26 June 2014

Rwanda: Renewed WB Support to Boost EDPRS II Agenda

Rwanda could be a step closer to achieving its second Economic Development and Poverty Reduction Strategy following renewed commitment by the World Bank to scale up its support for the next four years.

The commitment could see the country receive between $200 million (about Rwf135 billion) and $250 million (about Rwf170 billion) extra funding per year to support priority areas in driving the country's economic growth.

This could bring the total resource envelope from World Bank to Rwanda to more than $700 million per year over the next four years, up from about $500 million in 2013.

According to the new Country Partnership Strategy (CPS) 2014/2018, launched yesterday in Kigali, agriculture, energy, urbanisation, regional integration projects, rural development and social protection, infrastructure and accountable and programmes geared towards promoting accountable governance will be top priority.

Another $120 million from the International Finance Corporation (IFC) and $10 million from the Multilateral Investment Guarantee agency will be on standby to support priority areas.

Viable cause:

The strategy sets out how combined World Bank resources will best be used to help Rwanda achieve its poverty reduction and shared investments programmes.

Caroly Turk, the World Bank Group country manager, said the new partnership could perhaps attract slightly more resources compared to the past.

"The International development Association might commit about $200- 250 million per year across priority areas as enshrined in the second Economic Development and Poverty Reduction Strategy (EDPRS II)," Turk said.

"At the heart of the strategy lies the premise that the growth and other development dividends of the post conflict period have been skillfully harnessed and that transformation of the economy is underway."

He said as Rwanda seeks to make a shift in its growth trajectory that is private sector-led, it was important that development partners support the cause.

A team at the World Bank is currently considering the viability of a programme that would drive results in public financial management, fiscal decentralisation capacity and open data.

The proposed strategy optimises resources of the World Bank.

It will help boost accountability through public financial management and decentralisation, thus driving sustainable economic development and poverty reduction, Turk said.

"Given the pace of change Rwanda is experiencing, it's important that, as World Bank Group, we align our support to the country's EDPRS II agenda. Our priority is to generate sustainable development for poor people in Rwanda," Igance Bacyaha, IFC country director, said.

Diarietou Gaye, the World Bank Group regional director for Rwanda, Kenya and Eritrea, said Rwanda needs to boost the incomes of the poorest to maintain the gains in poverty reduction and oversee social and institutional transition that come with rapid economic change.

Finance and Economic Planning minister Claver Gatete said the partnership was timely and important for the country to achieve its economic goals.

"It's important the Group is forming this new partnership strategy and reforming the way they have been delivering support to us to come together and support key priority areas. This will not only boost the private sector, but also accelerate economic growth," he said.

Strategic options:

According to the strategy, both the World Bank and IFC will engage in policy and analytical work in private sector development, leveraging of public-private sector partnerships and investment climate.

There will be additional investments for specific vulnerable groups, including ex-combatants and victims of gender-based violence.

This could help improve productivity and incomes of the poor through rural development and social protection programmes, according to Jack Odari, a lecturer at Mount Kenya University, Kigali.

The Group maintains that stepping up measures to make agriculture more climate-resilient while supporting the private sector by creating a better business environment remains a priority.

The new partnership also seeks to mitigate the risks on the regional projects and the exposure to fluctuations in aid flows through choice of instruments and aid dependence.

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