Overview

  • Small and landlocked, Rwanda is hilly and fertile with a densely packed population of about 12. 2 million people (2017). 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 the 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 1994 genocide. Parliamentary elections in September 2018 saw women fill 64% of the seats, the Rwandan Patriotic Front maintain an absolute majority in the Chamber of Deputies and, for the first time, two opposition parties, the Democratic Green Party of Rwanda and Social Party Imberakuri, winning seats (two each) in the parliament. 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 put in place implementation mechanisms to rapidly achieve its long-term goals. Over the last 10 years, Rwanda implemented two, five-year Economic Development and Poverty Reduction Strategies—EDPRS (2008-12) and EDPRS-2 (2013-18)—both designed to help the country realize its Vision 2020 development plan. Nested sector-specific strategies and district development plans reflecting Rwanda’s well-advanced decentralization drive helped guide EDPRS implementation. Rwanda is finalizing the National Strategy for Transformation (NST), the planned successor to EDPRS-2 covering the period of 2018–2024. Rwanda’s NST focuses on economic, social, and governance transformation toward the aspiration of Vision 2050.

    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 the high cost of energy are some of the major constraints to private investment. 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 enrollment. 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: Oct 12, 2018

  • World Bank Group Engagement in Rwanda

    The World Bank Group’s (WBG) Country Partnership Strategy (CPS) for 2014–2020 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 $ 1,275,46 million. Rwanda also participates in five regional projects worth a national commitment of $255.25 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, as well as 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. IFC also supported manufacturing and processing; $21 million was committed for the Africa Improved Food Limited Project to process nutrient fortified food in the Eastern Province, with a $6 million facility for maize cooperatives.

    Multilateral Investment Guarantee Agency (MIGA)

    MIGA currently has one active project, KivuWatt, with a total gross exposure of $95.4 million. MIGA continues to work remains open for business 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: Oct 12, 2018

  • Some of the key projects and programs funded by the World Bank Group (WBG) include the Rwanda Energy Sector Development Project ($125million), Priority Skills for Growth ($120 million); Rwanda Urban Development Project ($95million); and Strengthening Social Protection Project ($103  million).  

    Moving Towards Market-Oriented Agriculture

    Through the Rural Sector Support Project (RSSP)  and the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) Project, the World Bank has supported Rwanda to increase productivity on marshlands and hillsides through investments in irrigation. The project also allowed for investment in rural infrastructure, which have been put in place to link productive areas to markets.

    Between 2010 and 2018, these two projects contributed to the rehabilitation or development of more than 7,400 hectares of marshland; the irrigation of more than 2500 ha of hillsides; while over 38,500 hectares of hillsides were sustainably developed and protected against soil erosion. Maize yields have improved from 1.6 tons/ha to nearly five tons/ha; rice yields from three tons/ha to 6.30 tons/ha, potato yields from seven tons/ha to nearly 20 tons/ha. Currently, more 2.5 tons of high-end horticulture products are exported every week to Europe.

    So far, of 380,000 beneficiaries of the RSSP projects, more than 49% are women, as are 49% of the 318,000 beneficiaries of LWH.

    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 Rwanda Energy Sector Development Project (ESDP) with $125 million, and the $95 million Rwanda Electricity Sector Strengthening Project (RESSP).

    Through the Rwanda Electricity Access Scale Up and Sector Wide Approach Development Project (EASSDP), the government’s electricity access growth from 9% in 2009 to 42% in March 2018. Thirty-one percent of households are now connected to the national grid, while 11% are connected by off-grid means.

    A $375 million Energy Sector Development Policy Loan series is supporting the government’s objective of fiscally sustainable expansion of electricity services. Multilateral Investment Guarantee Agency (MIGA) offers a $95.4 million guarantee to Kivuwatt 25MW gas-to-power project. The project currently adds a 25MW the grid. 

    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 in 2009, to cover the entire country with 94,520 households as of 2017, 71% of which are headed by women. A classic public works program grew from 30 sectors with 18,304 households in 2008 to 240 sectors (out of 416 sectors in the country) currently; of the 142,893 households, 52.80% are headed by women.

    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. 

    Last Updated: Oct 12, 2018

  • Many ongoing projects supported by the World Bank have mobilized support from other development partners, including the Power of Nutrition and the Global Financing Facilities (Rwanda Stunting Prevention and Reduction Project).  

    Last Updated: Oct 12, 2018

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LENDING

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

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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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