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Rwanda + 1 more

Operational Plan 2011-2016 DFID Rwanda Updated December 2014

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Context

By 2020 Rwanda aims to complete its transformation from a poor, post-conflict nation to a thriving, middle income, regional trade and investment hub. But Rwanda’s progress will stall without transformative changes that: create wealth and investment and invigorate the private sector, improve basic services, increase the accountability of the state to its people, and address potential causes of conflict and fragility, including regional instability.

Rwanda has made remarkable progress since the Genocide of 1994. It is on track to meet many of the Millennium Development Goal targets, although a few indicators (including maternal mortality, HIV prevalence, tuberculosis deaths, and use of an improved water source) are off track. Between 2008 and 2014, Rwanda has moved 17 places up the HDI ranks to 151 out of 187. No other country has moved up as many places over this period. Poverty fell dramatically between 2005/6 and 2010/11 and Rwanda’s Gross Domestic Product per capita has increased from $207 in 2000 to $633 in 2013, driven by an average growth rate of 7.7% per year in that period. Growth has been pro-poor and inequality has reduced.

Despite this, huge challenges remain. 63% of the population live on less than $1.25 a day. 45% of Rwanda’s 10.8 million people live below Rwanda’s poverty line, and 24% live in extreme poverty, unable to afford a minimum food basket. Poverty is largely rural and is geographically concentrated and, as a result of population growth, the number of poor people has reduced only marginally. Inequality is reducing, but it is still high and it is constraining sustainable growth and poverty reduction. Girls’ attendance at primary and secondary schools exceeds that of boys, and women are well represented in government institutions (Parliament has 64% female members), but only 10% of local mayors are women. Women are more likely to be extremely poor than men and to have less access to means to raise their standard of living. Over half of ever married women have experienced sexual or physical violence.

Given low levels of international investment and a less-than-vibrant private sector it is not clear how much wealth growth will continue to deliver to a fast growing and largely unskilled population. Rwanda needs a more highly skilled workforce - and to deliver the education outcomes on which this will rely. The country is still heavily dependent on foreign aid (31% of the 2014/15 budget) – the majority from seven donors (World Bank, European Union, African Development Bank, US, Germany, Belgium and the UK). In an economy where 72.6% of the population (and 84% of women) relies on agriculture for a living, sustainably increasing agricultural productivity is the first step needed for Rwanda to develop, and buffer the effects of future food price rises.

But Rwanda’s strong reliance on rain-fed agriculture makes it highly vulnerable to climate change. Existing climate variability is already affecting economic growth and future climate variability is likely to present additional challenges: threatening food security, health, export earnings and causing damage to infrastructure. In addition, Rwanda remains vulnerable to rising global oil prices due to the high importation of energy products. As a landlocked country and small economy, Rwanda recognises the critical need to further promote regional trade and integration in the East African Community, on which its economic growth depends.

Rwanda uses development finance very well, both in terms of results achieved and accountability for its use. Transparency International judges Rwanda among Africa’s least corrupt countries, while the 2010 Public Expenditure and Financial Accountability assessment documents an impressive and fast-improving public financial management system.

But the relative progress on development indicators co-exists with constraints on political rights and freedom of expression. And the long term stability of the Great Lakes region remains in question, with Rwanda having previously been involved in recurring bouts of conflict in eastern DRC. The constraints on rights and freedoms are to some degree understandable given Rwanda’s post-genocide context. But there is mounting concern that power is overly centralised, with unpredictable consequences for long term political stability, economic development and human rights. President Kagame is due to stand down at the conclusion of his constitutional mandate in 2017.

During this five year period the levels of UK aid to Rwanda, the way it is delivered, DFID’s influence with other donors, and the UK’s ability to raise and resolve issues of concern with the government, will be of high importance to both the Government of Rwanda and other donor partners.