Overview

  • Country 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. An amendment to the constitution in December 2015 paved the way for the re-election of President Paul Kagame in August 2017 to third 7-year term in office.

    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. In order to achieve this, the Government of Rwanda has come up with a medium-term strategy: The second Economic Development and Poverty Reduction Strategy (EDPRS 2) outlines its overarching goal of growth acceleration and poverty reduction 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 remarkable 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 8% per annum.

    Development Challenges

    Going forward, the private sector will have to play a bigger role in ensuring economic growth. Poor infrastructure and a lack of access to electricity are some of the major constraints to private investment. Investment relies heavily on foreign aid, with stable inflows critical to keep the current investment rate high at about 25% of GDP. Reducing the country’s dependency on foreign aid through domestic resource mobilization and promoting domestic savings is viewed as critical.  

    Social Context

    Rwanda met most of the Millennium Development Goals (MDGs) by the end of 2015. 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 fell from 0.49 to 0.45.

    Last Updated: Nov 06, 2017

  • 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 second EDPRS (see Overview) and on its proposed Division of Labor among Development Partners.The World Bank Group's portfolio in Rwanda currently includes 12 national projects with a net commitment of $944 million. Rwanda also participates in six regional projects worth a national commitment of $204 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 of its political risk insurance product lines, including transfer restriction, expropriation, breach of contract, war, civil disturbance, and the non-honoring of sovereign obligations.

    Last Updated: Nov 06, 2017

  • 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); Land Husbandry, Water Harvesting and Hillside Irrigation ($69 million); and the Third Support to the Rwanda Social Protection System ($70 million).

    Moving Towards Market-Oriented Agriculture

    Through a three-phased Adaptable Program Loan (APL), the WBG supports The Rural Sector Support Project (RSSP), which focused on intensifying production in the marshlands, followed by the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) project in 2010. This aims to increase productivity on hillsides and develop parts of these hillsides for irrigated horticulture. Since the beginning of these operations, over 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 2012. Maize yields have improved from 1.6 tons/ha to nearly 5 tons/ha; while rice yields have improved from 3 tons/ha to 6.30 tons/ha; and potato yields have improved from 7 tons/ha to nearly 20 tons/ha. In addition, a number of 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 346,394 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 is taking the lead and supporting the country’s electricity access rollout program with the ongoing Electricity Access Scale-up and Sector-wide Approach Project (EASSA) ($130 million). It has supported the government’s efforts to increase national access to the electricity grid from about 6% in 2009 to more than 24.3% by December 2016 . The electrification program has extended working hours and reduced spoilage of fresh products through the availability of refrigeration and cooling. “This region of Kayonza had challenges of imminent electricity blackouts and this would impact clientele. People could only shop during the daytime and early evening hours. It is only after the electricity rollout project had improved the electricity that we decided to open shop here,” said Jean de Dieu Uwilingiyimana.

    The $95 million Rwanda Electricity Sector Strengthening project is expected to provide 325,000 new connections by 2022. The challenge now is to increase the capacity of electric generators and reduce the cost of the generation mix. Rwanda has the highest tariff in the East African Community, of about $0.25/kWh. This is largely due to a heavy reliance on high-cost diesel generation, which constitutes about 45% of the generation mix. WBG active operations in the generation sector include: (i) the 80MW Regional Rusumo Hydroelectric project ($340 million); and (ii) a MIGA guarantee ($95.4 million) Kivuwatt 25MW gas to power project. The project will initially add a 25MW generation capacity, and an additional 75MW at a later stage.

    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 over 200,000 households, with more than a million beneficiaries, assuming an average household size of 6 in the poorest quintiles (EICV4).   

    Last Updated: Nov 06, 2017

  • Many ongoing projects supported by the World Bank have mobilized support from other development partners for projects that include the Electricity Access Project (Nordic Development Fund, OPEC Fund for International Development, Netherlands), the Second Emergency Demobilization and Reintegration Project (Sweden, Germany, Netherlands), and the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) Project (USAID, Canada, GAFSP).

    Last Updated: Nov 06, 2017

Api


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
Kigali, Rwanda
Rogers Kayihura
Communications Officer
+250-591-3303
rkayihura@worldbank.org
Washington
Trichur K. Balakrishnan
Country Program Coordinator
1818 H Street NW
Washington DC 20433
rkayihura@worldbank.org