic financial literacy courses will also be provided, focusing on short “rule of
thumb” courses on financial access and management, which have been proven to increase
earnings. More than 3 million people are targeted to be reached out by literacy courses and
the national financial literacy campaign.

4.42 Short-term basic skills training courses will create new skills or augment existing skills. Many
off-farm jobs require technical skills or prior experience that may be difficult to acquire in rural
communities. Local level initiatives to increase access to skills and training will help equip rural
workers with productivity and employability-enhancing skills. These should target competitive
labour intensive subsectors such as agro-processing, retail, construction, transport, hospitality
and light manufacturing.

Outcome 1.4: Decreased critical skills gaps

4.43 Diaspora and international talent can relieve job market bottlenecks and add value to the
productivity of the work force. Whilst investing in skills for the future, Rwanda will seek to
fill temporary skills by attracting skilled individuals in priority sectors from the Rwandan
Diaspora, the EAC and the international community, through identifying the talent that exists
in the Diaspora, encouraging return and skills transfer and advertising critical skills vacancies
internationally.

4.44 Student loans will be focused on critical skills areas. In order to get the investment Rwanda
needs to achieve Economic Transformation, there needs to be enough skilled workers
available at a competitive price. The priority sectors for Economic Transformation are existing
sectors such as agriculture, construction, tourism and food processing. Investment will also
be made into the administrative and IT skills which will be necessary for a range of emerging
opportunities such as in BPO and financial services.

Outcome 1.5: Changing attitudes to work

4.45 A key part of the challenge in reducing underemployment and unemployment amongst the
young in Rwanda is to do with attitudes. Youth attitudes towards work are still poor, young
people tend to overlook certain kinds of job such as blue-collar, in preference of white collar
office jobs. This further translates into a negative attitude towards learning skills related to

69
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

those perceived blue-collar jobs. There is also a need to build and fortify an entrepreneurship
culture among Rwandan Youth.

4.46 A national Youth Mentorship Programme will be developed, with the goal of raising
awareness amongst the youth about the opportunities that are available, in the private sector
and through government schemes. The programme will inculcate a culture of hard work,
entrepreneurialism and independence. Modelled on the successful community health worker
programme, local government will coordinate a network of successful entrepreneurs to
provide regular monthly guidance sessions with youth in which they can impart knowledge
and skills.

4.47 Improving equality in attitudes to work for women will enhance the productivity of the
work force. The 2010 National Gender Policy aims to significantly reduce the number of
women involved in the care economy through training and facilitating access to credit. The
government will also run a campaign to improve women’s position in the labour market and
to change attitudes towards the kind of jobs that men and women can do.

Priority Area 2: Technology and ICT

4.48 The ICT sector has a key cross-cutting role to play in supporting businesses, skills and public
service delivery. Development of ICT capacity will be essential for reaching the Vision 2020
goal of transforming Rwanda into a knowledge-based economy.

4.49 For the private sector, mobile phones have been shown to increase market efficiency by
providing quick and easy access to market prices in different locations, so producers can
ensure that they are getting the best price for their product without travelling long distances.
In addition all businesses can benefit from cheaper communications and mobile money
transfers. Technology such as electronic cash registers, accounting software and e- payments
can increase business efficiency and mobile money also eases access to financial services.
Finally, the developing ICT industry can be a source of good quality jobs directly servicing
businesses and consumers, in sales, hardware repair and software development. The use of
automation in the manufacturing sector of Rwanda has got the potential to increase efficiency
and productivity.

4.50 Rwanda has a shortage both in terms of the quality and quantity of skilled personnel to drive
ICT development as well as achieve VISION 2020 targets to develop required skills for a
knowledge-based society. Skills development is a national priority and also a foundation for
the achievement of NICI III as well as VISION 2020.

4.51 Rwanda will continue to collaborate with the EAC on regional ICT infrastructure and regulatory
requirements. This will include improving Rwanda’s broadband networks and reducing
connectivity costs through the Regional Connectivity Infrastructure Programme (RCIP), and
harmonising cyber laws through the EAC Legal Framework on Cyber Laws.

Outcome 2.1: More productive private sector

70
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

4.52 Improving Private Sector Efficiency through accelerated technological innovation. Rwanda
will deploy last mile connectivity (Access Network) through a PPP framework, to ensure that
businesses can get access to high-speed internet at low cost. To encourage the development
of mobile money banking, regulations will be harmonised with regional and international
operators. One important aspect of improving efficiency through the use of IT technology
is related to cashless financial transactions. There will also be business opportunities for the
private sector from the outsourcing of Government ICT-related support work, and through
public-private partnerships developed to promote infrastructure and to promote and facilitate
the acquisition of services developed by the ICT Private sector.

4.53 A complimentary area of focus will be improving ICT Skills. This will build ICT professional
skills and leverage ICTs in education in order to accelerate skills development. The scope of
the skills development is twofold: first, build ICT professional skills that will increase innovation
in the ICT industry and enable all sectors of the economy; and second, to leverage ICT in
education. For schools, MYICT will ensure that all schools are connected to ICT infrastructure,
that technical support is available, and that teachers are trained in basic ICT skills. ICT
Professional Certification courses will also be incorporated into the teaching curriculum at
institutions of higher learning.

Outcome 2.2: More productive public sector

4.54 The public sector will become more efficient in delivering public services. Rwanda is currently
experimenting with a range of innovative ICT deployments to improve the efficiency of public
service delivery. SMS-based data collection systems are being piloted by MINISANTE for birth
and death registrations and MINEDUC for live school attendance records. These innovations
will be evaluated and scaled up across the country of they are shown to be effective.
Plans are also made for a Land Administration Information System (LAIS). All government
offices (including local government) will be equipped with appropriate ICT infrastructure
and applications. Hospitals and health centers will have improved connectivity, including
RapidSMS and mUbuzima systems. In order to improve its efficiency in delivery, the public
sector has been promoting e-transactions; this will be further strengthened through the review
of processes and systems requirements to encourage, wherever possible, the systematic use
of e-transactions such as e-procurement, e-tax filling and payments in addition to the already
existing e-business registration and visa applications. The government will further encourage
the development of a paperless public administration.

Priority Area 3: Entrepreneurship, Access to Finance and Business

Development

4.55 The most important priority for growth, job creation and productivity is that Rwanda maintains
a stable macroeconomic policy and continues to improve its business environment. Growth
in incomes creates demand for goods and services, which create jobs and incomes for other
Rwandans. However as well as ensuring these fundamentals are present, government can also
go further, and target policies specifically to unlock the demand side constraints to growth for
household micro enterprises and SMEs, as well as attracting large labour-intensive firms.

71
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

4.56 This Thematic Area presents a consolidated single Integrated Employment Programme,
pulling together and rationalising all of the individual public sector job creation, skill and
employment financing projects that have been run by different government agencies.

4.57 At present the majority of Rwandans work in agriculture, which is also the sector with the
lowest wages and lowest labour productivity. Moving large numbers of citizens from agriculture
to the off-farm sector is crucial for reducing poverty, achieving economic transformation,
and attaining the Vision 2020 goals. Poverty rates for those working in agriculture are 60%,
compared to just 23% for those working off-farm. The numbers of people involved in this
transition are too large for targeted government employment programmes to cover everyone.
The route out of agriculture for the majority will be gaining access to private sector jobs
generated by a growing economy, accessed through basic education.

Outcome 3.1: Increased MSME businesses

4.58 Existing informal sector SMEs represent a large source of jobs. If the business environment
for these firms can be improved, they can become more profitable, increase in size, and enter
the formal sector – and in doing so create more jobs and contribute more to government
revenues. At present there are over 1 million informal sector household enterprises in Rwanda
and less than 300,000 jobs in the formal private sector. Existing large enterprises account for
less than 5% of off-farm employment.

4.59 Reducing barriers to entry will support micro enterprise creation and sustainability. Rwanda
has made strides in creating a business environment conducive to private sector growth as
reflected in the World Bank’s Doing Business Rankings, but this particularly benefits large
firms and new investors. This rapid reform must be replicated at the household and SME level
if a foundation of innovative and job-creating local firms is to be created. Rules on planning
and zoning can restrict access by household and micro enterprises to operating locations
close to foot traffic and customers (World Bank 2011, Sommers 2012). Government will review
the operating environment for informal sector microenterprises with a view to removing
constraints, as well as establishing new forums for dialogue with small businesses.

4.60 Improving access to finance will help small enterprises. Finance enables farmers and off-
farm producers to invest in capital and technology whilst protecting against risk during low
turnover periods. SACCOs and other micro credit institutions can play a major role through
communal saving and lending. The Financial Sector Development Strategy outlines in detail
how the financial sector will be strengthened, improving access to financial services for
firms of all sizes. Access to finance is an important constraint for firms of all sizes in Rwanda.
Specific activities include both direct intervention through the encouragement of further
growth of SACCOs, and building the market infrastructure and financial institutions necessary
to promote private sector development. The ICT Sector Strategy also focuses on getting
up to speed with regional standards on mobile money as a means of financial inclusion.
Efforts will also be made to mobilise domestic resources, through exploring measures such
as establishing an alternative investment market for SMEs, approaches for enhancing private
equity and venture capital funds and establishment of a Rwanda Fund of Funds.

72
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

4.61 Limited experience of local small businesses and lack of awareness of opportunities in off-
farm employment, call for mentoring, awareness and market information. In addition to
Business Development Centers, RDB will also run outreach programmes, providing market
information to farmers and potential entrepreneurs about different opportunities. RDB will
also look at business activities in other EAC countries to identify opportunities for borrowing
business ideas which are not operating in Rwanda at present and which could be transplanted.
Specific attention will also be paid to ensuring adequate access to mentoring and advice for
women as they are currently less likely than men to make the shift from farm to off-farm work.

4.62 Integrated business development services linking to grants and loans, will provide both
capital and training. As well as improving financial inclusion and financial environment in
a broad sense, the government will also provide capital to promising firms directly through
a range of different schemes, such as the credit guarantees offered by the Business
Development Fund (BDF) and the challenge fund. The Integrated Employment Programme
for EDPRS 2 has a strong focusing on scaling up the provision of credit and grants to start-
ups, entrepreneurship training, and coordinated support across government agencies. A key
challenge for this programme will be identifying enterprises with high potential for growth in
productivity and employment for targeted support.

Outcome 3.2: Higher productivity amongst MSMEs

4.63 Direct interventions to support business development are most effective when they combine
access to finance alongside training and mentorship. The most effective training for micro
and small enterprises is based on simple “rules of thumb” for improving basic accounting
practices. The Business Development Centers established by RDB in each district will provide
business incubation, training, mentorship, access to IT facilities, and other government
services. Monitoring and evaluating the impact of policies focused on supporting household
enterprises will be particularly important as this is an area in which there is relatively weak
evidence about which interventions are effective. Clear criteria will also be established about
when support should end.

4.64 Cooperatives and associations allow for bulking up of activities and economies of scale. Many
micro-level enterprises serving small and fragmented markets find it hard to reach a point
where they benefit from economies of scale. Organising producers, traders and household/
micro enterprises into associations and cooperatives will provide increased access to support
services such as credit facilities, training opportunities, market information, and advocacy
(see World Bank Rwanda Economic Update, Nov 2011)

4.65 SME Product Clusters can drive development through knowledge sharing, innovation
derived from cross-fertilisation, and economies of scale. Many of the constraints to SMEs are
common such as access to finance, high energy costs, and low skills. However there are also
specific challenges facing different product clusters. In order to prioritise government support
to SMEs, MINICOM carried out a study in 2011 to identify the most competitive sectors in each
district. A detailed assessment was then made of the needs for the top product cluster in
every district, along with a set of strategic interventions designed to address these challenges.
The EDPRS District Development Plans incorporate these specific interventions.

73
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Outcome 3.3 Better linkages between large firms and small firms

4.66 Although large firms currently provide only a small amount of employment in Rwanda (5%
of off-farm employment), attracting large firms and ensuring that they are connected to
SMEs through backwards linkages can be a source of new jobs. Developing supply chains will
be prioritised so that SMEs can benefit from engaging with large firms. Many large firms in
Rwanda are “vertically integrated,” where they are forced into producing their own inputs as
they cannot find supplier firms in Rwanda.

4.67 Labour-intensive investment and ensuring linkages to SMEs will be targeted. RDB will focus
on job potential as well as productivity and revenue potential in its proactive engagement
and search for new investors in Rwanda. Targeted investment promotion (domestic and
foreign) towards large firms will provide opportunities for direct and indirect job creation. The
government will also establish supply chain linkages between large firms and local MSMEs,
through improving on existing business directories to ensure that all SMEs are included in
one online directory and are easy to find. Training for SMEs will be provided on how to bid
for contracts with large firms and engage with big business, including through district SME
product clusters.

Priority Area 4: Labour Market Interventions

4.68 A key emerging challenge in Rwanda is unemployment amongst skilled youth in urban areas.
Although the number of unemployed is not large relative to the number of underemployed in
the farm sector, this is an important waste of human capital, and also suggests that graduates
may not be obtaining the skills that match labour market demands.

4.69 The overall youth unemployment rate stands at 2.6% (16-24 year olds) compared to a national
rate of 0.9%. However in urban areas unemployment is much higher (13% in Kigali), and is
concentrated amongst senior secondary graduates (15%) and university graduates (6%). The
numbers of secondary graduates is going to increase, as the Education Sector Strategy plans
for universal provision of secondary education. Currently 11% of the population aged 16 and
over are students, representing 5% growth a year since 2006.

4.70 It is important that the labour markets operates as efficiently as possible and job-seekers are
able to find the job vacancies that exist. There is a role for government in smoothening this
search process, for instance through the establishment of the job information center, and
development of a system of monitoring labour and job information.

Outcome 4.1: Reduced unemployment

4.71 The first Employment Service Center is in the process of being established in 2013 by Kigali
City Council. The Center will provide a place for employers to advertise their job vacancies
to job seekers, and provide guidance and counselling about the labour market to job seekers
in Kigali. The Center will also provide information to employers about the skills that are
available. The effectiveness of the Employment Service Center will be evaluated with a view
to expansion to other major cities. Similar job advice and job vacancy advertising services will
also be provided through the National integrated employment programme.

74
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

4.72 The establishment of Career Advisory Service Centers run by higher education institutes and
universities. RDB provides training and capacity building on how to run these services, which
are then provided by the education institutes. These centers provide information to graduates
about the labour market; give advice and counselling about job search, applications, and
interviews. RDB will push for the expansion of these services to major secondary school and
TVET providers. Existing tertiary institute Advisory Centers will also be made accessible and
advertised to secondary school graduates.

4.73 Social protection can play a key role in supporting labour market activity by individuals, both
through the direct VUP public works scheme, and through direct cash and in-kind social
protection support. Social protection supports labour market activity by allowing households
to manage and deal with the consequences of risk and negative shocks to their income. A
social safety net can allow households to make risky investments with large but uncertain
pay-offs. Without such safety nets, households can be stuck in poverty traps. Supporting
households through shocks can also ensure that children are not withdrawn from school in
order to work, damaging investment in their future productivity. VUP support will continue to
be expanded to larger numbers of people to increase its coverage of the poor.

4.74 Development of a system of monitoring labour and job information. The labour management
information system will be fully operationalised to ensure statistics on employment and job
creation can be monitored effectively and provide pointers to policy makers of emerging
issues and allow observation of progress.

4.75 Priority Area Outcomes together with Interventions are to be found at Annex 69

75
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

5. ACCOUNTABLE GOVERNANCE

Introduction
5.1 The first pillar of Vision 2020 is good governance and a capable state. Social and economic
transformation is equally about the state as it is about markets. The role of the state and
the way it governs and accounts for itself is indispensable in creating the service culture
and values for wealth-creation and quality of living. The main objective of the EDPRS 2
Accountable Governance thematic area is to advance a prioritised approach to governance
that is capable of promoting and strengthening accountable governance in Rwanda. GoR is
committed to strengthening public accountability, transparency and efficiency in deploying
resources and delivering services. Over the period of EDPRS 1 and the PRSP, promoting good
governance has been central to Rwanda’s development strategies. Accountable governance
is even more central than in the past because of its ability to facilitate citizens’ participation
and empowerment whereby local communities are enabled to participate meaningfully in
making decisions on issues/projects that affect them most, and thereby help ensure that
development is sustainable and poverty is reduced. The broad objective of the accountable
governance thematic area is:

Accountable Governance Objective for EDPRS 2

“Enhance accountable governance by promoting citizen participation and mobilisation

for delivery of development, strengthening public accountability and improving
service delivery”.

The objective envisages empowering Rwandan citizens by engaging them in formulating,

executing, monitoring and evaluating policies and strategies for accelerated growth and poverty
reduction. This also implies raising their awareness of development policies and allowing citizens
to be dynamic drivers in a really participatory way of the development agenda. Accountable
governance underpins all the other themes since citizen participation is an essential ingredient of
sustainability of development programmes.

What does Accountable Governance mean for Rwanda?

5.2 Accountable governance is a subset of the broader good governance principles and values
drawn from good political, economic and corporate governance. In particular, accountable
governance focuses on the political and administrative accountability of public office holders
(elected representative and government officials) to citizens. Accountable governance is
underpinned by democratic mechanisms that enable citizens to play an active role in decisions
that affect their lives.

5.3 The governance programme under EDPRS 1 achieved substantial progress in areas such
as decentralisation, public financial management, the promotion of democracy, unity and
reconciliation, regional integration and the fight against corruption. Achievements were also

76
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

registered in access to justice, legal aid and resolving the case backlog by use of traditional
tools such as Gacaca courts and Abunzi, traditional Rwandan ways of resolving disputes
through locally applied reconciliation methods.

5.4 During EDPRS 2, Rwanda will focus on the improved service delivery, further decentralising
services closer to citizens and participation of citizens in planning and delivery of development
for improved citizen centeredness of the development agenda and process.

5.5 The key elements of accountable governance for Rwanda involve

• public accountability;
• citizen empowerment and participation in decision making;
• and ensuring effective service delivery.

5.6 In other words, Public accountability for Rwanda means ensuring that citizens and
communities and stakeholders (CSOs, donors), monitor and track government actions and
question their impact on development. Public accountability will also mean participatory
monitoring and evaluation of EDPRS 2 and of other national development programmes (such
as the Government 7 Year Plan 2010-2017) from the community level.

5.7 Citizen empowerment and participation in decision making at the grass roots level entails
more frequent and interactive engagement between local level leadership and citizens at all
levels supported by key players (NGOs, CSOs, CBOs, development partners and communities).
This requires the development of appropriate mechanisms to build community capacity, to
allow them to identify, assess and assert their priorities in local development planning, and to
hold their leaders to account.

5.8 Ensuring effective service delivery is also critical for Rwanda and part of the public
accountability delivered to the citizens. Indeed, service delivery will be emphasised in all
domains including for the private sector. Decentralisation policy for the public sector has
been accelerated due to the overarching objective of taking services close to the citizens in
an efficient manner.

Strategic Framework
5.9 Evidence from citizen score cards shows that one of the main weaknesses under EDPRS 1
was that little effort was put into mainstreaming citizen participation thereby empowering
citizens to ask questions, especially of their elected, decision making representatives. Service
delivery was also identified as an area for improvement in the future with general satisfaction
measured at below 70%.

5.10 EDPRS 2 will target selected priority areas to address these challenges in the next five
years. The main task is to ensure the accountability of institutions by allowing citizens more
free access to information and providing and enabling the right forums for raising questions,
thereby strengthening the relationship between citizens and the institutions that affect their
lives. To achieve the broad objective and high level outcomes of Accountable Governance,
the proposed strategy prioritises two areas of focus. The two priority areas are detailed in 0
below and the corresponding interventions are developed in the section that follows.

77
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Figure 5.1 Approach Used to Develop the Objective and Priority Areas for the Accountable
Governance Strategy

Pre-requisites for Challenges that could

Accountable Governance jeopardise Accountable Strategic Direction
to happen Governance

1. Public accountability 1. Limited citizen participation 1. Focus on citizen

2. Citizen empowerment in and ownership of participation and
decision making development process mobilization for delivery the
2. Weaknesses in the development products and
3. Engagement with
decentralisation programme services
constitutional and policy
decision making 3. Weakness in protecting 2. Focus on efficient service
rights and rule of law delivery
4. Enabling operating
space for civil society 4. Poor service delivery 3. Focus on public
and citizen participation accountability and
5. Poor communication
democratic governance
5. Ensuring efficient service capacity and strategy
delivery 6. Weak Media and CSOs
sectors

Accountable Governance Objective for EDPRS 2

“Enhance accountable governance by promoting citizen participation and mobilisation

for delivery of development, strengthening public accountability and improving
service delivery”

2 Priority Areas of Accountable Governance

1. Citizens’ participation in delivery of development and strengthened public accountability

2. Quality service delivery

5.11 The specific objectives of Accountable Governance are to:

(1) Maximize citizens’ participation and ownership of the national development process, and
strengthening demand for accountability

(2) Ensure quality service delivery through providing appropriate feedback from citizens to support
growth and poverty reduction

78
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

5.12 In order to achieve these objectives the following strategic priority areas for interventions
have also been identified. 1) Strengthening citizen participation, awareness and demand for
accountability, and 2) Ensuring service delivery.

Priority Area 1: Strengthening Citizen Participation, awareness and demand

for accountability

5.13 One of the justifications for strengthening citizen and community participation is the need
to understand and develop the critical connections between participation, accountability
and quality and sustainability of service delivery. Rwanda has been conscious of this fact and
has demonstrated the need for increased participation through several policies and strategies.
These have included the decentralisation policy itself, creation of the Citizen Report Card
(CRC) system, establishment of the Office of the Ombudsman, existence of the national
dialogue, public accountability days, district Joint Action Development Forums (JADFs), etc.

5.14 Citizen participation in decentralisation includes consulting and listening to local people
and being open to local innovation. It is also about letting citizens participate directly in
decision-making at their local level. Citizen participation in development projects generates
better outcomes, because of increased ownership, and improved conceptualisation and
implementation of projects. Accountability is reinforced when there is better understanding
of development programmes, hence the need for enhanced information and communication
mechanisms.

5.15 As citizens are participating more actively in the planning processes and in delivery of
development programs and as their awareness increases through improved development
communication, ownership will also augment with the demand for accountability. To further
reinforce this, improvement is planned for in the area of information impartiality, independence
and involvement of media and CSOs.

5.16 To increase citizen participation, awareness and demand for accountability, three sets of
interventions are proposed: 1) using “home grown initiatives” to promote citizen participation;
2) using ICT to promote participation and development communication; and 3) strengthening
administrative decentralisation.

Outcome 1.1: Increased citizen participation in planning processes and solving their
own problems

5.17 Using “home grown” initiatives to promote citizen participation. Home grown solutions
were a success story of the EDPRS 1. These included programmes like Ubudehe, Gacaca,
Umuganda, and Girinka among others. These programmes were founded on national and
community values and cultural principles, and have been found to be cost effective and
sustainable. EDPRS 2 strategies will encourage the active engagement of the citizenry to
identify and promote community development programmes based on the same values and
principles.

5.18 Some of the innovations will involve strengthening “home grown” and existing programmes
such as the Umuganda and Umugoroba w’Ababyeyi. For example, monthly Umuganda

79
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

and Imihigo exercises can be linked to provide an avenue for citizen participation not only
for community and planning processes, but also as an opportunity for feeding back to
community and district authorities, including on the monitoring and evaluation of community
development projects. These ‘home grown’ initiatives and their participatory processes will
also provide an opportunity to promote gender equity and address issues of disability, youth
and social inclusion.

Outcome 1.2: Enhanced information flows and participation of the population

through established and new channels

5.19 ICT will be used to promote participation and the development of communication with
the citizenry. Information technology will play a critical role in communication and will help
bridge the gap between leaders and citizens. To empower the latter, they will be given free
access to information through, for example, the use of mobile based applications such as
twitter, that allow interaction and feedback to be promoted.

5.20 To promote local economic development through citizen participation, local community
radio stations will be further exploited as sources of local information, discussion and
exchange of ideas on key issues pertaining to local community development.

5.21 The CSOs and media will harness the potential for using local radio stations, thereby
strengthening their own outreach and civic accountability. For the purpose of providing
anonymous feedback, suggestion boxes will be installed at every cell (Akagari) for the local
communities to raise issues pertaining to their lives. The CSOs will be expected to manage
the boxes to raise the profile of citizen opinion forming and to hold leaders accountable. The
strengthening of demand for accountability will also involve interventions aimed at furthering
professionalism and development of the media sector by focusing on practical institutional
building, enhancing content development skills, extensive hands-on training and mentoring
in the full range of journalistic skills through the school of journalism. Action has already been
taken to ensure greater responsibility in the media through self-regulation. A law ensuring
free access to information has been voted by Parliament and sensitization will continue about
easing access to public information.

5.22 Accountability will further be strengthened through decentralised institutions and capacity
building of districts. With respect to administrative decentralisation, a key policy objective
is to match resource allocation with strengthened capacity of districts to plan, implement,
monitor and report. District councils will be encouraged to hold regular interactions with
constituents to update them on development programmes and to consult them on future
plans. Capacity building including sensitisation, training and monitoring, will be provided to
the JADFs and citizen assemblies/forums at district and community level.

Priority Area 2: Service Delivery

5.23 Service delivery is a priority that cuts across the public as well as the private sector. Rwanda
is targeting this area to improve its standing as a regional hub of excellence for service/
customer care. A culture of efficient and effective service delivery in both public and private
sectors will accelerate Rwanda’s progress towards the development targets set out in the

80
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

revised Vision 2020. Rwanda takes the issue of service delivery seriously in recognition of the
fact that public service delivery is the most important function of government officials, who
must be accountable to the citizens that they are employed to serve.

Outcome 1.3: Strengthened accountability

5.24 A citizen service charter has been passed by the Ministry of Local Government (MINALOC),
where detailed standards for services rendered at the district level, sector level and cell level
are set out, but more effort will be needed to put this in practice. There will be a need to
create performance indices to measure progress, not only in public sector but also in the
private sector, as Rwanda aims to be a regional hub in excellent service/customer care.

5.25 The main challenges for service delivery highlighted by citizen perception surveys conducted
on five key elements indicate that problem solving skills and timeliness were perceived as
among the worst service delivery and customer care elements. District level services were
indicated as needing the most improvement with 33% dissatisfaction.

5.26 New approaches will be employed based on creating customer satisfaction in delivering
public as well as corporate services. To revitalise service delivery in the public sector as
well as in the private domain, the GoR will embark on the following three interventions:
1) development of a customer-centerd service delivery culture as part of regular capacity
building; 2) the design and entrenchment of policies, processes and culture of customer
service; 3) the establishment an Institute of Customer Services.

Outcome 2.1: Improved citizens’ scores on the provision of services

5.27 For the development of a Service Delivery Culture, the main tools for reporting on service
delivery such as Citizen Report Cards and Service Charters have already been designed up
to decentralised level. Several campaigns have already been conducted and there are signs
of improvement, as citizens are more aware now of the standards that should be in place. This
will further be integrated into the civic education programme, school curriculum and tertiary
education to build a new generation that is customer centerd and sensitive to the ways of
service delivery in the modern era.

5.28 Integrating use of ICT in monitoring service delivery. ICT is a viable tool available for citizens
to provide affordable and easily accessible feedback on implementation of policies and
the nature of service delivery. Social media platforms and web-based applications will be
promoted with particular emphasis on applications that can be accessed through mobile
phones given the fast accelerating penetration rate.

Outcome 2.2: Improved awareness of service delivery standards and rights

81
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

5.29 A Five Star reward and recognition programme will be created for institutions that demonstrate
exceptional customer services. Forums for customer and citizen review of performance will
be established including radio, mobile and internet based forums where best performers will
be rewarded and poor performers exposed. The results of these reviews will include an annual
index of customer satisfaction that will be applicable to both the public and private sector.
An appropriate package of incentives and rewards will be developed for institutions that
demonstrate exceptional performance in different categories, sizes and locations. Excellent
service delivery will be promoted as something to aspire to in the Rwandan private and public
sector.

5.30 Facilitating building of the necessary skills and culture for service delivery will be strengthened
under the RDB. RDB will also influence employers who will support the training of customer
service professionals, including setting national customer service professional standards. It will
also be responsible for professional training and activities such as creating customer service
benchmarks and an annual index of customer satisfaction that will be applicable to both the
public and private sector. Thus, a culture and ethos of customer service will be entrenched
through making training the norm for public and private sector employees.

5.31 Priority Area Outcomes together with Interventions are at Annex 1.

82
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

6. FOUNDATIONAL AND CROSS-CUTTING ISSUES

Introduction
6.1 EDPRS 2 makes a distinction between thematic areas, foundational issues, cross cutting issues
and sectors. The thrust of EDPRS 2 is to point strategic directions and the sets of emerging
priorities that are critical at this stage of transitioning to middle income country status. The
emerging priorities are grouped under four thematic strategies with corresponding priorities
and interventions. Foundational issues reflect long-term ongoing priorities where, in many
cases, significant progress has already been made during EDPRS 1. Health and education,
public finance management (PFM) and justice, peace and stability are prominent amongst the
latter. Sector strategies cover both emerging priorities and the ongoing priorities embodied
in foundational issues. Foundational issues in the EDPRS2 are not defined as sectors, but can
rather be thought of as strategic areas that constitute the bedrock of Rwanda’s sustainable
development over the long term.

6.2 This section discusses a number of areas identified through the consultative elaboration
process as the most important foundational and cross cutting issues (CCIs). The CCIs
include: regional integration, gender, disability and social inclusion, disaster management,
environment and climate change, HIV/AIDS and non communicable diseases and capacity
building. An overview of the foundational and cross cutting issues is presented below.

Foundational Issues

Macroeconomic Stability

6.3 Over the period 2002-2012, the Rwandan economy has grown at an average of 8.3%,
inflation has been restrained to single digits, and the exchange rate has been largely stable.
Ensuring a stable macroeconomic environment will continue to be important as a tool for
social protection and productive activity. Investor confidence in the Rwandan economy
has been highlighted in the investor perception survey as one of the key factors in investor
decisions.

6.4 The EDPRS 2 will consider various incentive packages in terms of both fiscal and monetary
policy to stimulate private sector development, these interventions will be undertaken with
prudence. Public investment will be targeted at priority investments that demonstrate strong
linkages to enabling the growth of the economy, stimulating private sector development, and
poverty and inequality reduction while maintaining sustainable levels of public debt.

Demographic Issues

6.5 Rwanda has strategically chosen to look at its population as a vital human resource, the
desired outcome for which is a creative, healthy and wealthy population. The 2012 census
showed annual population growth for Rwanda slowing from 3.2% in 2002 to 2.6% in 2011,
though it remains among the highest in Africa. Over the same period, the population has
increased from 8.1 million to 10.5 million while population density increased from 321 persons
per square kilometre to 416 persons per square kilometre. This is the highest in Africa and
among the highest in the world. The decline in the population growth rate indicates the

83
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

success from the sustained campaign on responsible family planning, the increased uptake of
contraceptive methods for both men and women, and improved living conditions including
universal access to health and basic education.

6.6 Population growth remains an important issue for Rwanda due to limited land and increased
rate of urbanisation, which imply greater pressure on the environment and infrastructure.
Strengthening responsible family planning programmes, promoting contraceptive use and
ensuring a healthy population will be important in ensuring a productive population that can
contribute to the goals of the EDPRS2. Specifically interventions will focus on environmental
protection, pro-active and innovative infrastructure planning to anticipate population pressures,
improving quality of education and health, improved security and strengthening social safety
net mechanisms to reduce vulnerability. Innovations in reproductive health include: engaging
the private sector more to provide family planning services in a youth friendly manner and
integration of ICT and social media platforms to reinforce communication and behaviour
change campaigns.

Food Security and Malnutrition

6.7 With an increasing urban population, rising rural and urban consumption, and food shortages
in neighbouring countries, food security takes on increasing relevance. Rwanda was able to
achieve food self-sufficiency in 2010 through significant increases in the production of staple
crops driven by the CIP and stronger regional market integration. The supply of food, as
measured by kilocalorie availability, has increased over the last ten years from 65% to 129%
of needs. However household food consumption remains an important foundational issue:
44% of children under five years, and 47% of children under two years old suffer from chronic
malnutrition (stunting) according to the Household Demographic Survey (DHS 2010). Figure
6.1 provides an overview of stunting and food consumption patterns country wide.

Figure 6.1 CFSVA 2012 Nutrition and Food Consumption Map

84
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

6.8 Reducing Rwanda’s chronic malnutrition rates for children under two years old, from 47%,
is a prerequisite for Rwanda’s continued economic and inclusive development. Chronically
malnourished (stunted) children perform less well in school and are economically less
productive as adults. Research studies estimate that malnourished children risk losing 10% of
their lifetime earning potential, while malnutrition can cause countries to lose up to 3% of GDP.

6.9 Poverty and education levels, especially of the mother, are important factors for chronic
malnutrition, but stunting is a multi-faceted problem and for some districts the high levels of
stunting can still not be fully explained. An underlying factor is the feeding practice where 78%
of children between 12-23 months are fed on low-nutrient diets. The cycle of malnutrition often
continues through generations, furthermore, the physical and mental damage associated with
poor foetal growth and stunting are irreversible after the age of two. Intervention to minimise
the impact of malnutrition needs to start from conception and continue until the child is two
years old. Hence the EDPRS 2 emphasis on the early 1,000 days of a child’s life.

6.10 Under EDPRS 2, poor maternal, infant and child feeding practices will be addressed through
coordinated, strengthened and scaled up community based nutrition programmes and
information campaigns across the country. Early detection of stunting will be achieved
through interventions like growth monitoring and nutrition education for mothers and
caretakers. Chronically malnourished children will be referred to a programme for moderate
malnutrition (within the community) or to health facilities for severe malnutrition. In addition,
supporting the implementation of existing district plans to eliminate malnutrition will be a
priority. Communication campaigns to diversify household food production and consumption,
e.g. kitchen gardens, will be undertaken. Agriculture and social protection interventions will be
linked to reach the most vulnerable children, e.g. through school feeding programmes like One
Cup of Milk per Child. Programmes on bio-fortified foods will also be developed and the food
security information system will be strengthened.

6.11 Household food security relates very much to the stability of rural incomes in the face
of seasonality and crop failure. The priority will be to strengthen existing initiatives that
have increased productivity and have generated strong agricultural growth, both through
agricultural and animal resource intensification and training of farmers. The second key
strategic priority is value chain development (including nutrition-sensitive value chains, e.g.
milk), strengthening markets for agricultural products, empowering small-holder farming
systems, attracting increased private sector investment and reducing post-harvest losses. In
addition, interventions will be directed to the areas with lowest food consumption and highest
rates of malnutrition particularly in the districts which have high levels of extreme poverty.

Early Childhood Development (ECD) and Basic Education

6.12 The long term future of Rwanda will be built on the next generation whose development will
impact on the pace of development in the next 25 to 50 years. While EDPRS 2 focuses on
the next five years, it takes into consideration the importance of developing physiological and
cognitive capacities at an early stage of childhood development. The Vision for the ECD Policy
is that all infants and young children will fully achieve their developmental potential: mentally,
physically, socially and emotionally.

6.13 ECD is recognised as a vital foundation for learning, particularly for children from more
disadvantaged backgrounds who are less likely to start school at the correct age. This leads

85
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

to a large number of over-aged children in schools, placing a large burden on school finances
and infrastructure. Provision of pre-primary education through targeted school readiness
programmes or more general pre-primary education will help to ensure that children are ready
to start school on time and have begun to develop basic skills that provide a foundation for
learning at primary school and beyond. Studies have shown that investments in this area can
be a highly cost-effective approach to prevent inequalities later in life and to support future
learning. Key priorities in this area are the roll out of a one year school readiness programme
for 5 and 6 year olds across all districts, expanding to a three year programme over time for
4 to 6 year olds. Training of ECD care givers will also be emphasised as well as development
of community driven programmes that adhere to national ECD standards and guidelines.

6.14 During EDPRS 1, the large scale, innovative and cost effective 9 Year Basic Education (9YBE)
programme was a significant achievement in facilitating access of all children to basic
education, and was internationally recognised, winning the Commonwealth Education Good
Practice Awards for 2012. The primary level NER continues to improve for both girls and
boys and, at 96.5%, has surpassed the 2012 target of 95%. If progress continues to be made,
Rwanda will be on track to meet the MDG target of 100% net enrolment by 2015. The NER for
girls (98%) remains higher than for boys (95%). The primary school completion rate indicator
has reached 72.7% which is a significant improvement on the baseline figure of 52.5% in 2008,
but still falls short of the 2012 target of 78%.

6.15 However, the quality of primary education has not been able to match the pace of
improvements in access. The qualified teacher to pupil ratio at primary level stands at 62:1,
which is an improvement from the 2008 figure of 73:1. In the future, alternative measures of
education quality, such as the Learning Assessment in Rwanda (LARS) survey or Early Grade
Reading/Numeracy Assessment (2011) will be developed.

6.16 The key challenge for the education sector during EDPRS2 lies in consolidating, advancing
and accelerating the quality improvement measures already made. Interventions during
EDPRS 2 will focus on further reductions in average class sizes and pupil-teacher ratios, an
improved curriculum supported by better and more readily available teaching and learning
materials, and improved examination and assessment systems. A higher calibre of new teacher
recruits together with teachers who are better trained, better equipped and resourced,
better supported and managed, are strategies which will address the challenge of quality
improvements.

6.17 EDPRS 2 education interventions will also emphasise the role of partnerships with the
private sector, expansion of internships, competency-based curricula, strengthening the
development of catalytic and entrepreneurial skills in the curricula, and provision of careers
guidance. Increased public private partnerships will also increase financing available for
education, especially to support the implementation of the 12YBE strategy.

Improving Quality, Demand and Accessibility of Healthcare

6.18 Rwanda is on track to achieve the health related MDGs which was a major success story
of EDPRS 1. Under EDPRS 2, they remain a priority for the country. Access to health has
been a major achievement with over 90% of the population now covered by medical health
insurance. A major focus of the EDPRS 2 will be on improving the quality of health care
services, including the management of hospitals, while continuing to expand geographical and

86
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

financial accessibility through construction of health centers, support to the most vulnerable
or extremely poor through social protection mechanisms, and increased availability of drugs,
vaccines and consumables. The growing private sector and non-profit organisations, which
combined contribute about 33% of total health facilities, will continue to play an important
role in expanding access to and improving the quality of health care services. Government will
facilitate the private sector to play a greater role in the delivery of health care services.

6.19 Accessibility in remote areas has been improved with the development of community health
programmes. However, 27% of the population still needs more than an hour to reach the
closest health facility (<5km). Around 51 out of 416 sectors (12%) are still without a health
center and 15% of health centers still have no electric power.

6.20 Geographical accessibility will continue to be improved by investing in the expansion of

health infrastructure including equipping health centers and hospitals, construction of new
health centers and developing the feeder road networks to facilitate transportation and
electrification of remaining health centers. Community level access will also be supported
with the training of community health workers (CHW), strengthening CHW cooperatives,
mobilising communities for their full participation in healthcare provision through, e.g.
dialogue with religious leaders and engagement of civil society organisations in key health
related issues like contraceptive use and personal and environmental hygiene.

6.21 To improve financial accessibility, some key interventions will be: reducing fragmented
implementation of health insurance, continuing to improve allocation and targeting of financial
subsidies to the poorest, as well as ensuring that charges reflect ability to pay.

6.22 Strengthening of health personnel capacity, including training and recruitment of health
personnel in hospital management, specialised treatments, financial and procurement
management, are important aspects of continued health sector development. In 2011 the doctor
to population ratio was estimated at 1 doctor for 17,240 people. The gap to attain the doctor
to patient norm is estimated to be 930 additional doctors. To bridge this gap, the programme
on Continuing Professional Development (CPD) will be strengthened and extended to all
health professionals, and the quality of the training institutions will be further improved by
reinforcing international partnerships with external training institutions. Performance based
financing will be reviewed with a view to further improvements stimulated by other forms of
incentives, financial and non-financial.

Rule of Law, Unity and Reconciliation, Security and Stability

6.23 With the prioritisation of economic transformation, domestic and regional peace and
stability will play a significant role in Rwanda’s development process. Growth in the EDPRS
2 period hinges on expansion of exports and development of the private sector through
an investor friendly and supportive approach. This will require more openness to global
markets and opportunities, strengthened regional integration, a continued peaceful and
stable environment within the country and stability with neighbouring countries. Rwanda will
continue to ensure a stable and peaceful domestic environment while supporting international
and regional initiatives for peace and dialogue for conflict resolution. These will include support
to peacekeeping operations around the world. Rwanda is currently the highest contributor of
peacekeeping forces in Africa.

87
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

6.24 The strengthening of the rule of law goes hand in hand with strengthening universal access to
justice. Ongoing measures will include: strengthening the legal and policy framework including
anti-corruption measures; enhancing community participation and awareness of crime
prevention; developing institutional capacity to respond to, investigate and prevent crime.
Furthermore, reinforcing legal aid mechanisms, improving case management procedures
and information systems, awareness raising and application of human rights standards,
rehabilitating and improving detention facilities and conditions will also be undertaken.

6.25 Unity and reconciliation is a complex process that can take considerable time, over several
generations. To continue the progress in restoring relationships and rebuilding trust among
Rwandans that was shaken by the 1994 genocide against the Tutsi, dialogue at grassroots
level where people share the same culture, language and history will be promoted as well as in
schools and higher learning institutions. National as well as international writers will continue
to be encouraged to record and publish factual accounts of Rwandan history and genocide.
Existing efforts to sustain the process of reconciliation including conducting a reconciliation
barometer, developing reconciliation forums, organising a national summit on reconciliation
and the promotion of the “Rwandan” identity will be supported.

6.26 Part of the reconciliation process is to eradicate the culture of impunity. Rwanda will increase
efforts to bring the remaining suspects of the Tutsi genocide in 1994 before Rwandan courts.
The efforts will include establishing and publicising a database of suspects with outstanding
warrants. The role of the Rwandan Diaspora in this process will be reinforced. To facilitate
research and protect historical accuracy, a documentation center on genocide judgments will
be established.

Strengthening the Effectiveness of Public Finance Management (PFM)

6.27 Rwanda’s public finance management system is the platform for the efficient management
of the nation’s resources. Its reporting, audit and oversight functions are essential elements
in providing effective Accountable Governance.

6.28 A number of significant improvements in PFM have taken place in the last five years. This has
been evidenced by improved scores in the Public Expenditure and Financial Accountability
(PEFA), sector public expenditure review reports, public expenditure tracking survey reports
and independent mid-term and end-term evaluations of the Public Financial Management
Strategy (2008-2012).

6.29 This has resulted in increased usage of GoR procurement and financial management systems
through increased budget support. Notable improvements have been recorded in the entire
PFM cycle through economic planning and budgeting, resource mobilisation, procurement
and budget execution, accounting and financial reporting, audit and legislative oversight.
In addition, the cross cutting issues in PFM which include training and capacity building,
implementation of an integrated financial management system, and fiscal decentralisation
have been strengthened. Through sustained efforts in training and capacity building and
development of financial systems, public entities including districts are able to prepare and
execute annual budgets and submit financial reports within the prescribed statutory deadlines.
In addition, the audit scope and legislative scrutiny of public finances has increased. The
combined effect of these efforts is increased efficiency, transparency and accountability in
the use of public resources.

88
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

6.30 The priorities for the next stage of PFM reforms are drawn from the experiences in
implementation of the first PFM Strategy (2008-2012). In addition to sustaining the
achievements in the last five years, the sector has identified four priority areas in the next
five years: (i) increased resource mobilisation from domestic and alternative sources of
finance, with the objective of meeting increased public expenditure and making Rwanda
progressively self-reliant; (ii) scaling-up of the implementation of the Integrated Financial
Management Information System (IFMIS); (iii) strengthening PFM systems at the sub-national
level including districts and subsidiary units (sectors, schools, health facilities) to support
fiscal decentralisation service delivery; and (iv) enhanced training, professionalization and
capacity building across all PFM disciplines to sustain the reforms in the long run. Monitoring
and evaluation mechanisms to track progress and service delivery to clients will also be
strengthened.

Consolidating Decentralisation

6.31 The decentralisation process began in 2000 with the original decentralisation policy. This
resulted in the creation of districts and the subsequent transfer of implementation and
delivery of a wide range of services to the districts. This will continue to be an integral part of
Rwanda’s development process moving forward. The revised National Decentralisation Policy
of 2011 seeks to establish and empower decentralised administration in the areas of devolution,
delegation and de-concentration. The overall goal is the deepening and sustaining of
grassroots-based democratic governance and the promotion of equitable local development.
This will be done by enhancing citizen participation and strengthening the local government
system, while maintaining effective functional and mutually accountable linkages between
central and local government entities, thereby forming an important element of Accountable
Governance.

6.32 The focus for decentralisation under EDPRS 2 will be on the following strategic areas:
(i) building fiscally stronger local governments through locally owned Local Economic
Development (LED) strategies; (ii) deepening participatory, democratic and accountable
local governance systems; (iii) building capacity for effective local service delivery and
ensuring efficient services delivery through further sectoral decentralisation; (iii) leveraging
regional integration to expand opportunities for youth employment creation, local economic
empowerment, cross-border trade and security (iv) consolidating national unity, cohesion and
peace through resilient, synergetic local systems; (v) using ICT to deliver services efficiently
and effectively, increasing citizens’ empowerment through participation, as well as promoting
transparency and accountability.

6.33 The government will continue to empower local government entities closest to the population
especially at cell and village levels by establishing legal and regulatory frameworks that
allow them to deliver services efficiently. The government aspires that by bringing services
closer to the population, citizens will have a more direct role in their management and have a
greater role in decision making.

6.34 Particular focus in the EPDRS 2 will be on clarifying and streamlining the process of
sectoral decentralisation in areas of weakness. Sectoral decentralisation is being undertaken
differently depending on the sector and specific service or function. Some sectoral agencies,
notably education, health, agriculture and infrastructure, have established direct presence at

89
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

provincial and district levels. But many of the sectoral service functions are parallel and have
not integrated with local government systems. This will also entail allocating resources to
decentralised entities which are matched with responsibilities.

Cross-Cutting Issues

Capacity Building

6.35 The current approach to Capacity Building (CB) is holistic and focuses on capacity creation,
capacity utilisation and capacity retention. These are executed at three levels: the individual,
the organisational and the institutional environment levels. From lessons learned from EDPRS
1, the level of coordination of CB across all sectors needs further improvement in terms of
synergy and harmonisation in approach and practice. Under EPDRS 2, CB will be an integral
component of the development plans of all sectors. The ultimate success of EDPRS 2 will
depend on the capacity of sectors, delivery institutions and districts to deliver under each of
the thematic areas of EDPRS 2.

• Sector Capacity Building Strategy: Each sector strategy shall be accompanied by a

capacity building strategy that will direct the capacity building interventions over the
next five years

• Sub-Sector Working Group on Capacity Building: Each Sector should have a dedicated
sub-Sector Working Group on Capacity Building that brings together all public and
private stakeholders to encourage cooperation across programmes and avoid duplication
of efforts

• Strategic Capacity Building Initiative (SCBI): SCBI is a framework, administered by the

Public Sector Capacity Building Secretariat (PSCBS) which focuses on developing
capacity across all delivery agencies involved in the value chain of identified priority
programmes of each sector in order to achieve tangible outcomes. The approach involves
hiring experts to coach and mentor Rwandan counterparts in critical skill areas within the
sectors. This matching of technical assistance with local counterparts encourages the
principal of skills and knowledge transfer. Currently, SCBI is being piloted across energy,
agriculture, private sector development and mining with a view to expansion into other
areas identified in EDPRS2.

6.36 The sector strategies, District Development Plans and the District Capacity Building Plans all
provide additional information about their specific capacity building initiatives.

6.37 The priority sectors/areas for CB under EDPRS2 are: energy (electricity generation and
distribution); agriculture (crop intensification programme, mechanisation and irrigation);
private sector development (investment promotion and deal conversion); environment and
natural resources (increasing revenue from mining); urbanisation (implementation of master
plans of current and potential urban centers); and transport (aviation, railway and maritime).

90
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

6.38 CB activity will be expected to:

• Strengthen institutional and organisational capacities across all sectors delivering

development actions,
• Develop pro-active and flexible mechanisms that enable critical skills to be available in
emerging or new sectors,
• Provide a pool of young, fully qualified Rwandan experts in critical skill areas able to
deliver on priority national programmes.

Environment and Climate Change

6.39 Rwanda’s economy is heavily dependent on its environment and natural resources, and
the livelihoods of rural (and increasingly urban) communities depend on access, use and
management of such resources. Without sound environmental management, development
activities in key sectors such as agriculture, industry, infrastructure, commerce, and energy
can lead to significant environmental degradation that can undermine economic growth.
Economic impacts are likely to be exacerbated by climate change, which through increased
floods, landslides and droughts, is likely to increase damage to infrastructure and property.
Research has estimated that climate change could result in additional net economic costs (on
top of existing climate variability) for Rwanda that are at least equivalent to a loss of almost
1% of GDP each year by 2030.

6.40 Achieving sustainable economic growth in Rwanda will require the prudent use of natural
resources and ensuring that climate resilience is built into economic planning. Mainstreaming
environmental sustainability provides an opportunity for improved and sustained livelihoods
of present and future generations of Rwandans.

6.41 The GoR has made significant progress towards mainstreaming environmental sustainability,
for example through the Budget Call circular that has included environment and climate
change mainstreaming guidelines for sectors, the increasing use of strategic environmental
assessment and successful pilots of rural ‘climate proofed’ settlement development. However,
there is need for improvement, particularly in terms of the capacity to implement and enforce
environmental policy and to factor in complex, cross- cutting environment and climate change
issues into strategic planning.

6.42 The national Green Growth and Climate Resilience Strategy, approved by Cabinet and
developed with various sectors, promotes cross sector interventions to mainstream
environment and climate change while addressing national priorities. The strategy is supported
by a fund for environment and climate change (FONERWA) to facilitate access to sustainable
financing and support implementation. The EDPRS2 considers these strategic tools as entry
points for guiding specific interventions within national sector strategic plans and their
implementation. Attention is also placed on robust monitoring and evaluation systems, such
as the green accounting framework, which will be essential in ensuring more effective policy
implementation and to demonstrate the economic benefits of environmental protection.

6.43 Priority areas for environment and climate change as cross cutting issues are: (i) mainstreaming
environmental sustainability into productive and social sectors; (ii) reducing vulnerability to
climate change and (iii) preventing and controlling pollution. Key sectors expected to deliver
on these include agriculture, energy, environment and natural resources, infrastructure, health,
private sector and financial sector.

91
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Family and Gender

6.44 Rwanda is committed to placing the family at the center of development, the care and
protection of children and gender equality are prerequisites to achieving equitable and
sustainable development for girls and boys, women and men. Gender equality and family
promotion were firmly entrenched in both PRSP and EDPRS 1 and will continue as cross
cutting themes in EDPRS 2. These approaches have transformed the socio-economic and
political lives of men and women of Rwanda and have earned the country the highest position
in promoting gender equality in the world. EDPRS2 will ensure that the achievements realised
in the past years are sustained and that new approaches and innovations towards family and
gender are promoted.

6.45 As part of its support to the ethos of family, GoR has launched an innovative child care reform
process that aims to close residential care institutions and reintegrate vulnerable children into
family environments and to provide quality support to the most vulnerable families. The reform
envisages the expansion of social services, by recruiting, training and deploying professional
social workers at decentralised level to mentor and support village-based childcare volunteers.
This will be an entry point for strengthening an evidence-informed child protection system
focusing on improving interventions that respond to the most vulnerable children in Rwanda,
including victims of violence, exploitation, discrimination, neglect and abuse.

6.46 The Rwandan economy will be more productive when all women and men are full participants
and when the needs of all groups with special needs are addressed. Women represent 52%
of the population, despite this progress, they do not participate fully in socio-economic and
political spheres of life. EDPRS 2 will focus on strategies that address the needs of all groups
to realise rapid economic growth. EDPRS 2 will mainstream gender and family in planning,
budgeting and in all development programmes/projects at national and local levels. Sector
strategies and district plans will focus on interventions that reduce poverty levels among men
and women and reduce gender-based violence, malnutrition and other related conflicts at
both family and community level.

6.47 Improving the economic status of men and women requires a holistic and multi- sectoral
approach. EDPRS 2 will focus on sector strategies that enable women and men to participate,
access, control and benefit equally from growth processes in a way that recognises their
different needs. This will enhance access to economic resources and opportunities in terms of
jobs (especially off-farm), financial services and property ownership, skills development and
market information. Key sectors to deliver on economic empowerment are the productive
sectors of agriculture, infrastructure, private sector, ICT, environment and natural resources.

6.48 Rwanda has registered good progress in promoting political participation of women. The
government is committed to consolidating these and achieving much more. Nonetheless,
EDPRS2 still requires embarking on strategies to increase effective participation of women
in leadership and decision making especially in the private sector. Gender-Based Violence
(GBV) prevention and response will be pursued to ensure that GBV is drastically reduced and
that victims access appropriate services which free all Rwandans from all forms of violence
and discrimination.

6.49 Wherever possible, EDPRS 2 thematic outcome indicators will be disaggregated by gender.

92
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Regional Integration

6.50 Rwanda has identified regional and international economic integration as a key element
to its long term development path as the sixth pillar of Vision 2020. EDPRS 1 found that
sectors needed a framework to capture the benefits, develop opportunities and mitigate
risk from regional integration. The Rwandan economy will be in a position to benefit and be
competitive within the East African Community (EAC) and the wider region, with regional
integration mainstreamed into central and local government plans.

6.51 Rwanda is a member of three key regional integration arrangements: the EAC, the Common
Market for Eastern and Southern Africa (COMESA), and the Economic Community of the
Great Lakes Countries (CEPGL). It is also dealing with a tripartite agreement between EAC,
COMESA and the Southern African Development Community (SADC), is a member of the
African Union and has international trade agreements such as those with the EU and USA.
Each integration arrangement has varying commitments with the most advanced being the
EAC. As part of the EAC, Rwanda is implementing a Customs Union and a Common Market. A
Monetary Union with plans for a Political Federation is also being negotiated. This far reaching
agenda has implicational issues for all sectors, with the free movement of goods, services,
capital and labour being prominent.

6.52 The aim of increased integration is to improve Rwanda’s opportunities to achieve faster
growth and poverty reduction. Specifically, deepening regional integration will help overcome
Rwanda’s key development constraints of being a landlocked country with a small market
size, energy constraints and limited human capital. The EAC offers the chance to become
linked with neighbouring countries and international ports; to increase its potential market
from 10 to 130 million people with a combined GDP of around USD80 billion; to implement
EAC energy generation and interconnectivity projects; and to benefit from education facilities
and skilled labour from EAC Partner States.

6.53 Due to the wide reach of the EAC, there will be relevant regional integration issues for each
sector within EDPRS 2. These range through trade, finance, legislation, health regulation,
agricultural standards, environmental safeguards and education qualifications. The majority
of the priority EAC issues will fall under Economic Transformation and five sectors: Private
Sector Development (PSD), Finance, Justice, Energy and Transport. PSD will take advantage
of the EAC supporting the sector goal to develop a competitive business environment whilst
overcoming constraints to trade such as Non-Tariff Barriers (NTBs). Policy actions will focus
on the EAC tariff structure revisions, and improving market access through tripartite free
trade agreement together with COMESA and the Southern African Development Community
(SADC). Finance policy will focus on ensuring that there is stronger regulatory framework
that supports enhanced competition in regional and international financial centers and a
stronger regulatory framework that supports savings. Justice policy will focus on ensuring
that Rwandan laws are harmonised with EAC instruments and approximated with EAC Partner
State’s laws. Transport policy will deal with regional projects concerning roads, rail, water and
air transport.

HIV/AIDS and NCDs

6.54 Rwanda has made extensive gains in the prevention of HIV using five integrated components
(VCT, PMTCT, male circumcision, BCC, HIV Treatment) for scaling-up prevention and treatment.

93
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

The health sector continues to contribute to the national efforts to halt the spread of HIV
and AIDS by 2015 through education of individuals and families about HIV/AIDS, providing
motivation for counselling, distribution of condoms, and making sure that all patients with
HIV/AIDS or Tuberculosis receive and adhere to treatment and support. Key intervention
include regular sensitisation regarding HIV, voluntary counselling and testing, prevention of
mother to child transmission, condom distribution etc.

6.55 The conditions in which people live and their lifestyles influence their health and quality
of life. With non communicable Diseases (NCDs), current evidence indicates that five types
of NCD, cardiovascular diseases, cancers, chronic respiratory diseases, diabetes and injuries,
make the largest contribution to mortality in the majority of low and middle-income countries
and require concerted, coordinated action. These diseases are largely preventable by means
of interventions that tackle shared risk factors, namely: tobacco use, alcohol abuse, unhealthy
diet, physical inactivity, road safety use, and environmental carcinogens. These risk factors
have economic, social, gender, political, behavioural, and environmental determinants.
Improved understanding and public education of the risk factors and their determinants will
provide opportunities for the prevention and control of NCDs.

6.56 For the NCDs, the priority areas are prevention and control of NCDs in general and in the
workplace through increased sensitisation and awareness of the dangers and risks, and by
promoting healthy nutrition and living.

Disaster Management

6.57 Rwanda is no exception to the increased global impact of natural and other disasters. Disaster
Management requires a systematic strategy to address the effectiveness of preparedness,
response and recovery. Disaster Risk Reduction (DRR) and Disaster

Management is a complex development issue which requires political and legal commitment, public
understanding, scientific knowledge, careful development planning, responsible enforcement of
policies and legislation, people-centerd early warning systems, and effective disaster preparedness
and response mechanisms. Multi-stakeholder and effective DRR will help in providing and mobilising
knowledge, skills and resources required for mainstreaming DRR into development programmes.

6.58 GoR has committed to internationally agreed conventions for acceleration of development
such as the MDGs and the Hyogo Framework for Action 2005-2015. The success of EDPRS2
as a conduit for development programmes cannot be assured when there are unpredictable
disasters, unless such events are well mitigated. The vision “to build a disaster resilient
nation” will therefore require consolidated efforts and a good understanding of each actor’s
responsibilities.

6.59 DRR and Disaster Management will touch all priority areas and is mainstreamed in all
priority sectors. The most important are: agriculture, infrastructure, education, environment
and natural resources, private sector development, energy, urbanisation, information
communication technology, health, youth and social protection. Measures include investment
in rapid response disaster management equipment, early warning systems, and awareness
campaigns directed to residents of vulnerable areas.

94
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Disability and Social Inclusion

6.60 Rwanda does not intend to leave any of its citizens behind in its development. As such, specific
steps will be taken to ensure that people with disabilities (PWDs) and other disadvantaged
groups are able to contribute actively to the country’s development and to benefit from it.

6.61 Key interventions will include accessible infrastructure whereby both the private and
public sector will be required to ensure easy access to all new buildings. In terms of access
to information, media practitioners will develop standards for reporting news accessible to
PWDs, including training in sign language.

6.62 The legal and regulatory framework will also be reviewed to ensure that it does not
discriminate against PWDs where the Constitution already has provisions for their protection.
Education personnel and teachers with skills in inclusive and special needs education will be
increased in number. Assistive devices and appropriate learning resources will also be scaled-
up.

95
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

7. IMPLEMENTATION AND MONITORING

AND EVALUATION

Implementation
7.1 EDPRS 2 will be implemented in a challenging period when the global economy is
characterised by uncertainty, with many developed countries likely to continue facing
recessions. For Rwanda, commodity prices, which constitute the larger share of its exports,
are projected to remain low. Furthermore, volumes of ODA are also projected to reduce over
the short to medium-term.

7.2 Achieving these ambitions with limited financial means calls more than ever for increased
coordination in delivery. This includes the creation of a national Monitoring and Evaluation
Framework and the harmonisation of actions by institutions put in place to give strategic
direction to the process, both for implementation and for monitoring and evaluation. Based
on the lessons of the past, EDPRS 2 implementation will need to be well coordinated, focused
and aggressive through the various levels of operationalisation. This will translate into
adequate sequencing (from short-term to medium-term interventions) and inter- relatedness
of actions under the thematic and sector strategies and district plans, the clear assignment
of responsibilities and roles in their implementation, and coordination with non- state actors,
especially insisting on the centrality of private sector participation and national ownership.

7.3 As the implementation of EDPRS 2 progresses, structures will need to remain flexible enough
to adapt to the changing environment and evolve to remain relevant while improving their
performance. Institutional arrangements for strategic oversight, implementation, coordination
and monitoring and evaluation of the EDPRS2 have therefore been reviewed and, institutions
that emerged during the EDPRS 1 implementation period have been rationalised so as to
reduce the burden, particularly of reporting.

7.4 The recommendation is for a core set of institutions with specific roles and responsibilities
with respect to strategic guidance, coordination, implementation and monitoring and
evaluation. Other institutions will receive information on progress against EDPRS2 targets
and results of other evaluative exercises to assist them in their own coordination activities.
The proposed institutional arrangements and responsibilities for implementation, monitoring
and evaluation are set out in Table 7.1 below

Sequencing of Actions

7.5 The priorities for EDPRS 2 are set out in the Thematic Strategies. As part of the general
coordination of its implementation, some general principles will be adopted so as to ensure
proper sequencing of actions and optimal use of resources. For example, speedy impact on
expanding exports and reducing imports, reducing dependency on foreign aid, and ensuring
sustainability of the EDPRS 2, are outcomes which will improve the current external balance
account of the country.

96
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

7.6 Over the first year therefore, interventions in areas that can yield fast results in terms of
bringing in or saving foreign exchange flows will be priorities. In this regard, some sectors (e.g.
agriculture, in which increased production also increases agro-business including agricultural
exports, and the construction industry with its demand for cement and other construction
material and the mining industry) are more amenable to quick wins. These sectors will be
allocated priority status for resourcing.

7.7 The role of the private sector is at the heart of the EDPRS 2. Actions to be given precedence
for early implementation are those directed at engaging the private sector and ensuring the
facilitation of its contribution in the various development sectors. These include actions aimed
at encouraging private activity and investment in areas traditionally considered as social (e.g.
as providers of health and education services).

7.8 MDGs-related interventions, with fast impact on poverty reduction, are another set of
priorities for the country, which has set itself specific targets related to achievements under
the MDGs framework. Over the last decade, Rwanda has made a lot of progress against the
MDG targets but still needs to ensure that the pace of progress is sustained, that targets set
for 2015 will be attained and will continue to be emphasised, especially when accelerated
delivery is needed. One example is the necessity to further reduce the share of people living in
poverty to 30% by 2015, and below by the end of EDPRS 2 period. Actions to further increase
agricultural productivity are considered a good candidate for the early years of the EDPRS 2.

7.9 In the current context of reducing foreign aid, reforms in Public Financial Management will
continue to aim at improving efficiency in the raising and use of public funds. Interventions
that increase revenues for the State will therefore be given priority during the first years of
the EDPRS 2 period. These kinds of interventions will help ensure sufficient funding of the
spending needs under the EDPRS 2.

7.10 EDPRS 2 is also designed to harmonise development and development actions from the
national to sub-national levels. Districts will therefore play an integral role in the implementation
strategy. District monitoring and evaluation activities will be closely tied to those of the
sectors. Districts will coordinate their development activities with those of sectors and will
receive close guidance on the expected results and output to be achieved annually. In this
way, sectors will be assured that their planned achievement targets will be met.

Roles and Responsibilities

7.11 The structure for the implementation of the EDPRS 2 is dictated by the need for increased
coordination, while not changing too drastically the institutional environment to avoid
losing experience acquired during the implementation of the EDPRS 1. While planning and
coordination is the responsibility of the Thematic Working Groups (TWG), implementation
will continue to be done at sector and district level.

7.12 The traditional roles of ministries, districts and agencies in implementation as budget
agencies remain unchanged. The Prime Minister’s Office is responsible for coordination of
government programmes and as such will work closely with MINECOFIN to ensure effective
implementation and monitoring of the EDPRS 2. The annual leadership retreat will be aligned
to the needs of the EDPRS 2 while focusing on specific areas with arising annual priorities.
Working with MINECOFIN, the Ministry of Local Government (MINALOC) will continue to be

97
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

responsible for ensuring that national level policies and local priorities are well aligned. For
this purpose, central government–local government meetings will be held on a regular basis.

7.13 Increased coordination between the public sector and private sector actors will be needed
for the successful implementation of the EDPRS 2. An effective Public Private Dialogue
platform will be ensured to address concerns raised by the private sector. Public services are to
become more responsive to private sector needs and this calls for increased engagement with
private actors in all sectors. In the past, Sector Working Groups (SWGs) were responsible to
ensure engagement of the private sector. However, this did not happen adequately. Under the
EDPRS 2, specific sessions of Public-Private actors in the same sector will be organised under
the leadership of the Rwanda Development Board and the Private Sector Federation. At the
district level, these regular consultations will be conducted with districts investment groups
(IGs). For specific programmes, private actors will be involved in the regular management of
implementation, e.g. TVET programmes.

7.14 Alignment and coordination of all interventions to the priorities of the EDPRS1 made it a
success. It is important that we build on this for EDPRS2 implementation good practice. The
donor division of labour, revised according to EDPRS 2 sectors, will ensure good coordination
and avoid duplication between donors. This will be done under the framework of joint
programming encouraged by the Busan principles, allowing donors to plan their interventions
together with government. Once the division of labour has been decided at national level,
joint programming will be taken further at the SWG level.

7.15 The Joint Action District Forums (JADF) will be responsible for coordination of EDPRS 2
implementation at district level. However, the division of labour among development partners,
particularly NGOs and CSOs in the districts, will need to be strengthened and aligned to the
District Development Plans (DDPs) priorities.

Communication for Ownership and Participation in Implementation

7.16 An important aspect of implementation and sustainability of the EDPRS 2 is the participation
and contribution of the population in the delivery of the development results expected under
this strategy. This will be made possible by the emphasis that EDPRS 2 puts on communication
for development under its Accountable Governance theme. A critical challenge that needs to
be tackled in the quest to mainstream development communication into the national planning
system is: knowledge of the country’s planning architecture, opportunities and calendar for
citizens’ engagement.

7.17 Information dissemination on the medium-term development agenda at all levels and related
documents such as Annual Progress Reports on the EDPRS, on the DDPs and District Imihigo,
as well as annual reports on Imihigo achievements at sub-district level, will be used as the
basis for development dialogue. This will target specific groups such as CSOs, communities
and the general public. As part of the Accountable Governance thematic area, the existence of
channels for feedback from the general public about public programmes and service delivery
will be ensured. These channels will also be used as a basis to manage expectations for public
expenditure while promoting behavioural change towards community contributions to the
delivery of development outcomes and plans.

98
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Monitoring and Evaluation

7.18 Key to the implementation arrangements for EDPRS 2 is the Monitoring and Evaluation
Framework supported by National Monitoring and Evaluation (M&E) Policy. The EDPRS 2
Monitoring and Evaluation Framework differs in several ways from that used for EDPRS 1. First
of all, the EDPRS 1 Framework was largely focused on the monitoring function and particularly
on the Common Performance Assessment Framework (CPAF).

7.19 The focus on EDPRS 1 Monitoring Matrix reduced the monitoring of other national priorities
elaborated in the sector matrices. Further, the EDPRS 1 Monitoring Matrix and CPAF both
consisted of a large number of indicators that placed a burden on the monitoring process,
especially with no electronic monitoring system in place.

7.20 The EDPRS1 self-assessment identified that districts and sectors have expressed the need
for a fully integrated M&E system that links the different sub-systems.

The self-assessment also stressed the need for strengthened sector monitoring frameworks so as to
improve sector management. It further found that monitoring mechanisms should be strengthened
at the district level. The self-assessment also revealed that there was the need for sharing progress
reports on indicators especially from the districts.

7.21 The Monitoring Plan is designed to facilitate tracking of progress at the national level and
also at the three levels of the EDPRS 2 conceptual framework, i.e. thematic, sector and
district levels, so as to ensure the evaluability of the EDPRS 2 both during and at the end of
its implementation. The Monitoring Plan also integrates the tracking process for outcomes
established at the three levels and also those associated with the Foundational Issues that
will be addressed by sectors. The Monitoring Plan also seeks to reduce the national reporting
burden by limiting the number of indicators that will be measured at this level.

7.22 The Evaluation Plan outlines the strategy for evaluating the relevance and effectiveness
of the EDPRS 2 and the efficiency with which its results have been achieved. This plan is
designed to enhance the on-going policy making, planning and budgeting processes at the
thematic, sector and district levels.

Principles

7.23 The underlying principles of the M&E Framework are:

a) Harmonisation
b) Accountability
c) Participation and Inclusiveness
d) Comprehensiveness
e) Manageability
f) Evaluability
g) Capacity Development

7.24 Harmonisation: The M&E Framework for EDPRS 2 will be harmonised with the strategy’s
planning framework. The planning framework consists of three levels, i.e. the higher level
thematic areas, the sectors and districts. As such, outcomes of the EDPRS 2 will be interlinked

99
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

from the three planning levels and, by extension, the monitoring plan will ensure similar
harmonisation.

7.25 Accountability: The M&E Framework will include components of regular reporting to citizens
of Rwanda at special forums held at the sub-district level. Feedback from these forums will be
used as part of the evidence-based planning process.

7.26 Participation and Inclusiveness: The M&E Framework is designed to facilitate reporting and
data collection from all planning and administrative levels of Rwanda on EDPRS 2 priorities.
These reporting arrangements will be outlined in the National Planning, M&E Policy and
Implementation Plan.

7.27 Comprehensiveness: The M&E Framework will include arrangements for monitoring and
evaluation of development policies, programmes and projects covered by EDPRS 2.

7.28 Manageability: Developing a set of indicators with appropriate means and capacity for M&E
is emphasised throughout the EDPRS2. The EDPRS 2 thematic, sector and district indicators
have been selected so as to take advantage of existing data collection systems as much
as possible, while minimising the need for developing entirely new systems. Prioritisation of
indicators ensures that the M&E system is not over burdening.

7.29 Evaluability: Under the Monitoring Plan of the M&E Framework, enough information will be
produced to allow for the EDPRS 2 to be evaluated at all levels, i.e. national, thematic, sector
and district levels.

7.30 Capacity Development: Capacities for monitoring, data collection, analysis, reporting,
dissemination and the conduct of evaluations will be developed at the national/sector and
sub-national/district levels for implementation of the M&E Plans.

Monitoring Plan

7.31 Monitoring will take place at the thematic, sector and district levels and also at the national
level. At the highest level, monitoring will be of the EDPRS2 Monitoring Matrix. Themes,
Sectors and districts have their respective frameworks.

7.32 The National Institute of Statistics (NISR) will be integral to the monitoring process. NISR will
provide data for the construction of indicators through its census and survey programme.
NISR will execute a planned schedule of surveys and censuses to meet data and information
needs for EDPRS 2. In addition, NISR will provide capacity support to sectors and district in
order to strengthen administrative data systems. NISR will also compile the meta-data for
monitoring indicators for the EDPRS 2.

National Level Monitoring

7.33 The national monitoring framework, in the form of the EDPRS 2 Monitoring Matrix, consists of
a priority set of thematic and foundational indicators that are core to the EDPRS 2 expected
outcomes. It will inform the preparation of a Common Performance Assessment Framework
(CPAF) that will be used for mutual accountability between GoR and its development partners
in line with Busan and Paris Declaration.

100
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Integrated Thematic, Sector and District Monitoring

7.34 At the thematic, sector and district levels, the monitoring framework reflects the inter-
linkages between the three levels, as consistent with the EDPRS 2 conceptual framework.
Thematic monitoring is at the outcome level and is done for all four themes, i.e. Economic
Transformation, Rural Development, Productivity and Youth Employment and Accountable
Governance. Thematic outcome indicators have been developed and annual targets against
which achievements will be monitored have been set.

7.35 Thematic and sector outcomes are strongly linked to ensure that priority targets are
achieved. Sector monitoring will form the basis of monitoring outcomes at the thematic level.
In addition, because sector outputs will largely be achieved through district implementation,
linkage between district and sector outcomes will be ensured. Foundational Issue outcomes
will also be monitored at sector and district level.

Monitoring Tools

7.36 A set of indicators will be presented in the National, Thematic, Sector and District Monitoring
Frameworks as follows:

• EDPRS 2 Monitoring Matrix

• Thematic Area Monitoring Matrix
• Sector Monitoring Matrix (with linkages to Thematic Outcomes and covering key
Foundational Issues)
• District Monitoring Matrix (with linkages to Sector and Thematic Outcomes)

7.37 EDPRS 2 Monitoring Matrix: The EDPRS Matrix is the national level framework for a core
set of key monitoring indicators. These indicators are drawn from the Sector Frameworks in
consultation with sector working groups. These will be updated and reviewed on annual basis.

7.38 Thematic Area Monitoring Matrix: Outcome indicators will be developed and monitored for
the four Thematic Strategic Plans on an annual basis. These indicators will correspond to
priority interventions.

7.39 Sector Monitoring Matrix: The sector indicator framework consists of outcome indicators of
both thematic and foundational nature with corresponding priority interventions and outputs.
Institutions will be assigned specific outcomes to monitor and outputs to deliver in their
respective institutional strategic plans and annual work plans. This encompasses monitoring
progress of the MDG targets.

7.40 District Monitoring Matrix: Outcome indicators have been identified in the DDPs, relating to
thematic and sector outcomes. This matrix will be monitored on an annual basis showing key
interventions and outputs to be delivered.

7.41 In addition to the above-mentioned frameworks, Aid Effectiveness will also be monitored
through the Development Partner Assessment Framework (DPAF).

101
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Evaluation Plan

Sector Evaluations

7.42 Complementing the EDPRS 2 Monitoring Plan is the Evaluation Plan. The Evaluation Plan will
be implemented at two levels, i.e. at the sector and national levels. Sectors will prepare annual
evaluation plans for their policies, programmes and projects. Large investment projects will
be particularly targeted for evaluation of their cost- effectiveness and social and economic
benefits.

7.43 Sector evaluation plans will also include evaluations of policies, programmes and projects
implemented at the district level, since sector outcomes are for the most part implemented
at the district level. Execution of all sector evaluations will be managed by SWGs.

7.44 Prioritisation of initial evaluation work will be on informing priorities of the EDPRS 2.
Formative evaluations will be an essential part of sector evaluation plans so as to assess the
design of important projects, programmes and policies before roll-out.

National Level Evaluation of EDPRS 2

7.45 As part of the strategy for the institutionalisation of M&E into the planning processes of
MINECOFIN to improve evidence-based planning at the national level, EDPRS 2 will be
subjected to a mid-term assessment in the year 2015 and a terminal evaluation in 2017.

7.46 The mid-term assessment will evaluate progress towards the achievement of the thematic
outcomes. This assessment will reflect the adequacy (relevance and effectiveness) of the
overall and sector strategies developed to achieve those outcomes. The mid-term assessment
will also determine the cost of achieving the thematic outcomes.

7.47 The terminal evaluation will examine the relevance and effectiveness of the EDPRS 2, including
its thematic and sector strategies and also, the district strategies utilised to achieve sector
targets. The cost-effectiveness of delivery of the results of the EDPRS 2 will also be evaluated
at this time.

Institutional Arrangements

7.48 Institutional arrangements for monitoring and continuous feedback, via reports and
evaluations, into the planning and evaluation of the EDPRS 2 will involve a core set of
institutions responsible for coordination, strategic oversight and conceptual direction with
respect to policy and programme adjustment based on emerging evidence from the M&E
system.

7.49 Oversight functions will lie with Parliament, Cabinet, EDPRS 2 National Steering Committee
(NSC), PS’ Forum and Development Partners’ Coordination Group (DPCG) and the Leadership
Retreat.

7.50 MINECOFIN will facilitate implementation and monitoring of the EDPRS 2. MINECOFIN will

102
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

collaborate with MINALOC to ensure provincial and district actions are taken in a timely
manner and aligned to agreed priorities.

7.51 Thematic Working Groups will coordinate technical functions that cover more than one SWG.
They will also ensure that sector plans are fully aligned to achieve thematic priorities on an
annual basis. TWGs, SWGs and the Joint Action District Forums (JADFs) will be the main
organs under the monitoring framework and the NISR will also play a key role in providing
data for monitoring.

7.52 Other government institutions will also be associated with the monitoring and evaluation
system as they will be provided with information and data so as to carry-out their own functions.
The Prime Minister’s Office will be the main recipient of regular and relevant quarterly data
and information. Other ministries, departments and agencies will also be responsible for both
supplying and receiving data and information.

7.53 The evaluation function will provide regular feedback on policies and programmes as they are
implemented. Evaluations will be commissioned and undertaken at several levels. TWGs shall
commission and manage evaluations that relate to their respective themes. SWGs will also
commission and manage evaluations, including ex-ante evaluations to assess the evaluability
of planned programmes and projects for respective sectors.

7.54 Table 7.1 outlines the roles and responsibilities of each of these institutions in the strategic
orientation, coordination and monitoring and evaluation and implementation of the EDPRS
2. All coordination arrangements for the implementation of the M&E framework for EDPRS 2
will be outlined in a National M&E Policy. The policy will also set out the terms of reference for
the functioning of all institutions involved in the M&E functions. In addition, the National M&E
Policy sets out the reports that will be produced, timelines and responsibility for reporting.

Institutional Arrangements – Evaluation

7.55 The mid-term assessment and terminal evaluation will be carried out by MINECOFIN. The
mid-term assessment will however be conducted as an internal exercise, managed by TWGs
in collaboration with MINECOFIN. Independent evaluators will be contracted for the terminal
evaluation.

7.56 In addition to the mid-term assessment and terminal evaluation, sectors will annually identify
projects and programmes for assessment or evaluation. Sectors will identify the budget for
use in the conduct of any assessments or evaluations they plan to conduct. They will utilise
monitoring reports of SWGs and recommendations from JADFs to determine their annual
evaluation programme.

7.57 Since sectors will be responsible for undertaking evaluations on behalf of thematic areas
and districts, they will be responsible for setting priorities for their evaluations, ensuring that
unanswered questions of TWGs on result areas set out in thematic outcomes will be speedily
addressed.

Capacity Development

7.58 The EDPRS 1 self-assessment and the SWG process also revealed capacity gaps in the GoR

103
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

for M&E. M&E Frameworks for EDPRS 2 are based on Results-Based Management (RBM)
principles and practices whose capacities are currently not fully integrated. In order to ensure
adequate monitoring, evaluation and reporting, MINECOFIN will develop capacities at all
levels in:

• Planning, Monitoring and Reporting

• Report Writing
• Evaluations
• Communications and Dissemination of Policy Information
• ICT
• Management of M&E Function

7.59 Training in planning, monitoring and reporting, including in report writing will take place for all
planners and for officers responsible for monitoring at the district level. Special training and
advocacy, through seminars and workshops, will be done for the media including operators
of local language radio stations and other producers of information, particularly at the district
and lower geographic levels.

7.60 Since significant emphasis is being placed on automation of the implementation, monitoring
and reporting under EDPRS 2, an electronic platform will be put in place. This platform will
be designed to ensure that information for feedback into the planning process will be readily
available from districts and sectors as SWGs and JADFs perform their semi- annual monitoring
exercises.

7.61 Secondly, the system will provide a database of official government statistics for the
preparation of annual progress reports. These progress reports will be presented to the
highest consultative and decision-making bodies, such as Cabinet, the PS’ Forum and DPCG.

7.62 Finally, competencies in performing the evaluative function for EDPRS 2 will be built, at the
national and sub-national levels. An essential component of training for M&E will be in the
management of national integrated M&E systems and management of evaluations.

7.63 The National M&E Policy is the harmonising framework for implementation and monitoring and
evaluation of EDPRS 2. The aim of the policy is to establish a common basis for implementation
of the National Integrated Planning, Monitoring and Evaluation System, initially for EDPRS 2
and later for all other development frameworks. The policy is also prepared in the spirit of
reinforcing accountability within government and to the population.

7.64 Plans for implementation and monitoring for EDPRS 2 involve a significantly simplified approach
that identifies a single responsible institution or organ to perform specific functions of (1)
strategic orientation and oversight, (2) coordination and monitoring and (3) implementation.
Terms of reference for these organs and institutions will be set out in the National M&E Policy.

104
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Table 7.1 Institutional Arrangements for EDPRS 2 Coordination, Monitoring and Reporting

INSTITUTIONS STRATEGIC OVERSIGHT AND IMPLEMENTATION, MONITORING

& ORGANS COORDINATION AND EVALUATION

1. Parliament Provide oversight for the

implementation process and
endorse annual monitoring
progress reports. Parliament
will also vote budgets in line
with EDPRS 2 programmes and
projects

2. Cabinet Approve the final EDPRS 2

and implementation plans.
Receive regular monitoring
reports on progress in EDPRS
2 implementation and give
feedback for policy and
programme adjustment. Approve
annual progress reports for
presentation to Cabinet

3. National Provide oversight for thematic

Steering and intersectoral and central and
Committee local government coordination
and address any challenges
that may arise. The NSC
will also receive monitoring
reports, including the annual
progress report and also make
recommendations on thematic
priorities.

4. PS’ Forum Approve work plans upon

recommendation of MINECOFIN/
NDPR. Work plans will be
designed to show sector linkages
to thematic outcomes.
Approve JSR reports and annual
progress reports on work plans.
Present annual progress reports
to NSC and Cabinet for onward
presentation at the Leadership
Retreat and Parliament.

5. Leadership Identify selected priority

Retreat outcomes from EDPRS 2 that are
to be implemented in the coming
year and approve related priority
actions.

105
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

INSTITUTIONS STRATEGIC OVERSIGHT AND IMPLEMENTATION, MONITORING

& ORGANS COORDINATION AND EVALUATION

6. Thematic • Ensure coordination between • Monitor sector progress on

Working Groups thematic and intersectoral EDPRS 2 thematic outcomes
levels. and prepare summary reports
on progress against thematic
• Ensure that the sum of sector priorities and outcomes for
level interventions meet the presentation to PS’ Forum, NSC
thematic and overall EDPRS 2 and Leadership Retreat.
objectives.
• Provide quality assurance for
• Address challenges in relation sector and district reports.
to linkages.
• Commission evaluations of
effectiveness of thematic
priorities and also make
recommendations for sector
evaluations.
7. DPCG & JBSR • Provide technical advice on
implementation arrangements
for EDPRS 2.
• Facilitate the achievement of
thematic and sector priorities,
particularly through participation
in monitoring activities.
• Give feedback on the EDPRS
2 Annual and Semi-annual
Progress Reports before
submission to PS’ Forum.
• Produce JBSR reports.

8. Sector Give guidance on priorities for • Support the development of

Working Groups implementation of the sector sector Monitoring and Evaluation
& JSRs strategies, actively incorporating frameworks in line with sector
district priorities. strategies.
• Conduct Joint Sector Reviews on
EDPRS 2 Monitoring Matrix and
prepare reports.
• Prepare evaluation plans showing
priorities for evaluations and
associated budgets. Commission
and manage sector evaluations

106
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

INSTITUTIONS STRATEGIC OVERSIGHT AND IMPLEMENTATION, MONITORING

& ORGANS COORDINATION AND EVALUATION

9. Joint Action • Monitor progress on DDP

Development implementation.
Forum (JADF)
• Monitor implementation of
priority actions of districts
towards the achievement of
sector and higher results.
• Align and coordinate
development partner
interventions at district levels.

10. MINECOFIN • Facilitate implementation • Consolidate thematic and sector

and monitoring of EDPRS 2 reports into Annual and Semi-
& gives monitoring reports to annual Progress Reports.
PMO regularly.
• Prepare a database of sector-
• Coordinate working of TWGs, focused research and make
SWGs and JADFs. findings widely available to all
other government institutions.
• Ensure prepared annual action
plans and budget are aligned • Disseminate key information
to EDPRS 2. from monitoring re ports, using
all types of media, including
website and social media.

11. Ministry • Coordinate provincial and • Monitor progress of DDPs

of Local district actions with respect through participation on JADFs.
Government to implementation of DDPs
and EDPRS 2 ensuring • Evaluate Imihigo.
inter-sectoral coordination
at the lower geographic
levels through Integrated
Development Plan (IDP).
• Provide oversight for the
preparation and quality
assurance of the Imihigo and
district annual action plans.

12. Prime Coordination of Implementation • Monitor and evaluate

Minister’s Office across central government performance contracts at
(PMO) institutions. the sector level, reinforcing
MINECOFIN/NDPR efforts at
achieving EDPRS 2 target.
• Commission and manage EDPRS
2 mid and end-term evaluations.

13. Public- Propose strategic issues to be Under the leadership of RDB and
Private considered annually for growth of PSF, engage with sectors on areas/
Dialogue (PPD) private sector. issues of specific/sector interest.

107
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

8. MACROECONOMIC FRAMEWORK AND COSTINGS

Macroeconomic Framework
8.1. The EDPRS2 macro scenario presented is based on assumptions leading towards Rwanda
achieving middle income status by 2020 while lifting a large share of the population out of
poverty. This is achieved through accelerating GDP growth during the EDPRS 2 period, driven
by a scaling up of both public and private investment in the priority sectors, in line with the
Strategy for Economic Transformation discussed in more detail in Chapter 2.

The Real Sector

8.2. As economic transformation happens, GDP growth is projected to accelerate from 7.5% in
2013 to 12.2% in 2017 and averages 10.2 % over 2013-17. Per capita GDP is forecast to reach
USD 1,000 by the end of the EDPRS 2 period (Table 8.1).

Table 8.1 Output and Growth Rates under Optimistic Scenario

Gross Domestic Product (GDP)
GDP Rwf billions, constant 2012 prices 4,363 4,691 5,132 5,677 6,324 7,094 10,388
USD millions, constant 2012 prices

7,062 7,593 8,306 9,190 10,237 11,484 16,815

GDP per Rwf ‘000s, constant 2012 prices 416 434 462 497 540 591 807
capita USD, constant 2012 prices

644 703 747 805 874 956 1,306

Annual Growth Rates

2012 2013 2014 2015 2016 2017 Average Annual
growth 2013 to
rate 2013 2020
to 2017
Real Gross Domestic Product 8.0% 7.5% 9.4% 10.6% 11.4% 12.2% 10.2% 11.5%
(GDP)
Real GDP per capita 4.9% 4.5% 6.4% 7.7% 8.5% 9.4% 7.3% 8.7%

Source: MINECOFIN staff estimates and projections.

108
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.3. Crowding-in of private investment will bring increased growth in all three sectors of the
economy. However, the rapid growth rates required for economic transformation to happen,
will stem mainly from the emphasis put on value addition and diversifying the economy
towards services production and growth of industry which currently represents the smallest
share of GDP, will experience the highest growth, averaging 12.4% per year. The services
sector will continue to be the main driver of overall growth of economic activity, averaging
11.7% over the EDPRS2 period and growth in agriculture is projected to remain higher than 6%
on average through the EDPRS2 period (Figure 8.1).

Figure 8.1 Sector Growth Rates and Shares of GDP

16 100

14
80
12
51.8 52.4 53.0 53.8 54.7
10 60

8
40
6 16.1 16.4 16.7 17.1 17.6

4
20
2 32.1 31.2 30.2 29.0 27.7

0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Services Industry Agriculture Services Industry Agriculture

GDP

Source: MINECOFIN staff estimates and projections.

8.4. This accelerated growth under the EDPRS 2 will require a significant increase of gross
investment. An initial scaling up of public capital expenditure will be necessary to finance strategic
investments aimed at boosting the productivity of the economy and crowding in private investment
in priority sectors. Public investment will rise to 15.0% of GDP in 2015 and decrease afterwards as a
share of GDP (Figure 8.2). Private investment is projected to overtake public investment in 2016 to
more than 15% of GDP by 2017 as public interventions targeted at further reducing the risk and cost
of doing business bear fruit.

109
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Figure 8.2 Public and Private Investments as a Percentage of GDP

35
29.7 29.7
30 28.4
25.4
25
21.3 13.4 15.4
20
10.2
8.1 14.9
15

10

5 13.2 15.2 15 14.8 14.3

0
2013 2014 2015 2016 2017

Investments Private Public

 Source: MINECOFIN staff estimates and projections. 102

The External Sector

8.5. In line with the emphasis on value addition and services, exports growth averages 28% per
year between 2013 and 2017. Exports will be stimulated by interventions that increase the
external connectivity of Rwanda’s economy and boost exports, such as the building of a
new airport, completion of the Kigali Convention Center, and the transformation of Rwanda’s
logistics system focusing on exports to Burundi, the EAC and central Africa. In particular, high
growth of services exports is expected, averaging around 34% per year.

8.6. With increased investments, the demand for imports of capital and intermediate goods will
also grow. Imports are expected to grow at an average of 17.6% per year to support industry.
Despite high import growth, the current account deficit is expected to improve over the
period, from 10.6% in 2013 to 9.4% in 2017, as the trade deficit is reduced by the rapid growth
of exports (Figure 8.3).

Figure 8.3 Exports, Imports and the Current Account (percentage of GDP)
50

40

30
Exports
20
Imports
10

0 Trade balance

-10
Current Account balance
-20

-30
2013 2014 2015 2016 2017

110
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.7. Financing of public and private investment needed for EDPRS 2 is reflected in an increase in
both external debt and foreign investment. The total external debt stock is projected to reach
31.2% of GDP in EDPRS 2 but to decline afterwards with public external debt stock projected
at 24.2% of GDP and the private debt stock at7.0% of GDP in 2017.

8.8. Foreign investment in the form of FDI and portfolio and equity flows are projected to grow
rapidly as the business environment becomes more attractive. FDI is projected to rise from
2.3% of GDP in 2012 to 3.8% of GDP at the end of EDPRS 2.

The Fiscal Accounts

8.9. Exports and investment growth render the economy less dependent on aid. This is further
translated into the fiscal accounts as external grants are projected to stay constant in nominal
terms at USD650 million each fiscal year corresponding to a decline from 10.5% of GDP in
2013/14 to 6.2% of GDP in 2017/18, (Figure 8.4). Domestic revenues are projected to increase
from 15.1% of GDP in 2013/14 to 16.3% of GDP in 2017/18.

Figure 8.4 Government Revenues as Percentage of GDP

30
25.6 25.6
25 24.4
23.3 22.5
8.7 6.2
20 10.5 10.2
7.4
15

10

5 15.1 15.4 15.6 15.9 16.3

0
2013/14 2014/15 2015/16 2016/17 2017/18

Total Revenue Grants Domestic Revenue

Source: MINECOFIN staff estimates and projections.

8.10. Total expenditure as a percentage of GDP will initially rise to fund public investment, but
decline after 2015/16 as capital expenditure is reduced. The fiscal deficit will initially increase
to 5.4% of GDP in 2015/16 and decline thereafter (Figure 8.5).

111
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Figure 8.5 Government Expenditures and Fiscal Deficit

35

30

25
Total Revenues
20
Total Expenditures
15

10 Fiscal Deficit

-5

-10
2013 2014 2015 2016 2017

Source: MINECOFIN staff estimates and projections.

The Monetary Sector

8.11. Money stock is assumed to grow in line with economic activity in order to keep inflation
low and stable. As public financing by the domestic banking sector will be minimised, credit
to the economy is projected to average more than 18% of GDP during the EDPRS 2 period,
ensuring sufficient funding for the expansion of private sector activity.

8.12. Bearing in mind the challenging international environment and uncertainties characterising
the domestic and global economy underpinning the EDPRS2 macroeconomic framework,
‘alternative’ scenarios will be developed and updated every year under the Policy Support
Instrument Programme with the International Monetary Fund as more information becomes
available.

The Cost of Implementing EDPRS 2

Summary costs

Cost of the initiatives linked to the Thematic Areas RWF 4,738 billion
Cost of the initiatives linked to Foundational Issues RWF 3,292 billion
Cost of support functions (such as wage bill) RWF 1,899 billion
Total government expenditure during EDPRS 2 RWF 9,929 billion

Note: These costs do not include the costs of EDPRS 2 initiatives expected to be privately funded.

112
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.13. Costing of the EDPRS 2 was done through Sector Strategic Plans and District Development
Plans. When planning for EDPRS 2, each sector was required to prepare a Sector Strategic
Plan (SSP) and each district was required to prepare a District Development Plan (DDP). Each
sector and district developed its own costing according to their specific needs assessment
following uniform guidelines issued by MINECOFIN. The cost information presented (all in
2012/13 constant prices) reflects each of the sectors’ and districts’ estimates of what it will
cost to implement the outputs described in their strategies. District costs have been integrated
and presented within sector outcomes to which they will contribute through implementation
of DDPs. The expenditures that are not costed as part of the strategies, such as the wage
bill, routine recurrent expenditure for ministries and other similar have been analysed and
projected based on existing trends and requirements for efficient delivery of public service
functions.

8.14. The overall purpose of costing EDPRS 2 is to prioritise budget allocations and public
expenditure towards the EDPRS 2 core programmes. The costing of EDPRS 2 priorities guides
the development of the medium-term expenditure framework and orients public spending.
The decision on actual spending will be made through the annual planning and budgeting
process. The financing depends on the availability of funds and the relative priority given to
the various initiatives set out in EDPRS 2 in that particular year.

Total Costs for EDPRS 2 initiatives

8.15. The estimated total cost to the government of implementing EDPRS 2 is RwF 8,030 billion,
which is spread fairly evenly across the five years 2013/14 to 2017/18. Table 8.2 below shows
the yearly evolution of costs during the EDPRS 2 period and also the split between thematic
areas and foundational issues.

Table 8.2 Total Cost of EDPRS 2 Showing Thematic Areas and Foundation Sectors (RwF million)

Total EDPRS 2 % of the

2013/14 2014/15 2015/16 2016/17 2017/18 Total
(RWF million) Total

Thematic 1,078,684 1,057,029 957,624 848,162 796,528 4,738,026 59%

Areas
Foundational
Sectors 644,321 627,897 638,727 669,328 712,193 3,292,467 41%
Total 1,723,005 1,684,926 1,596,351 1,517,490 1,508,721 8,030,493 100%

Breakdown of Costs by Thematic Area

8.16. The costs in SSPs and DDPs have been aligned to the four Thematic Areas and the
Foundational Issues. The implementation of the programmes and projects within the four
thematic areas will largely determine the transformative impact that EDPRS 2 will have
on Rwanda’s economy, on rural development on youth development, and on accountable
governance. Table 8.3 below shows the shares of EDPRS 2 costs linked to the four thematic
areas.

113
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Table 8.3: Total costs by Thematic Area (RWF million)

Total EDPRS 2 (RWF million) 2013/14 2014/15 2015/16 2016/17 2017/18 Total

Economic Transformation 284,774 380,100 390,187

261,488 197,416 1,513,966
Rural Development
635,519 514,674 410,987 419,978 425,659 2,406,818
Productivity and Youth 145,383 133,104 146,845 156,517 164,424 746,273
Employment
Accountable Governance 13,009 29,151 9,605 10,178 9,028 70,970
Total 1,078,684 1,057,029 957,624 848,162 796,528 4,738,026

8.17. Largest spending is projected to cover Economic Transformation and Rural Development.
Over the next five years, the cost of programmes and projects falling within the thematic
areas of Economic Transformation and Rural Development collectively account for over 80%
of the total projected costs of the four thematic areas. This is in line with EDPRS 2 goals of
promoting economic growth while also accelerating poverty reduction. Figure 8.6 highlights
the percentage breakdown of the total thematic area costs over the five years of EDPRS 2
between the four thematic areas:

Figure 8.6 Percentage Share of Total Thematic Costs over the Duration of EDPRS 2 by
Thematic Area

32% Rural Development

16%
Economic Transformation
1%
Productivity and Youth Development

51% Accountable Governance

Source: MINECOFIN

114
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.18. All Sectors and Districts will contribute to all thematic areas. From Table 8.4 to 8.22 each
national sector envisages contributing to at least one of the four thematic areas. This further
reinforces the interlinked nature of the EDPRS 2.

Table 8.4 Breakdown of Economic Transformation Thematic Area by Sectors (RwF million)

Total EDPRS 2 (RWF

2013/14 2014/15 2015/16 2016/17 2017/18 Total
million)
Energy 116,707 136,107 169,118 104,184 23,992 550,109
PSD and Youth 46,374 52,022 55,168 54,703 54,263 262,530
ICT 21,605 67,232 67,169 11,880 11,880 179,764
Transport 45,385 58,363 32,850 18,023 22,413 177,034
Agriculture 20,180 24,040 28,170 36,578 50,149 159,117

Urbanisation and Rural 28,826 28,826 28,826 28,826 28,826 144,128

Settlements
ENR 1,952 5,120 4,938 3,238 1,771 17,019
Finance 2,246 2,391 2,448 2,556 2,623 12,264
Decentralisation 1,500 6,000 1,500 1,500 1,500 12,000
Total 284,774 380,100 390,187 261,488 197,416 1,513,966

8.19 For economic transformation, energy and private sector development (PSD) emerge as the
leading sectors, accounting for more than half the total cost (see Figure 8.7). In the Energy
Sector, most of the costs are derived from survey and assessing the feasibility and subsequent
development of projects such as geothermal, methane and peat that promote Rwanda’s
self-reliance in power. For PSD, initiatives to promote economic opportunity such as credit
expansion to facilitate businesses, development of SEZs and an integrated logistics system
figure as prominent cost drivers.

Figure 8.7 Percentage Contribution of Sectors to the Cost of Economic Transformation

Energy 36%

PSD and Youth 17%

ICT 12%

Transport 12%

Agriculture 11%

Urb. and Rural Set. 10%

Others 3%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Source: MINECOFIN

115
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Table 8.5 Breakdown of Rural Development Thematic Area by Sectors (RwF million)

Total EDPRS 2 (RWF million) 2013/14 2014/15 2015/16 2016/17 2017/18 Total

Agriculture 266,075 278,413 256,972

265,997 269,108 1,336,564
WATSAN
288,182 150,093 67,332 67,332 67,332 640,270
Transport 72,958 77,844 78,189 79,100 81,797 389,889
Social Protection 4,339 4,361 4,386 4,723 4,748 22,556
Finance 3,925 3,923 4,109 2,826 2,674 17,458

Decentralisation 40 40 - - - 80
Total 635,519 514,674 410,987 419,978 425,659 2,406,818

8.20 Better land use, increased agricultural productivity and improved connectivity form the
backbone of the Rural Development Strategy. Consequently, agriculture accounts for more
than half the total costs for this thematic area (see Figure 8.8). Increasing the network of
feeder roads, developing radical and progressive terraces, increasing access to better inputs
by farmers are envisaged as the way forward to promoting rural development, and are
consequently the cost drivers for this thematic area.

Figure 8.8 Percentage Contribution of Sectors to the Cost of Rural Development

Agriculture 56%

WATSAN 27%

Transport 16%

Social Protection 1%

Finance 1%

Decentralisation 0%
0% 10% 20% 30% 40% 50% 60%

Source: MINECOFIN

116
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.21. For Productivity and Youth Employment, Education sector takes the lion’s share. (see Figure
8.9). The majority of the cost under this thematic area goes towards the Education Sector.
This can be attributed to the scale-up to 12 years basic education and the increased drive
for skills development through TVET. Also, Private Sector Development and Youth account
for around 13% of the total costs especially with scale up of BDF and strategic investments in
priority export sectors.

Table 8.6 Breakdown of Productivity and Youth Employment Thematic Area by Sectors (RwF

Total EDPRS 2 (RWF million) 2013/14 2014/15 2015/16 2016/17 2017/18 Total

Education 128,320 114,556 120,922 132,097 138,398 634,293

Youth
7,138 7,499 15,029 13,537 15,833 59,036
PSD 6,956 8,080 7,889 8,155 7,260 38,700
ICT 2,209 2,159 2,159 2,008 2,008 10,543
Finance 760 810 846 720 566 3,701
Total 145,383 133,104 146,845 156,517 164,424 746,273

million)

Education 85%

PSD and Youth 13%

Others 1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Figure 8.9 Percentage Contribution of Sectors to the Cost of Productivity and Youth
Employment

Source: MINECOFIN

8.22. Decentralised functions which form the focal points for service delivery and participation
take up the largest proportion of Accountable Governance. The Accountable Governance strategy
lays great emphasis on citizens’ participation, strengthened public accountability and quality service
delivery. A key component of this is promoting accountability through decentralised institutions
and use of ICT in public and private sector to promote participation and enhance service delivery.

117
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Table 8.7 Breakdown of Accountable Governance Thematic Area by Sectors (RwF million)

Total EDPRS 2 (RWF % of the

2013/14 2014/15 2015/16 2016/17 2017/18 Total
million) Total

Decentralisation 9,953 26,095 9,605 10,178 9,028 64,859 91%

ICT
3,056 3,056 - - - 6,111 9%
Total 13,009 29,151 9,605 10,178 9,028 70,970 100%

Breakdown of Costs by Foundational Issues

8.23. Health and Education remain significant in the Foundational Issues. The foundational
issues are on-going programmes that contribute directly to long-term development that are
prerequisites for the existence of EDPRS 2. These foundational issues provide the base for the
realisation of the EDPRS 2 goals. Table 8.8 gives a breakdown of the EDPRS 2 costs that the
sectors have allocated to foundational issues:

Table 8.8 Breakdown of Costs of Foundational Issues by Sectors (RwF million)

Total EDPRS 2 (RWF

2013/14 2014/15 2015/16 2016/17 2017/18 Total
million)
Health 199,730 198,251 201,132 218,868 216,235 1,034,216

Education 169,693 164,899 181,401 199,628 233,762 949,382

Transport 46,871 72,769 57,914 64,669 81,718 323,940

Social Protection 50,999 60,310 69,004 69,726 73,311 323,350

WATSAN 87,623 40,224 38,499 22,699 6,900 195,945

JRLOS 35,573 38,788 38,204 39,438 41,803 193,806

ENR 22,301 22,027 23,753 28,132 32,613 128,826

ICT 15,636 14,958 12,866 10,568 10,332 64,361

PFM 11,932 11,932 11,932 11,932 11,932 59,658

Agriculture 2,755 2,286 2,719 2,371 2,421 12,535

Finance 538 464 490 509 534 2,535

PSD and Youth 500 500 500 500 500 2,500

Decentralisation 171 490 313 288 133 1,395

Total 644,321 627,897 638,727 669,328 712,193 3,292,467

118
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

8.24. As expected, health and education account for about 60% of total foundational costs (see
Figure 8.10) especially the costs for continuing of pre-primary and primary education with
improved curriculum, measures to improve the quality of education and the sustained efforts
towards achieving the MDGs in both health and education.

Figure 8.10 Percentage Contribution of Sectors to the Cost of Foundational Issues

Health 31%

Education 29%

Transport 10%

Social Protection 10%

WATSAN 6%

JRLOS 6%

ENR 4%

Others 4%

0% 5% 10% 15% 20% 25% 30% 35%

Source: MINECOFIN

8.25. For EDPRS 2, the costs from sectors and districts are classified as projects under six
categories: Capital, Operational, Maintenance, Capacity Building, Service Delivery, and Non-capital
projects. Based on these divisions, the costs of EDPRS 2 are presented below in Table 8.9.

Table 8.9 Total Cost of EDPRS 2 by Type of Expenditure (RwF million)

Total EDPRS 2 (RWF

2013/14 2014/15 2015/16 2016/17 2017/18 Total
million)

Capital Projects 867,144 761,265 672,595 568,397 479,341 3,348,742

Operations 102,573 112,059 116,346 120,824 125,300 577,102
Maintenance 49,838 60,994 63,261 55,397 60,533 290,022
Service delivery 443,896 471,295 481,703 521,791 578,836 2,497,522
Capacity Building 55,264 65,256 36,820 37,239 40,798 235,377
Non-capital 204,291 214,062 225,631 213,846 223,898 1,081,727
Total 1,723,005 1,684,931 1,596,356 1,517,495 1,508,707 8,030,493

119
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

8.26. The focus is on development expenditure and service-delivery. This emphasis on capital and
service-delivery is derived from the country’s ambition to fast track its development and reach
middle-income status by 2020 and is reflected in the priorities set-out under the thematic
strategies. For instance, the Economic Transformation strategy specifically outlines both
capital-intensive and service delivery initiatives such as increasing the domestic and external
connectivity of Rwanda and providing improved infrastructure. Similarly, the Productivity and
Youth Employment strategy emphasises the development of critical skills and attitudes, and
encouragement of entrepreneurship through initiatives such as increased access to finance.
Figure 8.11 below displays relative shares of the different kind of expenditure in EDPRS 2 costs.

Figure 8.11 Percentage Share of Different Types of Projects in EDPRS 2 Costs

13% Capital Projects

3%

Operations

Maintenance
42%

Service Delivery
31%

Capacity Building

Non-Capital

4% 7%

Source: MINECOFIN

Breakdown of Costs by Sector

Overall spending is dominated by Productive and Social Sectors including Education, Agriculture,
Health, Water and Sanitation, Transport and Energy which combined account for around 80% of
required costs. This demonstrates the overall importance across sectors given to the overarching
goals of growth and poverty reduction. Table 8.10 shows how each sector has allocated its EDPRS
2 costs to thematic areas and foundational issues.

120
 Contribution to Thematic Areas Contribution to Foundational Issues
Total for 5 % of
Sector
2013/14 2014/15 2015/16 2016/17 2017/18 2013/14 2014/15 2015/16 2016/17 2017/18 years total
Table 8.10

Education 128,320 114,556 120,922 132,097 138,398 169,693 164,899 181,401 199,628 233,762 1,583,676 20%

Agriculture 286,255 302,453 285,142 302,575 319,256 2,755 2,286 2,719 2,371 2,421 1,508,233 19%

Health 0 0 0 0 0 199,730 198,251 201,132 218,868 216,635 1,034,216 13%

(Rwf million)

Transport 118,344 136,207 111,039 97,123 104,210 46,871 72,769 57,914 64,669 81,718 890,864 11%

WATSAN 288,182 150,093 67,332 67,332 67,332 87,623 40,224 38,499 22,699 6,900 836,215 10%

Energy 116,707 136,107 169,118 104,184 23,992 0 0 0 0 0 550,109 7%

PSD and Youth 60,468 67,601 78,086 76,395 77,716 500 500 500 500 500 362,766 5%

121
Social 4,339 4,361 4,386 4,723 4,748 50,999 60,310 69,004 69,726 73,311 345,906 4%
Protection
ICT 26,870 72,446 69,328 13,887 13,887 15,636 14,958 12,866 10,568 10,332 260,779 3%

JRLOS 0 0 0 0 0 35,573 38,788 38,204 39,438 41,803 193,806 2%

ENR 1,952 5,120 4,938 3,238 1,771 22,301 22,027 23,753 28,132 32,613 145,844 2%

Urban and Rural 28,826 28,826 28,826 28,826 28,826 0 0 0 0 0 144,130 2%

Sector
Decentralisation 11,493 32,135 11,105 11,678 10,528 171 490 313 288 133 78,334 1%

PFM 0 0 0 0 0 11,932 11,932 11,932 11,932 11,932 59,658 1%

Shaping Our Development

Finance 6,930 7,124 7,403 6,102 5,863 538 464 490 509 534 35,958 0%
Projected Sector Cost Division between Thematic Areas and Foundation Sectors

Total 1,078,685 1,057,029 957,625 848,162 796,528 644,321 627,897 638,727 669,328 712,193 8,030,495 100%
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

ANNEX 1 THEMATIC PRIORITIES AND OUTCOMES MATRICES

Economic Transformation
LEAD
THEMATIC
THEMATIC OUTCOME INTERVENTIONS SECTORS/
PRIORITY
INSTITUTIONS
PRIORITY 1.1 Increased electricity • Create a clear roadmap Energy
AREA 1: generation capacity for investment aimed at
MINIFRA,
Interconnectivity to 563 MW, leveraging delivering increased access
EWSA, RDB
of Rwanda’s large-scale private to electricity and sufficient
economy sector investment and economic generation
through
• Target public finance
investments in
allocated to the electricity
hard and soft
sector to de-risk projects
infrastructure
for the private sector and
thereby attract a wider range
of investors on better terms.

1.2 Accelerated access • Fast-track the provision RDB, MINICOM,

to electricity, water, of electricity, water, roads MINECOFIN,
roads and land to and land to priority areas MININFRA
priority sectors of the of investments so long as (EWASA,
economy and/or large these investments adhere to RTDA)
investors agreed upon development MINALOC,
criteria Districts,
MINAGRI
• Improve access to public-
(NAEB),
services by finalising the
MINIRENA
special economic zones
programme and investing
in four provincial industrial
zones.
• Development of a clear
mechanism to guide the
process of land-allocation for
investment projects, based
on a collaborative process
between investors, RDB,
relevant ministries, districts
and land owners.
• A national policy designed
to give accelerated access
to electricity, water, roads
and land to priority sectors
of the economy and/or large
investors approved.

122
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

1.3 Increased private • Business Linkages Challenge RDB

sector investment Fund to encourage private
targeted at sector investment in the
strengthening value agro-processing sector.
chain inter- linkages in
• Supplier development
priority sectors
programme in the
hospitality and tourism,
retail, construction services,
agribusiness and mining
sectors led by the RDB.
• Domestic supply constraints
and value chain inter-linkages
in priority sectors of the
economy strengthened.
PRIORITY AREA 2.1 Increased trade • Complete Phase I of the RDB,
2: External through improved air construction of Bugesera MININFRA,
connectivity and rail services to International Airport, RwandAir
of Rwanda’s and from Rwanda including cargo facilities, to
economy and be operational by 2017.
boosting exports
• Expand RwandAir, targeting
an annual turnover of
US$350m by 2018, based
on more aircraft and an
increase in the number of
destinations.
• Plans for railway connection
finalized and construction
starts before end of EDPRS 2
period.
2.2 Transformed • Establish an integrated MININFRA,
logistics system with logistics system based on RTDA,
a strategic focus a Kigali Logistics Platform, MINICOM
on exports and re- linked to Regional Logistics
exports to Burundi Centers, and supported by an
and Eastern DRC e-freight exchange system.
• Improve the sea-land
logistics system by building
off-dock container depots in
Mombasa and Dar es Salaam.
• Build One-Stop Border Posts
(OSBPs) in every Rwandan
border post to facilitate both
large and small-scale cross
border trade.
• Institutionalise the
monitoring of Non-Tariff
Barriers (NTBs) and work
with EAC countries and
institutions to steadily reduce
NTBs on the Northern and
Central Corridors

123
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

2.3 Accelerated • Upgrade Rwanda’s mining Mining

growth of exports sector through new (MINIRENA),
regulations, systems and an Tea/Coffee
enhanced understanding of (MINAGRI
mining resources. and NAEB),
Kivu Belt
• Invest in a large-scale tea
(MININFRA,
expansion programme,
RDB), Export
making six new factories
orientation
operational and expanding
of agro-
the tea production area by
processing and
18000ha, while ensuring
manufacturing
farmers are able to move out
sector (RDB)
of poverty.
• Intensification of capacity
building and research in the
coffee sector
• Finalise the Kivu Belt national
road to complete the tourism
circuit in Rwanda, thereby
significantly contributing
to the national objective
of diversifying Rwanda’s
tourism offering.
• Support an increase in the
export orientation of firms
in the agro-processing and
manufacturing sectors
by establishing an export
growth fund within RDB,
continuing the Trade
Linkages Programme, linked
to Export Councils.
PRIORITY AREA 3.1 Increased private • Strengthen the institutional RDB, MINICOM,
3: Transform the sector investment and set-up to pro-actively lead MINECOFIN
private sector financing and prioritise the investment
by increasing process.
investment in
• Transforming and better
priority sectors
funding the investment
promotion process with a
revamped strategic focus.
• The New Investor Code will
be finalised, advertised and
implemented during the
EDPRS 2 period

124
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

3.2 Accelerated • Enactment of the Pension MINECOFIN,

structural changes in Law. RSSB, BDF,
the financial sector, in BNR
• Enactment of the Trust Law
particular measures
to change the provisions for
to increase long-term
collective schemes.
savings and access to
international finance, • The RSSB consolidated by
with the objective of strengthened governance
increasing credit to and administration; improved
the private sector to investment management
20% of GDP by 2017 and performance; and
strengthening risk and cash
management.
• The bond market (ensuring
the regular issuance of
government bonds to give
banks greater access to long-
term funds) developed.
• Commercial bank lending
increased thereby
strengthening the current
credit guarantee programme
and reducing collateral
obligations.
• Create a creditor profile
electronic system that will
enable commercial banks
to verify potential lenders’
credit history.

125
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

3.3 Strengthened • Tax reforms (with the aim RDB, MINICOM,

business environment of providing additional Districts, DG
through regulatory incentives for investment, in Immigration
reform to spur conjunction with the passing and Emigration
medium and large of a new investor code) put
enterprise growth in place.
and attract large
• Double taxation agreements
investors in priority
with all strategic partners (in
and emerging sectors
order to attract investment
of the economy
and start positioning
Rwanda as an attractive
financial services investment
destination) signed.
• District-level business
environment reforms
(targeted at alleviating
licensing constraints, access
to land and construction
permits) implemented.
• Insolvency process simplified.
• Flow of highly skilled labour
from within and outside the
EAC facilitated.
• Enhance public private
dialogue (PPD) forum
to review sector specific
regulations.
PRIORITY AREA 4.1 Physical • An in depth review of the MININFRA
4: Transform development planning urban planning system. (RHA, RTDA),
the economic and economic MINALOC,
• Clear urban planning and
geography development planning MINIRENA
management guidelines.
of Rwanda combined and
by facilitating coordination of all
and managing development sectors
urbanisation strengthened
and promoting 4.2 A network of cities • National investments in
secondary cities and urban centers infrastructure planning and
as poles of created that provide development.
economic growth services and attract
• Develop integrated public
economic activities
transport systems in major
countrywide
urban areas.
• Develop funding
mechanisms, especially
related to affordable housing,
and develop the mortgage
finance industry.

126
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

PRIORITY AREA 5.1 Increased level of • Build the case for green MINIRENA,
5: Green Growth “green” investment urbanisation in Rwanda REMA,
and environmentally FONERWA
• Establish an institutional
sustainable urban
structure – a Center of
development
Excellence - to promote and
that exploits
develop green urban areas
‘green’ economic
and technologies.
opportunities
• Reform policies to support
green urban development.
• Develop a pilot ‘green’ city.
5.2 High • Develop an Environment and MINIRENA,
environmental Climate Change Innovation REMA,
standards and Center FONERWA
sustainable green
• Build a regulatory
innovations in the
environment that incentivises
industrial and private
green technologies and
sectors incentivised
innovation.
• Pilot promising ‘green’
technologies.
• Pilot a ‘model’ mine.

Rural Development

LEAD
THEMATIC
THEMATIC OUTCOME INTERVENTIONS SECTORS/
PRIORITY
INSTITUTIONS
Priority Area 1.1 Improved land • Securing land tenure MINIRENA/
1: Integrated rights and land for all land claimants RNRA,
Approach administration through systematic Land MININFRA,
to Land Use Administration. Coordinated MINALOC/
1.2 Enhanced rural
and Rural Land Use Planning through TF Rural
settlements which
Settlements District Land Use Master Settlements
facilitate access
Plans.
to basic services,
farm and off-farm • Layout plans of villages
economic activities designed through a
through integrated consultative process.
district land-use plans
• Land Use Planning is
Monitored and Enforced.
• Supporting the Growth,
Quality and Affordability of
Rural Housing.

127
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Priority Area 2.1 Increased • Irrigation Developed by MINAGRI, RDB

2: Productivity Productivity and Public and Private Sector.
and Sustainability Sustainability of
• Land Husbandry Approach
of Agriculture Agriculture
promoted across Rwanda.
2.2 Increased Private
• Farmer Field School scaled
and Public Advisory
- up.
Services to Farmers,
especially women and • Training of GoR extension
youth, for Agriculture workers.
Skill Development • Setting - up farmer
2.3 Farming promoters and animal health
Models scaled up works.
to link farmers and • Promote private extension/
cooperatives to agro- advisory services in fertiliser
processing and seed to support
privatisation.
• Models of bulking production
implemented.
Priority Area 3.1 Increased • Multi-sector graduation MINALOC,
3: Graduation and sustained opportunities are promoted. MINEDUC,
from Extreme graduation from core MINICOM
• Understanding and
Poverty social protection
monitoring graduation.
programmes for
male and female • Supporting effective informal
headed households financial services, that are
by connecting useful for the poorest, to
them to economic increase inclusion.
opportunities and • Supporting Financial
financial services Products for the Rural Poor.
• National Financial Education
and Literacy Strategy.
• Strengthen Umurenge
SACCOs.
3.2: Improved • Increasing the coverage of
targeting and the extreme poor through
effectiveness of VUP Direct Support and VUP
social protection Public.
interventions
especially for women
and child-headed
households

128
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Priority Area 4: 4.1 Quality road • Feeder Road Construction. MININFRA,

Connecting Rural network & rural feeder MINAGRI
• Capacity and Knowledge for
Communities roads extended and in
Communities in Road Works.
to Economic good condition
Opportunities
Through
Improved
Infrastructure
4.2 Increased access • Targeted grid electrification. MININFRA/
to electricity for rural ESWA
• Encourage rapid growth in
households
private sector solar products.
• Scale-up of off-grid micro -
hydro generation.
• Ensure energy education for
the population.
4.3 Increased rural • Improve sourcing of wood MININFRA,
households use of and charcoal sector support. MINISANTE
efficient cooking
• Promote biogas and
sources and methods
alternative sustainable
biomass sources.
• Promotion of improved
cooking stoves.
4.4 Increased • Pilot SMART Village. ICT, MINAGRI
connectivity by
• Support ICT expansion and
rural communities,
different types of products in
particularly rural
rural areas.
women and youth
farmers, to relevant • Support agriculture
information including information systems in reach
market information of farmers.
4.5 Increased • Quality of water delivery MININFRA/
access to water and improved. ESWA
sanitation facilities in
• Private sector management
rural areas
of water supply increased.
• Sanitation coverage is
improved in rural areas.

129
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Productivity and Youth Employment

LEAD
THEMATIC
THEMATIC OUTCOME INTERVENTIONS SECTORS/
PRIORITY
INSTITUTIONS
PRIORITY AREA 1.1 Curricula of • Review of secondary school Education,
1: Critical Skills educational curriculum. MINEDUC,
and Attitudes institutions meeting WDA
• Sector Skills Councils.
for Service and skill requirements of
Industrial Sectors employers
1.2 Male and female • Expansion in availability of Education,
graduates prepared quality TVET. MINEDUC,
for job market with WDA
• Internships and
critical skills needed
apprenticeships.
1.3 Access to skills • Adult literacy. Education,
training for adults, MINEDUC,
• Short courses.
particularly male and WDA, Private
female youth and • Tri-partite funding system for Sector
women employee training. Development
1.4 Decreased critical • Attracting Diaspora and Education,
skills gaps among international talent. WDA,
men and women MINEDUC,
• Scholarships in critical skills.
MIFOTRA,
MINICOM, RDB
1.5 Changing attitudes • National Youth Mentorship Youth, MYICT,
to work programme. MIGEPROF,
MIFOTRA
• Campaign to improve
women’s position in labour
market.

PRIORITY AREA 2: 2.1 A more productive • Investment in IT ICT, Private

The Role of ICT private sector infrastructure through PPPs. Sector
Development,
• Ensure all educational
Education
institutions connected to.
• ICT infrastructure.
2.2 A more productive • Experiments in improving ICT, Education,
public sector public service delivery Health
through ICT, such as
m-health, data collection
through SMS, and mobile
extension services.

130
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

PRIORITY AREA 3: 3.1 Increased MSME • Removing Barriers to Entry Energy

Entrepreneurship, businesses for Microenterprises. (MINIFRA,
Access to Finance EWSA, RDB)
• Access to finance for small
and Business
businesses.
Development
• Mentoring, information and
awareness.

3.2 Higher • Integrated business Private Sector

productivity amongst development services. Development,
MSMEs RDB, MINICOM
• Business training.
• Encouraging cooperatives
and associations.
• SME Product Clusters.
3.3 Better linkages • Proactive targeting of labour- Private Sector
between large firms intensive investment. Development,
and small firms RDB, MINICOM
• Supply chain linkages..
• Knowledge transfer
partnerships
PRIORITY AREA 4.1 Reduced • Employment Service Centers. Kigali City
4: Labour Market unemployment Council,
• Career Advisory Services.
Interventions among men and MIFOTRA,
women RDB, Higher
Education
Institutes,
MINEDUC,
WDA, TVET
Centers,
Schools

131
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Accountable Governance

LEAD
THEMATIC
THEMATIC OUTCOME INTERVENTIONS SECTORS/
PRIORITY
INSTITUTIONS
Priority Area 1.1 Increased 1. Encourage “home grown” Decentralized
1: participation by initiatives to promote citizen RGB
women and men in participation.
Citizens’
planning processes
Participation,
and solving their own
awareness and
problems
demand for
accountability
1.2 Enhanced • Use ICT to promote Decentralized
information flows participation and RGB
to, and participation development
of, women and men communication.
through established
and new channels
1.3 Strengthened • Regular district council Decentralized
accountability meetings with citizenry on Districts
development issues.
• Capacity Building for JADFs
and citizen assemblies.
Priority 2.1 Improved citizens’ • Development of a service All sectors
Area 2: Service scores on the delivery culture. RDB
Delivery provision of services
2.2 Improved • Creating a Five Star reward All sectors
awareness of service and recognition programme RDB
delivery standards for institutions that
and rights demonstrate exceptional
customer services.
• Establish an Institute of
Customer Services.

132
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

ANNEX 2 EDPRS MONITORING MATRIX

baseline
EDPRS out 2015/16 2017/18 responsibility Data source
indicators unit (2012)
come target target for reporting (MoV)
value
1 Increased GDP per capita US$ 644 837 1,000 MINECO- NISR
national FIN
income
2 Reduced Population be- Percent 44.9 30.2 <30 MINECOF- EICV
poverty low the poverty IN / NISR
line
3 Reduced ex- Population be- Percent 24 15 9 Social EICV
treme poverty low the poverty Protection
line living in ex- Sector
treme poverty
economic transformation
4 Increased Electricity gen- Mega 110 349 563 Infrastruc- EAPR
electricity erated Watts ture (Ener- Records
generation gy)
capacity
5 Accelerated (a) Exports to Percent 14.9 21.1 27.2 Private BNR
growth ex- GDP (Value of (Value (1029.9) (2,053.8) (3,401.5) Sector and
ports exports goods M$USD) Youth Em-
and services) ployment
(b) Non-tradi- Percent 56 60 60 Private BNR
tional exports/ (Value (332.1) (649.6) (978.8) Sector and
Total merchan- M$US) Youth Em-
dise exports ployment
6 Increased (a) FDI/ GDP Percent 2.3 3.5 4.5 Private MINECO-
private sector (Value (160) (342) (563) Sector and FIN
investment M$US) Youth Em-
and financing ployment
(b) Private Percent 10 13 15 Private FPC Cen-
investment/ (Value (693.5) (1,253.7) (1.864.9) Sector and sus (BNR/
GDP M$US) Youth Em- RDB)
ployment
(c) Credit to Percent 15.6 18 20.2 Financial BNR
the private Sector
sector/ GDP
7 Managed Population Percent 3.5 6.3 8.2 Urbaniza- NISR &
increase in living in urban tion and MININFRA
urbanisation areas of pro- rural settle-
through posed second- ments
development ary cities
of secondary
cities
8 Increased (a) Urban Percent 46 57 70 Infrastruc- EICV3
access to basic households ture (Ener-
infrastructure with access to gy)
at the urban electricity
level

133
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

(b) Urban Percent 86.4 95 100 Infra- MININFRA

households structure
within 200m (WATSAN)
of an improved
water source

(c) Urban Percent 83 95 100 Infra- MININFRA

households structure
with access to (WATSAN)
improved sani-
tation facilities

rural development

9 Increased Category 1 or Percent 9.8 30 50 Social NISR,

graduation 2 beneficiary Protection MINALOC
from extreme households
poverty who move to
Category 3 to 6

10 Increased Area under irri- Ha 25,490 34,196 40,000 Agriculture MINAGRI

productivity gation (Marsh-
and land & Hillside)
sustainability
of agriculture

11 Enhanced rural Rural house- Percent 37.5 56 70 Urban- NISR,

settlements holds living ization MINALOC
that facilitate in planned and Rural
access to basic (integrated & Settlement
services economically (MINALOC)
viable) settle-
ments
12 Increased (a) Rural Percent 5 50 70 Infrastruc- NISR,
access to basic households ture (Ener- MININFRA
infrastructure with access to gy)
for rural electricity
households

(b) Rural Percent 72.4 85 100 Infra- NISR,

households structure MININFRA
within 500m (WATSAN)
of an improved
water source

(c) Rural Percent 73 90.5 100 Infra- NISR,

households structure MININFRA
with access to (WATSAN)
improved sani-
tation facilities

(d) District Km 17.6 1,530 2,550 Infrastruc- RTDA,

earth road ture MINAGRI
Class 2
(Feeder road)
upgraded to
gravel road

11 Baseline relates to all businesses; however the majority of registered business are SMEs. Targets are for SME growth.

134
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

Productivity and Youth Employment

13 Availability of Employers Percent 75.1 (2011) 88 95 Education HEC Study,

critical skills satisfied with MINEDUC
for service university
and industrial graduates
sectors
14 Increased en- New SMEs11 No. 9,000 13,500 17,000 Private MINICOM
trepreneurship registered Sector
and business annually and Youth
development Employ-
ment
Value of credit RWF 161 453 882 Private BNR
to SMEs by billions Sector and
banks and Youth Em-
MFIs/SACCOs ploy-ment

15 Increased Off-farm jobs No. 1.4m 2.0m 2.4m Private NISR, MI-
employment created (2010/11) Sector and FOTRA
in offi-farm Youth Em-
sector ployment

ACCOUNTABLE GOVERNANCE

16 Increased (a) Citizens Percent 76.7 80 90 Govern- RGBSC,

citizen satisfied with ance and GMO
satisfaction in decentra- Decentra
participation lization and lization
in planning participation Sector
processes and
solving their
own problems
(b) Citizens Percent 78.9 80 81 Govern- RGB,
satisfied with ance and MINALOC
gender parity Decen-
in leadership tralization
Sector &
Districts
17 Improved Citizens satis- Percent 57 70 80 Govern- RGSC
public fied with ac- ance and
accountability cess to public Decen-
and information tralization
democratic Sector
governance
18 Improved Citizens Percent 70.4 75 85 Govern- RGB
public service satisfied with ance and
delivery (timeliness Decen-
and quality of) tralization
service delivery Sector &
at the local Districts
level

FOUNDATIONAL AND CROSS CUTTING ISSUES

19 Reduced Total Fertility Rate 4.6 4.0 3.4 Health DHS/HMIS,

population Rate (TFR) (2010) MINISANTE
growth

135
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

20 Enhanced food Maize and Metric 15,909 66,909 100,909 Agriculture MINAGRI,
security and beans existing Tons MINISANTE
nutrition as food reserve

21 Equitable (a) Transition Percent 84.9/87.7 87.0/87.0 89.0/89.0 Education EMIS,

access to 12 from primary MINEDUC
years basic to lower
education secondary
(girls/boys)

(b) Transition Percent 97.8/94.0 96.0/96.0 96.0/96.0 Education EMIS,

from lower MINEDUC
secondary
to upper
secondary
(girls/boys)

22 Improved (a) Pupil: quali- Ratio 62:1 52:1 48:1 Education EMIS,
education fied teacher MINEDUC
quality and (Primary)
learning
outcomes
across all levels (b) Pupil: qual- Ratio 34:1 32:1 30:1 Education EMIS,
of education ified teacher MINEDUC
(Secondary)

23 Reduced Infant Infant Mortality /’000 50 (2010) 28 22 Health DHS/ HMIS

Mortality Rate MINISANTE

24 Reduced (a) Births % 63 (2011) 74 82 Health HMIS,

Maternal taking place in MINISANTE
Mortality health facilities
(HC+DH)

(b) Maternal /100,000 476 268 220 Health HMIS,

Mortality Ratio MINISANTE

25 Reduced child Under five /’000 76 50 42 Health HMIS,

mortality mortality rate MINISANTE

26 Increased use Contraceptive Percent 45 (2010) 62 72 Health DHS, HMIS,

of modern utilization of MINISANTE
contraceptives modern meth-
ods by women
in unions aged
between 15-49
yrs
27 Reduced Sero-positivity Percent 1.5 1.0 0.6 Health TRACNET,
Mother- for HIV among MINISANTE
to-Child Pregnant
transmission Women
of HIV attending
Ante-natal
Clinics

136
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

28 Enhanced (a) Adult pop- Percent 73.3 74 >75 JRLOS RGB

rule of law, ulation with (2012)
accountability confidence in
and business the Rule of law
competitive-
ness environ-
ment
(b) Adult pop- Percent 91.3 (2012) 92 93 JRLOS RGB
ulation with
confidence
in safety and
security

(c) Adult pop- Percent 77.1 (2012) 78 79 JRLOS RGB

ulation with
confidence
in the control
of corruption,
transparency
and accounta-
bility
(d) Adult pop- Percent 73.6 75 76 JRLOS RGB
ulation with (2012)
confidence in
the Respect for
Human Rights
(Political Rights
and Civil Liber-
ties)
29 Increased Adult Percent 72 80 >85 Financial MINE-
awareness of population COFIN -
the benefits accessing FinScope
of financial financial Survey,
services and services NISR
products
30 Increased use Payment trans- Percent 41.5 65 75 FInancial BNR
of modern actions done
payment electronically
systems
31 Improved Tax revenue/ Percent 13.6 14.7 15.5 PFM RRA,
resource base GDP MACRO

32 Increased Districts Percent 75 85 95 Govern- MINALOC

effectiveness achieving a ance and
of delivery minimum of Decentrali-
of District 80 % of their zation
Development service delivery
Targets and sustainable
local develop-
ment targets
33 Reduction Skill Percent 25 50 70 MINECO- MINECOF-
of capacity requirement FIN/PSCB IN/PSCBS
gaps across levels available Sect.
sectors in line within priority
with national sectors to
development deliver EDPRS
priorities 2

137
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

ANNEX 3 EDPRS 2 MONITORING MATRIX SECONDARY INDICATORS

(Baselines and targets to be developed in EDPRS 2)
EDPRS out come outcome indicators unit responsibility for
reporting
ECONOMIC TRANSFORMATION
1 Increased access to basic infra- Urban District feeder roads in good Km Infrastructure
structure at the urban condition
2 Increased level of green invest- (a)Value of Green investments (FDI) M$US ENR/Private Sector &
ments Youth Employment
RURAL DEVELOPMENT
3 Increased productivity and sus- Yield of 6 priority crops (or better Rwf/Ha Agriculture
tainability of agriculture combined productivity measure)
PRODUCTIVITY AND YOUTH EMPLOYMENT
4 Availability of critical skills for (a) PercentageofTVET Graduates Percent MINEDUC/WDA
service and industrial sectors employed after Six months of
Graduation
(b) Employers satisfied with TVET Percent MINEDUC/WDA
graduates
(c) University Graduates employed Percent MINEDUC/WDA
one year after
5 Increased entrepreneurship and SMEs still in business two years after Percent Private Sector and
business development start-up (SME Survival) Youth Employment
6 Reduced under- employment (a) Off-farmworking population 16 to Percent Private Sector and
among youth 35 years under-employed (working Youth Employment
<35 hours/week)
(b) Off-farmworking population 16 to Percent
35 years extremely under-employed
(working <16)
7 Increased overall employment Jobs created annually No
8 Enhanced linkage of labour supply Job seekers matched to job Percent Private Sector and
and demand opportunities Youth Employment
ACCOUNTABLE GOVERNANCE
9 Enhanced media performance to Media development barometer Percent RGB
facilitate development
FOUNDATIONAL ISSUES
10 Increased utilization of financial Adult population with bank accounts Percent Financial
services

138
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

ANNEX 4 DISTRICT ECONOMIC TRANSFORMATION PRIORITIES

City of Kigali

DISTRICT PRIORITIES
GASABO Improve urbanization settlement as per Gasabo master plan through
developing affordable houses in collaboration with private sector &
other partners like Rwanda Social Security Board
Promote private sector investment through tourism development
and establishment of business development centers to tap into
investment opportunities like Kigali Conventional Center
Improve the transport network in the district by; constructing
fly-overs in high density areas to reduce traffic jam & ease doing
business, create dedicated bus lanes on expanded roads, secure 17
km of land and construct rapid bus terminals
Sensitize, train and mobilize citizens and private sector to tap into
investment projects in the Special Economic Zone in order to create
forward and backward linkages ( Between SMEs and large firms in
the Special Economic Zone)
NYARUGENGE Fast track implementation of Nyarugenge district master plan
projects such as; development of Nyabugogo Modern Market,
construction of business centers in Muhima and Nyarugenge and
mobilizing private sector to invest in those projects
Promote tourism within the district by developing existing potentials
like Mt. Kigali (historical site where some kings built palaces in the
past centuries)
Improve the urbanization and settlement patterns in the district
through development of Phase 1 of Central Business District (CBD)
in Muhima, construction of residential townships in Kanyinya,
Akumunigo and Rugarama
KICUKIRO Improve road networks through; construction & rehabilitation of
existing roads in conjunction with transport sector, developing road
junctions & fly-overs, expanding the width of existing main roads and
attracting more private companies in the public transport system
Facilitate and partner with the private sector in the construction of
six higher learning institutions and rehabilitation and construction of
eight modern markets
Promote urbanization and group settlements by; developing
identified sites through availing the necessary infrastructure,
partnering with private sector to construct affordable housing and
promotion of pro- poor building materials such as provision and
training of cooperatives on the use of hydro-foam machines
KIGALI CITY Improve road network in the city to enhance trade through;
construction of 6 road junctions, developing dedicated bus lanes,
developing the Rapid Bus Terminal Corridor and build the capacity
for civil engineers

139
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

Promote urbanization and group settlements by establishing a land

bank to; facilitate affordable housing projects, public parks and plazas
among other projects.
Improve the city road network by constructing both asphalt
(30km) and stone paved roads (100km), rehabilitating existing poor
roads (29.5km) and liaising with Central Government Agencies like
MININFRA to avail enabling infrastructure such as electricity to
reduce the cost of doing business for private investors.

NORTHERN PROVINCE
DISTRICT PRIORITIES
BURERA Mobilize private sector in tourism development by constructing three
hotels on hills overlooking Ruhondo and Burera lakes
Modernizing agriculture by increasing wheat and Irish potatoes
production as priority crops to food security
GAKENKE Modernized agriculture with focus on coffee production for export
sector
Enhance partnership with private sector with strong focus in mining
sector (existence of Coltan, Wolfram, Cassiterite minerals)
GICUMBI Infrastructure development by constructing the district industrial park
Transforming agriculture by increasing productivity of wheat and milk
for cross border trade development
Mobilizing private sector in creation of factory for Urugarika rock
processing in construction products(tiles)
MUSANZE Modernize agriculture with special focus on promoting agro
processing industries for the main district products for exports (Irish
potatoes, wheat and pyrethrum)
Facilitate private investors in the district to promote and improve
tourism by liaising with relevant central government agencies to avail
necessary infrastructure like roads and electricity and partner with
higher learning institutions to develop and avail a pool of competent
and skilled personnel in tourism and hospitality
Finalize Musanze district land use master plan and the district
detailed physical master plan and enforce their implementation to
position the district as a secondary city and attract private sector to
develop low cost houses in the district
RULINDO Construction materials development as an input to the building of
peripheral area of Kigali City
Promote Private sector investment in use of alternative sources of
energy(solar and biogaz) for electricity connectivity
Construct Base-Kabasaza bridge and maintaining the main district
roads( 17km of Kirenge- Nyirangarama and 9 km of Ngoma-Cyuga)
to facilitate access to market for fruits and vegetables production

140
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

SOUTHERN PROVINCE

NYAMAGABE Construction of integrated value addition chain for tea and wheat
production as results of increased land use consolidation
Promote the public private partnership in livestock processing by
constructing 5 pig processing plants targeting meat market in Rusizi
and DRC
Improve the road infrastructure by rehabilitating Kaduha-Musebeya-
Uwinkindi-Kitabi road (69.9 km) to connect with Karongi district
KAMONYI Increase value addition for local production by constructing
transformation units for honey and pineapples. Promote business by
constructing Nkoto modern market.
Work with private investors to establish low cost houses catered for
district population as well as people from Kigali City
NYARUGURU Improve inter-district transport by constructing tarmac road Matyazo-
Kibeho-Akanyaru connecting to Huye district
Develop industry and services to support growth of religious based
tourism within Kibeho city.
MUHANGA Construction and operationalization of Agakiriro Center (handcraft
and exploitation of mining and quarries).
Processing of mining products to be done especially in areas not
suitable for agriculture
RUHANGO Construction of electricity lines in Bweramana-Mwendo- Kinihira-
Mbuye and Kabagali ( 5 electricity lines) for boosting business in
different trade centers
Increasing productivity of priority crops (maize, cassava, rice and
beans) by increasing the use of fertilizers for both food security
exports to Burundi).
NYANZA Construct feeder roads on 169km in all sectors of Nyanza district to
facilitate distribution and marketing of farmers products
Increase population access to electricity by constructing an electricity
line of Busasamana- Rwabicuma-Nyagisozi.
GISAGARA Promote pig rearing for development of meat market with focus on
pork production. .
Support initiation of 30000 SMEs, including those initiated by people
with disability, youth, women and historical marginalized people as an
improved social protection measure.
HUYE Promote Public Private Partnership in layout and development of
district industrial park
Attract private investors in the development of pharmaceutical
industry within the district.
Extension of electricity infrastructure to Rwaniro and Kigoma
sector and supply electricity to 25 new villages to attract education
investments.

141
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

WESTERN PROVINCE

KARONGI Increase production and crop productivity for selected export crops
(tea and coffee); and livestock production (fishes in cages and
isambaza, cattle, bees and small livestock) and slaughter houses
construction
Promote tourism activity on Lake Kivu and other tourism sites
(Karongi Environment Museum, Akarwa k’Amahoro, Source du
Nil, Chapeau de Napoleon, Nyungwe Forest) in relation to the
implementation of the Kivu belt project
NGORORERO Increase the mining productivity ( through modernized mining and
establishing a mining center)
Increase agricultural and livestock production (mainly promoting tea
and coffee for export, maize and cassava)
Urbanize Ngororero and Gatumba centers and develop at least one
model settlement (umudugudu) in every sector
RUTSIRO Increase crop production and productivity of both cash and food
crops (coffee, tea, maize, fruits and honey), post-harvests handling
storage system as raw materials for agro-processing industries
Develop the tourism through the construction of tourism
infrastructures (roads, hotels and beaches around Lake Kivu and eco-
lodges near Gishwati and Mukura forest)
Increase ICT penetration and awareness of ICT, and enhance access
to its utilization for private and public institutions for economic
transformation and rural development (all sectors).
RUBAVU Implement the Kivu belt project (construct roads, modern ports,
hotels) to smooth tourism, promote cross-border trade (mainly to
North Kivu) and inter-connection between Rubavu, Karongi, Rutsiro,
Nyamasheke, and Rusizi
Increase agricultural and livestock production (build carrot juice
transformation entities in Nyakiliba, Rugerero sectors; modern
slaughterhouse construction, leather collection and preparation,
exportation of processed meats ( pork, beef and poultry)
Enhance urbanization through development and implementation
of the City’s Master Plan (hard: roads, hotels, artificial park, and soft
infrastructure) and develop water transport and tertiary services.
RUSIZI Implement the Kivu belt project (construct roads, modern ports,
hotels) to smooth tourism, promote cross border trade (mainly to
south Kivu) and inter-connection between Rusizi, Nyamasheke,
Karongi, Rutsiro and Rubavu.
Develop business infrastructure while focusing mostly on feeder
roads, airport extension, shipping, shipyard and industrial park (i.e.
cement and rice)
NYAMASHEKE Agriculture promotion for increasing tea productivity as an input to
tea agro processing entities in the region plus horticulture, passion
fruits and macadamia promotion
Promoting the fishing production and aquiculture as source of off-
farm jobs

142
 ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
Shaping Our Development 2013 – 2018

NYABIHU Increase agricultural productivity for both food crops and export
crops (pyrethrum, wheat, Irish potatoes and maize) and increase
agro-processing units
Implement the provincial industrial park through zoning,
infrastructure development (agro-processing units: wheat and maize
processing plants), Modern markets construction and mobilizing the
private sector to invest in hotels services.

EASTERN PROVINCE

NYAGATARE Establishment of agro, livestock and animal feeds plants to develop

diary industry
Urban and rural infrastructure development (tarmac roads,20km)
feeder roads (300km) housing and electrification to tap rural-urban
forward and backward linkages
Position Nyagatare district as a secondary city focusing on the
livestock and diary and building materials
GATSIBO Coffee processing plant, maize processing, leather industry and
shoe-making plant
Develop diary industry through transformation of milk collection
centers into diary business centers
Modern settlement and Agakiriro business center
KAYONZA Promotion of mining sector (wolfram coltam and casselite) in
Rwinkwavu sector.
Increase access to electricity and rural water coverage to support in
the agro-processing plus feeder roads to boost agricultural growth
and SMEs
Support youth cooperatives in all sectors of districts, TVET
construction and youth centers in Mukarange sector and this will
support youth employment.
RWAMAGANA Modern settlement & center
Increase production and promotion of export crops (floriculture
currently at 300 ha
Develop tourism through the construction of tourism infrastructures
(4 new hotels and beaches around Lake Muhazi.
NGOMA Agakiriro development center to increase off-farm jobs
Attract private investors in industrial development with focus on palm
oil processing and paper factory
Urban and rural road network (construction of 15 Km of tarmac
roads, construction of 11.68 Km of stone paved roads, rehabilitation
of 350 km of feeder roads and upgrading (asphalt) of 53 km road
from Ngoma to Ramiro (Bugesera district to improve urban and rural
accessibility and easy movement of persons, goods and services

143
ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY
2013 – 2018 Shaping Our Development

KIREHE Modern settlement and Agakiriro business center in Nyakarambi town

1 cross border market, 3 hotels, 1 roadside station, Kibungo
Investment Group to be created in support of investment
Developing urbanization and settlement in Mulindi, Kiyanzi, Gatore,
Nganda and Rwanteru sectors
BUGESERA Promote tourism activity on virgin sites around the lakes; Rumira,
Mirayi, Kirimbi and Kodogo.
Promote private investment in fish farming in the 9 existing lakes and
fish ponds
Infrastructure development: (construction and operationalization
of industrial park and hotels and guest houses targeting Bugesera
Airport opportunities will: attract business, investors, services
providers and tourists. This will boost off-farm jobs

144
 NYAGATARE
NYAGATARE

MUSANZE
MUSANZE

RUBAVU
RUBAVU

MUHANGA
MUHANGA KIGALI
KIGALI

RUSIZI
RUSIZI HUYE
HUYE

@MinFinanceRw www.edprs.rw
@MinFinanceRw www.edprs.rw