Overview

  • Small and landlocked, Rwanda is hilly and fertile with a densely packed population of about 11.9 million people (2016). It borders the far larger and richer Democratic Republic of Congo, as well as its closest East African neighbors, Tanzania, Uganda, and Burundi. With the support of the International Monetary Fund (IMF) and World Bank, Rwanda has been able to make important economic and structural reforms, and sustain its economic growth rates over the last decade.

    Political Context

    Rwanda has guarded its political stability since the genocide in 1994. Parliamentary elections in September 2013 saw women fill 64% of the seats, and the Rwandan Patriotic Front maintain an absolute majority in the Chamber of Deputies. President Paul Kagame was re-elected to a seven-year term in the August 2018, following an amendment to the constitution in December 2015 allowing him to serve a third term.

    Economic Overview

    Rwanda’s long-term development goals are defined in “Vision 2020,” a strategy that seeks to transform the country from a low-income, agriculture-based economy to a knowledge-based, service-oriented economy with middle-income country status by 2020. To achieve this, the Government of Rwanda has developed the second Economic Development and Poverty Reduction Strategy (EDPRS 2), a medium-term strategy which outlines the country’s  overarching goal to accelerate growth and reduce poverty through four thematic areas: economic transformation, rural development, productivity and youth employment, and accountable governance.

    The EDPRS 2 aims to: raise gross domestic product (GDP) per capita to $1,000; reduce the percentage of the population living below the poverty line to less than 30%; and reduce the percentage of the population living in extreme poverty to less than 9%. These goals build on recent development successes over the last decade that include high growth, rapid poverty reduction and reduced inequality. Between 2001and 2015, real GDP growth averaged at about  7.8% per annum.

    Development Challenges

    Public investments have been the main driver of growth in recent years. External financing through grants, concessional and non-concessional borrowing played an important role in financing of public investments. Growth slowdown of 2016 and 2017 highlighted the limits of public sector-led growth model. Going forward, the private sector will  play a bigger role in helping to ensure economic growth. Low domestic savings, skills, and high cost of energy  are some of the major constraints to private investment. A stronger dynamism in the private sector will help to sustain high investment rate and accelerate the growth. Promoting domestic savings is viewed as critical.  

    Social Context

    . Rwanda’s strong  economic growth was accompanied by substantial improvements in living standards, with a two-thirds drop in child mortality and near-universal primary school enrolment. A strong focus on homegrown policies and initiatives has contributed to significant improvement in access to services and human development indicators. The poverty rate dropped from 44% in 2011 to 39% in 2014, while inequality measured by the Gini coefficient  stood at 0.45.

     

    Last Updated: May 16, 2018

  • World Bank Group Engagement in Rwanda

    The World Bank Group’s (WBG) Country Partnership Strategy (CPS) for 2014–2018 is framed around three thematic areas:

    1. Accelerating economic growth that is private-sector driven and creates jobs
    2. Improving the productivity and incomes of the poor through rural development and social protection
    3. Supporting government accountability through public-financial management and decentralization

    The CPS, prepared by the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), aims to catalyze higher volumes of private resources to support Rwanda’s development. It builds on the government’s Economic Development and Poverty Reduction Strategy (EDPRS 2) and on its proposed division of labor among development partners. The World Bank Group's portfolio in Rwanda currently includes 13 national projects with a net commitment of $ 1,159,37 million. Rwanda also participates in five regional projects worth a national commitment of $270 million. Project objectives have ranged from helping farmers manage marshland and hillside cropping, to supporting the strengthening of the social protection system, and providing electricity to rural households.

    International Finance Corporation (IFC)

    IFC’s program in Rwanda covers four main areas; capital and financial markets development; infrastructure and natural resources; manufacturing, agribusiness, and services; and small and medium enterprises (SMEs) development and investment climate reform. Through the Rwanda Entrepreneurship Development group, the IFC participated in a $6 million advisory program focusing on links to the tourism sector, non-farming jobs with the Ministry of Trade and Industry, an $8 million small and medium enterprises fund, and a center for business solutions.

    Multilateral Investment Guarantee Agency (MIGA)

    MIGA currently has one active project (KivuWatt) in Rwanda with at total gross exposure of $95.4 million. MIGA remains open for business in Rwanda across all  political risk insurance product lines, including transfer restriction, expropriation, breach of contract, war, civil disturbance, and the non-honoring of sovereign obligations.

     

    Last Updated: May 16, 2018

  • Some of the key projects and programs funded by the World Bank Group (WBG) include the Rwanda Electricity Access Scale-up and Sector Wide Approach Development Project ($130 million); Priority Skills for Growth ($120 million); Rwanda Urban Development Project ($95million); and Strengthening Social Protection Project ($80 million).  );)  Moving Towards Market-Oriented Agriculture         

    Through a three-phased Adaptable Program Loan (APL), the WBG supports The Rural Sector Support Project (RSSP), which focuses on intensifying production in the marshlands, followed by the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) project in 2010, which received additional financing in 2013. LWH  aims to increase productivity on hillsides and develop parts of these hillsides for irrigated horticulture. Through these projects, more than 7,400 hectares of marshland have been rehabilitated or developed, more than 1000 ha of hillside irrigated, and over 36,000 hectares of hillsides sustainably developed and protected against soil erosion by LWH and RSSP between 2010 and 2018. Maize yields have improved from 1.6 tons/ha to nearly five tons/ha; while rice yields have improved from three tons/ha to 6.30 tons/ha; and potato yields have improved from seven tons/ha to nearly 20 tons/ha. In addition, several rural infrastructures have been put in place to link productive areas to markets. Currently, 2.5 tons of high-end horticulture products are exported every week to Europe, thanks to hillside irrigation by LWH. So far, of 347,601 beneficiaries of the RSSP projects, more than 43% are women, as are 40% of the 292,737 beneficiaries of LWH. The impact created by these two programs is transforming rural Rwanda.

    Expanded Access to Electricity

    The World Bank has been actively supporting the government in addressing the major energy sector challenges. It has been the leading financier of the flagship grid electrification initiatives including Electricity Access Roll-out Program (EARP) with US$130 million, Rwanda Electricity Access Scale-up and Sector Wide Approach (SWAp) Development Project (EASSDP), and the US$95 million Rwanda Electricity Sector Strengthening project (RESSP). EASSDP has supported the government electricity access growth from 9% in 2009 to 42% in March 2018. 31% of the households in Rwanda are now connected to the national grid, while 11% are connected by off-grid means. RESSP is expected to connect at least 70,000 more households. The US$50 million Rwanda Renewable Energy Fund, financed by the Scaling-up Renewable Energy Program (SREP), is facilitating private sector participation in off-grid electrification through a financial intermediary facility hosted by the Development Bank of Rwanda, while the US$340 million regional Rusumo Falls Hydroelectric Project finances construction of an 80-megawatt hydropower plant that will increase the supply of electricity to the national grids of Rwanda, Tanzania and Burundi. A US$375 million Energy Sector Development Policy Loan series is supporting the Government’s objective of fiscally sustainable expansion of electricity services. MIGA offers a $95.4 million guarantee to Kivuwatt 25MW gas to power project. The project currently adds a 25MW the grid, and an additional 75MW is expected. 

    Strengthening Social Protection

    Through the Social Protection System Project, the WBG has helped expand the Vision 2020 Umurenge Program (VUP), the government’s main social safety net program. The direct support (cash transfers) grew from 6,850 households at its introduction in 2009 to cover the entire country with 94,520 households as of 2017, 71% of which are women headed households, and 29% men headed households. Other components also grew exponentially. A classic public works program grew from 30 sectors with 18,304 households at its launch in 2008 to 240 sectors (out of 416 sectors in the country) currently, and 142,893 households, 52.80% and 47.2% of which are respectively headed by women and men.

    The Expanded Public Works Component (ePW), which offers a flexible, year-round work schedule to moderately labor-constrained households caring for children, was introduced in 2016/2017 and currently cover 80 administrative sectors with 12,053 households, 71.4% of them headed by women and 28.6% headed by men. The total level of coverage is now more than 200,000 households, with more than a million beneficiaries, assuming an average household size of six  in the poorest quintiles (EICV4).

     

    Last Updated: May 16, 2018

  • Many ongoing projects supported by the World Bank have mobilized support from other development partners, including the  Nordic Development Fund, OPEC Fund for International Development, Netherlands (Electricity Access Project) and  USAID, Canada and the Global Agriculture and Food Security Program (GAFSP) (Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) Project.

    Last Updated: May 16, 2018

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LENDING

Rwanda: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

Main Office Contact
Blvd. de la Revolution
SORAS Building
Kigali, Rwanda
+250-591-3300
For general information and inquiries
Rogers Kayihura
Communications Officer
+250-591-3303
rkayihura@worldbank.org
For project-related issues and complaints
rwandaalert@worldbank.org