Overview

«

»

Context
Strategy
Results
Partners

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 two seats 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 now aspires to Middle Income Country (MIC) and High-Income Country (HIC) status by 2035 and 2050, respectively. The Vision will be effected through a series of seven-year National Strategies for Transformation (NST1), underpinned by detailed sectoral strategies that are aimed toward achievement of the SDGs. The NST1 came after the implementation of two, five-year Economic Development and Poverty Reduction Strategies—EDPRS (2008-12) and EDPRS-2 (2013-18), under which Rwanda experienced robust economic and social performances. The growth averaged 7.5% over the decade to 2017 while per capita growth domestic product (GDP) grew at 4.7% annually.
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 39.1% in 2014 to 38.1% in 2017, while inequality measured by the Gini coefficient stood at 0.42.

Last Updated: Apr 08, 2019
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:
Accelerating economic growth that is private-sector driven and creates jobs
Improving the productivity and incomes of the poor through rural development and social protection
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 14 national projects with a net commitment of $1,185.77 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: Apr 08, 2019
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).
Expanded Access to Electricity
The World Bank has been long-term partner to the Government of Rwanda in supporting their energy sector development agenda. The Bank has been the leading financier of the flagship grid electrification program, Electricity Access Rollout Program (EARP), contributing more than $170 million to the country’s electrification agenda through Rwanda Electricity Access Scale Up and Sector Wide Approach Development Project and the Rwanda Electricity Sector Strengthening Project (RESSP). Through consistent and well-planned implementation of EARP, Rwanda has increased its electricity access from 9% in 2009 to 47% in February 2019, with the World Bank supporting electrification agenda not with just financing infrastructure investments but also contributing to development of the electrification prospectus, crowding in contributions of other donors and maintaining constant technical dialogue with Rwanda Energy Group (REG). The World Bank is also supporting off-grid electrification in Rwanda through Renewable $50 million Energy Fund, funded by Scaling-Up Renewable Energy Program and implemented by the Development Bank of Rwanda.
Moreover, RESSP supports REG with improving commercial function of the electricity utility and streamlining their internal operational and reporting functions.
Additionally, Rwanda Energy Sector Development Policy Loan series ($375 million over three years) is supporting the electricity sector reform program of the Government of Rwanda that aims at putting Rwanda’s electricity sector on low-carbon, financially sustainable and affordable path.
Strengthening Social Protection
Through the Social Protection System Project, the Bank has helped expand the Vision 2020 Umurenge Program (VUP), the government’s flagship social protection program. The direct support (cash transfers) grew from 6,850 households in 2009, to cover the entire country with 106,000 households as of 2018, 71% of which are headed by women. A classic public works program grew from 30 sectors with 18,304 households in 2008 to 244 sectors (out of 416 sectors in the country) currently benefiting 134,703 households; of the 142,893 households, 50% of which are female headed.
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 13,142 households, 72% of them headed by women. Within ePW, a new type of employment was recently introduced, namely childcare in Home and Community Based Childcare also supported through the ongoing Investment Project Financing instrument. The latter also introduced the Nutrition Sensitive Direct Support, a conditional cash transfer targeted to poorest households (approximately 60,000 households in 13 districts) with pregnant women and/or children under two, with a co-responsibility to uptake health and nutrition services. These two latest innovations made the VUP’s more gender and child-sensitive. Overall, different components of VUP benefit more than one million individuals in all the targeted households.
Enhancing Infrastructure for Urban Development
Through the Rwanda Urban Development Project (RUDP), the World Bank is supporting Rwanda to provide access to basic infrastructure and enhance urban management in secondary cities and City of Kigali. At its midpoint of implementation, RUDP has successfully completed the first phase of investments in urban roads (28.3km) and stand-alone drainage (13.8km) across six secondary cities. The project has also supported these cities to draft and endorse Local Economic Development (LED) strategies with which they can guide local economic activities and private investments, as well as prioritizing their public investments. Since the start of the project in 2016, nearly 65,000 people have benefited of whom more than half are women. In City of Kigali, the project supports the upgrading of 86ha unplanned settlement in Nyarugenge District which is home to almost 19,00 people by providing access streets, footpaths, drainage and street lighting.

Last Updated: Apr 08, 2019
Many of Rwanda’s ongoing development projects are supported by the World Bank along with support from development partners, including Scaling Up Nutrition and the Global Financing Facility, which support the Rwanda Stunting Prevention and Reduction Project.

Last Updated: Apr 08, 2019