ECONOMIC DEVELOPMENT & POVERTY …

1 THE REPUBLIC OF RWANDA. IKA Y'U RWAN. UBUL DA. REP. UB. UM U. WE UG. -U MURIM IGIH. O - GAKUNDA. ECONOMIC DEVELOPMENT &. POVERTY REDUCTION STRATEGY. 2008 - 2012. September 2007. CONTENTS. CONTENTS. ACRONYMS. GLOSSARY EXECUTIVE SUMMARY .. i 1 INTRODUCTION .. 1. 2 WHERE IS RWANDA NOW? .. 5. ECONOMIC growth has slowed, population growth continues to be rapid and the environment is under stress 5. POVERTY has fallen, but needs to fall faster to meet the MDG and Vision 2020 targets .. 12. Key indicators show that health has improved substantially, but inequalities in health outcomes persist.

2 18. Access to secondary education lags behind primary, but tackling quality aspects of primary education are also a high priority .. 21. Governance reforms are well advanced, but much remains to be done .. 25. Implications for the EDPRS .. 28. 3 WHERE DOES RWANDA WANT TO BE IN 2012? .. 29. Implicit targets for the Millennium DEVELOPMENT Goals in 2012 .. 29. Targets for Rwanda Vision 2020 .. 33. Targets for the EDPRS in 2012 .. 33. 4 WHAT DOES RWANDA DO TO GET THERE? .. 46. The Growth for Jobs and Exports flagship programme .. 48. The Vision 2020 Umurenge Flagship Programme.

3 71. The Governance flagship programme .. 77. Complementary sectoral interventions to achieve the EDPRS targets .. 91. 5 HOW DOES RWANDA GET IT DONE ? .. 102. Implementation framework for the EDPRS .. 102. Align individual incentives to planning priorities .. 103. Extend and consolidate the process of decentralisation .. 104. Flagship programmes will strengthen inter-sectoral coordination .. 105. Improve public financial management .. 108. Promote greater harmonisation and alignment of donors with the EDPRS priorities .. 109. Assign a greater role in policy implementation to markets and the Private Sector.

4 111. Implementation issues at sectoral level .. 112. Effective implementation requires good communication .. 118. 6 HOW MUCH WILL IT COST AND WHAT ARE THE MACROECONOMIC IMPLICATIONS?.. 119. EDPRS costs .. 119. Sector allocation of EDPRS costs .. 122. EDPRS financing requirements .. 124. Summary of costs and financing flows .. 126. Possible financing methods .. 127. Macroeconomic implications .. 129. 7 HOW WILL RWANDA KNOW IT IS GETTING THERE? .. 133. The institutional framework of monitoring .. 133. The EDPRS indicator system .. 133.

5 Implications for the statistical system .. 143. Evaluation of EDPRS interventions .. 144. APPENDIX 1: APPENDIX TO CHAPTER 1 .. 146. APPENDIX 2: APPENDIX TO CHAPTER 2 .. 148. REFERENCES .. 154. FIGURES. Figure EDPRS Coordination Mechanism .. 3. Figure POVERTY and population density .. 9. Figure holdings in 2000/01 (EICV1) and 2005/06 (EICV2) .. 10. Figure Increase in Cultivated Area (ha) and Yield (kg/ha), 2000-2005 (Average Percent change) .. 11. Figure Changes in POVERTY at regional and national level (poor people as a % of the population).

6 15. Figure Gini coefficient of inequality in the African context .. 16. Figure Food insecurity (% of food insecure households by food economy zone .. 18. Figure Framework for decentralised accountability .. 26. Figure Pro-poor growth anchored in good governance .. 47. Figure EDPRS and planning linkages .. 103. Figure Planning and reporting tools for implementing the EDPRS .. 104. Figure Coffee Washing Stations a critical path analysis .. 107. Figure Central Government Imihigo .. 108. Figure Public spending to induce private investment.)

7 121. Figure Public and private investment to achieve EDPRS targets .. 122. Figure Summary debt sustainability .. 129. Figure Indicators form a causal chain .. 135. Figure EDPRS indicators and sector logframes .. 141. Figure Traffic light reports to monitor progress towards sectoral EDPRS objectives .. 142. TABLES. Table Trend real growth rate by activities (5-year averages in percent) .. 6. Table POVERTY headcount (share of population and number) .. 13. Table Own distribution of poor by categories .. 13. Table Major causes of POVERTY identified.

8 14. Table Childhood mortality (per 1,000 live births) and MMR (per 100,000 births) .. 18. Table Progress against Rwanda Vision 2020 targets and Millennium DEVELOPMENT Goals .. 30. Table Targets for the EDPRS in 2012) .. 45. Table The growth diagnostic approach applied to Rwanda .. 49. Table Investment climate: Key factors for foreign investors .. 50. Table Infrastructure costs in Rwanda compared to neighbouring countries .. 51. Table Priority Export Actions .. 55. Table Summary growth flagship .. 71. Table Summary of the VUP flagship.

9 76. Table Summary of governance flagship .. 89. Table EDPRS costs, in billion RWF .. 120. Table EDPRS costs, in USD per capita .. 120. Table Proposed shares of public expenditure by sector for the EDPRS period 2008-2012. (in billion Rwandan francs, unless otherwise indicated) .. 123. Table Public financing of EDPRS .. 125. Table EDPRS costs and financing, in percent of GDP .. 126. Table EDPRS costs and financing, in USD per capita .. 127. Table Possible financing methods .. 128. Table Selected ECONOMIC and financial indicators, 2007-2012.

10 130. Table EDPRS Strategic Outcome Indicators .. 136. Table EDPRS Intermediate Indicators .. 137. Table EDPRS Summary Policy Matrix .. 138. Table EDPRS Second Generation Indicators .. 140. ACRONYMS. AfDB African DEVELOPMENT Bank AIDS Acquired Immune Deficiency Syndrome ART Antiretroviral Therapy ARV Antiretroviral BCC Behaviour Change Communication BNR Banque Nationale du Rwanda CDF Community DEVELOPMENT Fund CDLS District AIDS Committee CEM Country ECONOMIC Memorandum (World Bank). CSO Civil Society Organisation DAC DEVELOPMENT Assistance Committee DDP District DEVELOPMENT Plan DfID Department for International DEVELOPMENT DHS Demographic and Health Survey EDPRS ECONOMIC DEVELOPMENT and POVERTY Reduction Strategy EICV Enqu te Int grale sur les Conditions de Vie des M nages (Households Living Conditions Survey).