rwanda and the istanbul programme of action for the least ... · pdf filethe 2000 millennium...

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Istanbul Programme of Action for LDCs Rwanda Mid Term Review Report

RwandaandtheIstanbulProgrammeofActionfortheLeast

DevelopedCountries(LDCs):2011-2020

RwandaMid-termreviewreport

May,2016

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Contents ....................................4I. ChapterOne:BackgroundtotheIstanbulProgrammeofAction(IPOA)

1.1. BackgroundtotheIstanbulProgrammeofAction(IPoA)....................................................4

1.2. OverallGoal,ObjectivesandPrinciplesoftheIPoA.............................................................4

GuidingPrinciples..........................................................................................................................6

1.3. ThemesandPriorityAreasofAction....................................................................................6

1.4. TheIPoAInclusionandGraduationCriteria.........................................................................8

1.4.1InclusionCriteria...................................................................................................................8

1.4.2GraduationCriteria...............................................................................................................8

1.5. RationalefortheMid-TermReview......................................................................................9

..............................................................................11II. Chapter2:StatusofRwanda’sPerformance

2.1 RwandaToday.....................................................................................................................13

StructureofRwanda’sPopulation..............................................................................................13

Rwanda’sEconomicPerformance...............................................................................................13

TotalenergyproductioninKwh..................................................................................................15

2.2 StatusofRwanda’sPerformance........................................................................................16

2.2.1TheIncomecriterion..........................................................................................................16

2.2.2HumanAssetsIndex(HAI)..................................................................................................19

2.2.3EconomicVulnerabilityIndex(EVI)....................................................................................23

............................................................28III. Chapter3AlignmenttoNationalPlanningProcesses

.........................................................................30IV. Chapter4:KeysDriversofRwanda’sSuccess

VI.1Visionaryandcompetentleadership;......................................................................................30

VI.2RwandaWorkingTogether,“UmRwanda”..............................................................................30

VI.3Rwanda’sContinuousPolicyInnovationandHomeGrownInitiatives..................................31

VI.4Rwanda’seffortstomitigateitslandlockedstatus:regionalintegration..............................31

a. Regionalintegration................................................................................................................31

b. InnovationanduseofICTinTrade.........................................................................................31

c. Infrastructure...........................................................................................................................32

.........................................32V. Chapter5:Conclusionandpolicyperspectiveandthewayforward

i. Inconclusion............................................................................................................................32

ii. ContinuingChallengesandPolicyperspective.......................................................................33

iii. Thewayforward..................................................................................................................33

Goingforward:Jobcreation........................................................................................................33

Goingforward:Malnutrition.......................................................................................................34

Goingforward:Povertyreductioningeneral.............................................................................34

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....36VI. Annex:RwandaperformanceagainsttheIstanbulplanofactiontargetsandindicators

1.6. ProductiveCapacity.............................................................................................................36

1.7. Agricultureandfoodsecurity..............................................................................................37

1.8. Tradeandcommodities.......................................................................................................37

1.9. Financialresourcesmobilisationfordevelopment............................................................38

1.10. HumanDevelopment(Education)...................................................................................38

1.11. HumanDevelopment(Health)........................................................................................39

1.12. HumanDevelopment(Youth).........................................................................................40

1.13. HumanDevelopment(Gender).......................................................................................40

1.14. HumanDevelopment(Shelter,Water&Sanitation)......................................................41

1.15. HumanDevelopment(Lifeexpectancy)..........................................................................41

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I. ChapterOne:BackgroundtotheIstanbulProgrammeofAction(IPOA)

1.1. BackgroundtotheIstanbulProgrammeofAction(IPoA)

The2000MillenniumDeclaration thatushered in theMDGswasabroad framework that

stipulated roles of both developed and developing countries in fast tracking the

achievementof targetsunder thesegoals.Thiswouldrequirenationalcommitmentanda

Programme of Action against which countries were expected to align their planning and

budgetaryprocesses.

The Brussels Programme of Action BPoA (2001-2010) was hence put in place based on

analytical work done by the Office of the High Representative for Least Developing

CountriesandSmall IslandDevelopingStates (OHRLLS) toachieve thispurpose.TheBPoA

wasaframeworkforpartnershiptoensurethatcountriesmetkeyseven(7)commitments:

fostering a framework for people-centered policy; good governance; building human and

institutionalcapabilities,ensuring thatglobalizationworks forLDCsbybuildingproductive

capacities; enhancing the role of trade in development; reducing vulnerability and

protectingtheenvironmentaswellasmobilizingfinancialresources.

After a seriesof reviewsof reportson the implementationof theBPoA in January2010,

OHRLLS,underanAsiaPacificReviewandanAfricaRegionalReview,setupaprocessthat

culminated in the Istanbul Programme of Action IPoA (2010-2020) which succeeded the

BPoA.TheIPoAbuildsontheBPoAbutinadditionhassetupathree-tiergraduationprocess

whereLDCsthatmetadefinedcriteriaofperformancewouldeventuallygraduatefromthe

LDCstatustomediumincomecountrystatusby2020.Itprovidestheneededpressurethat

is now exerted on LDCs to align their plans towards a path of structural transformation

throughmeetingkeyhumanandeconomicdevelopmenttargets.Italsoservesasareward

mechanismforgoodperformingcountries.

1.2. OverallGoal,ObjectivesandPrinciplesoftheIPoA

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Theoverall goalof the IPoA is to “overcome the structural challenges facedby the least

developed countries in order to eradicate poverty, achieve internationally agreed

developmentgoalsandenablegraduationfromtheLDCcategoryby2020”.

ThespecificobjectivesoftheIPoAaretailoredtosupportcountriesbothdevelopedand(at

leasthalf)ofleastdevelopedtograduatefromtheLDCcategoryby2020.Theseobjectives

includethefollowing:

i. Toachievesustained,equitableandinclusiveeconomicgrowthinleastdeveloped

countries, to at least the level of 7 per cent per annum, by strengthening their

productive capacity in all sectors through structural transformation and to

overcomingtheirmarginalizationthroughtheireffective integration intotheglobal

economy,includingthroughregionalintegration;

ii. To build human capacities by fostering sustained, equitable and inclusive human

andsocialdevelopment,genderequalityandtheempowermentofwomen;

iii. To reduce the vulnerability to shocks of least developed countries to economic,

natural and environmental shocks and disasters, as well as climate change, and

enhancetheirabilitytomeettheseandotherchallengesthroughstrengtheningtheir

resilience;

iv. Toensureenhancedfinancialresourcesandtheireffectiveuseforleastdeveloped

countries’ development, including through domestic resource mobilization, ODA,

externaldebtrelief,foreigndirectinvestmentandremittances;and

v. Toenhancegoodgovernanceatall levels,bystrengtheningdemocraticprocesses,

institutionsand the ruleof law; increasingefficiency, coherence, transparencyand

participation;protectingandpromotinghumanrights;andreducingcorruption,and

strengthen leastdevelopedcountrygovernments’capacitytoplayaneffectiverole

intheireconomicandsocialdevelopment.

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GuidingPrinciplesInadditiontotheabovegoalsandobjectivestheIPoAspellskeyguidingprinciplesthatwere

basedonbuildingasustainabledevelopmentpartnershipwheredevelopedanddeveloping

countries worked together in a manner that fast tracks attainment of both the above

objectivesandtherealizationoftheoverallgoal.Theseprinciplesinclude:

i. Ensuringcountryownershipandleadership;

ii. An integrated approach that promotes policy coherence and consistencywith

internationaleconomic,financialandtradingsystems;

iii. Promotinggenuinepartnershipandsolidaritywithenhancedglobalsupportand

mechanismsatalllevelsfortheachievementoftheIPoAgoalsandobjectives;

iv. FocusingonaResultorientationwheremonitoringandassessmentofprogress

undertheIPoAcontributetoenhancingmutualaccountabilityandeffectiveness

ofdevelopmentcooperation;

v. Ensuringpeaceand security, development andhuman rights, as pillars of the

UnitedNationssystemandthefoundationforcollectivesecurityandwell-being;

vi. EnsuringEquityatalllevelsforattainingthepursuitoflong-termprosperity;

vii. Supporting voice and representation through an international system that

supportsinclusivegrowthandeffectiveparticipationforallandatalllevels;

viii. Balancing the role of the state and market considerations, where every

Governmentcommitstodesignpoliciesandinstitutionswithaviewtoachieving

sustainableandinclusiveeconomicgrowththattranslatesintofullemployment,

decentworkopportunitiesandsustainabledevelopment.

1.3. ThemesandPriorityAreasofActionThereareeight(8)themesunderthisprotocolthatarepriorityareasofaction.Overall,LDCs

areexpected tomakeprogress in areas that are critical for structural transformationand

the productive capacity such as in science, technology and innovation, and investment

promotion.

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Secondly the LDCs are expected to align their national planning processes and ensure

incorporation of the goals and prioritization of the IPoA, including strategies to achieve

graduation out of the LDC category by or around 2020. LDCswould then implement key

strategiesput inplacetomeetthegraduationcriteriabasedontheeightpriorityareasof

theIPoA.Theseincludethefollowing:

i. Increasingtheproductivecapacityinkeysectors:infrastructure;energy;science,

technologyandinnovationandprivatesectordevelopment;

ii. Supportingagriculture,foodsecurityandruraldevelopment;

iii. Enhancing trade; with an emphasis on integrating trade and trade capacity

building policies into national development strategies; improving productivity

and competitiveness, diversification of production bases and export products

and markets to non-traditional destinations as well as increasing the

transparencyofinstitutionstobetterfacilitatetradeandimprovestandards;

iv. Focusing on key commodities through establishing and strengthening (as

appropriate)thenationalcommoditymanagementstrategiesandsectorspecific

policiesandmeasurestoenhanceproductivityaswellasverticaldiversification

andensurevalueadditionandvalueretention;

v. Investing in human and social development with a focus on education and

training;populationandprimaryhealth;youthdevelopment;shelter;waterand

sanitation;genderequalityandempowermentofwomen;socialprotection;

vi. Putting in place amechanism to addressmultiple crises and other emerging

challenges: economic shocks; climate change and environmental sustainability;

disasterriskreduction;

vii. Mobilizingfinancialresources fordevelopmentandcapacity-building:domestic

resource mobilization; official development assistance; external debt; foreign

directinvestmentandremittances;and

viii. Ensuringgoodgovernanceatalllevelsincludingfosteringajust,transparentand

awell-functioninggovernmentaccountabletothepeopleandonethatpromotes

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accesstoanindependentjudicialsystem;andensuresanenvironmentconducive

tosocialeconomicdevelopment.

Regarding Rwanda it was to ensure that under the post-2015 Development Agenda and

other global processes efforts are made to link the IPoA and Rwanda’s overarching

development strategy,with a view to determining how this linkagewill lead to inclusive

development,andultimatelygraduationby2020.

1.4. TheIPoAInclusionandGraduationCriteria1.4.1InclusionCriteriaThespecificprocessesundertheinclusioncriteriaincludethefollowing:

i. Acceptance to be Categorized: Interested governments formally participate in

thisprocessofcategorizationandtheUNSecretariatofDepartmentofEconomic

andSocialAffairs(DESA)thennotifiesthecountryoftheeligibilityfinding.

ii. TheCommittee forDevelopmentPolicy (CDP)which isasubsidiarybodyof the

UnitedNationsEconomicandSocialCouncilthenreviewsthestatusofeachLDC

for the purpose of monitoring their progress and eventual graduation and

submitsinclusionrecommendationtotheEconomicandSocialCouncilofUnited

Nations(ECOSOC).

iii. ECOSOCendorsestherecommendationbytheCDP

iv. TheCountrythennotifiestheUNSecretaryGeneralonitsacceptance

v. The General Assembly takes note of this formal submission and notes the

ECOSOCrecommendationand

vi. Inclusionthentakesimmediateeffect

1.4.2GraduationCriteriaGraduationfromLDCstatusisreachedbasedonathree-foldassessmentcriteria:

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i. GrossNationalIncomebasedonathree-yearaverageestimateofGNIpercapita

fortheperiod2011-2013usingtheWorldBankAtlasmethod(under$1,035for

inclusion,above$1,242forgraduationasappliedinthe2015triennialreview).

ii. Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of

populationundernourished;(b)health:mortalityrateforchildrenagedfiveyears

or under; (c) education: gross secondary school enrolment ratio; and (d) adult

literacyrate.

iii. EconomicVulnerabilityIndex(EVI)basedonindicatorsof:(a)populationsize;(b)

remoteness; (c) merchandise export concentration; (d) share of agriculture,

forestryand fisheries; (e) shareofpopulation in lowelevatedcoastal zones; (f)

instability of exports; (g) victims of natural disasters; and (h) instability of

agriculturalproduction.

1.5. RationalefortheMid-TermReview

Undertakingamid-termreviewoftheIPoAispartofthefulfilmentsoftheimplementation

of this international commitment. Themid-term review provides information on how far

Rwandahas progressed since 2010when the IPoA came into effect and the likelihoodof

graduation out of the LDC category by 2020. This presents aspects where greater

improvementsarerequiredagainstthethree-tiergraduationcriteriaasaguidetoplanning

and budgeting framework both at the sector levels and more broadly under the NDP

process.Themid-termreviewalsopresentschallengesaswellasopportunitiesthatRwanda

can leverage toenhance itsperformanceundereachof theeight (8)priorityareasof the

IPoA.ThisreportalsomakesrecommendationsforRwanda’spost2015agendatofast-track

theattainmentofresultstomeetthegraduationcriteriaoutoftheLDCcategoryby2020.

WhyGraduationoutoftheLDCCategoryisimportantforRwandaRwanda’sVision2020envisagesthatRwandawouldhavegraduatedfromlowincometoa

middle income country by 2020 after reaching a GDP per capita of US dollars 1,240.

ParticipatinginprocessesliketheIPoApresentsRwandawithanopportunitytofocuspublic

investmentswhereitneedstoimprove.Already,thisreviewhasshownthatmoreneedsto

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be done to improve aspects like nutrition, and export diversification and value addition.

GraduationoutoftheLDCcategorywouldcompletethefirstphaseoftransitioningfromthe

focusonpovertyreductiontodevelopmentwhichisthecriticaltorealizingvision2020.

FACTNOTE:Botswana,CapeVerde,MaldivesandSamoagraduatedoutoftheLDCCategoryunderIPoAin2015.Underthe2018review,Bhutan,SaoTomeandPrinciple,SolomonIslands,Timor-LesteandNepalareoncoursetograduate

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II. Chapter2:StatusofRwanda’sPerformance

Since theyear2000,Rwandahasbeenexperiencingoneof themostexcitingand fastest

periods of growth and socio- economic progress in its history. Rwanda enjoyed a perfect

developmental"hattrick"ofsustainedeconomicgrowth,povertyreductionandareduction

inincomeinequality:Averageannualeconomicgrowthaveragedmorethan8%duringthe

period2001–2014,theheadcountpovertyandextremepovertyratiosfellby19.8and23.7

percentage points respectively, taking 1.65 million people out of poverty, and income

inequality declined. In short, Rwanda has been “on the move”, and has provided real

improvementsinlivingstandardsforitspopulation.

TheSecondEconomicDevelopmentandPovertyReductionStrategy(EDPRS2)isafiveyear

plan designed to accelerate the progress already achieved and to shape the country’s

developmentinthefuture.

ItwasbuiltonthepoliciesfromEDPRS1whichhavebeeneffectiveinacceleratinggrowth,

creatingemploymentandgeneratingexports.Inaddition,EDPRS2innovateddeterminedly

to strengthen policy and strategy approaches and to ensure continuing achievement by

moreengagementoftheprivatesector.

The overarching goal for EDPRS2, derived from Vision’s long- term goal of “creating a

productivemiddleclassandfosteringentrepreneurship”is“Acceleratingprogresstomiddle

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incomestatusandbetterqualityoflifeforallRwandansthroughsustainedgrowthof11.5%

andacceleratedreductionofpovertytolessthan30%ofthepopulation”

Rwanda’seconomyhasbeengrowingsteadilyatabout8%since2001withGDPpercapita

morethantriplingfromUS$211in2001toUS$720in2015.Foodcropproductiongrowth

wasmorethantwicethatofpopulationgrowthbetween2007and2014.

Overtheperiod2011–2014businessestablishmentsinRwandaincreasedby24.4%mainly

in rural areas. In rural areas the increase was 38.1% compared to 7.3% in urban areas.

During the same period, 34.5% new jobswere created by the businesses, 47.9% in rural

areascomparedto22.4%inurbanareas.

Education outcomes between 2011 and 2014 are also improving with net attendance in

secondaryeducation increasing from17.8%to23%andthat for tertiaryeducationalmost

doubles from 1.7% to 3%. As a result literacy has also improved from 74.9% to 77.8%.

However,netattendanceinprimaryeducationdroppedslightlyto87.9%.

Both fertility and dependency are dropping; with nutrition indicators among children

improving;overallstuntingdroppedfrom44.2%to37.9%between2010and2014/15while

thatforthepoorestquintileimprovedalsodroppingfrom54%to48.6%.

Housingconditionsarealsoimproving.Householdswithmetalsheetroofingincreasedfrom

54.4%to61.1%.Accesstoelectricityalmostdoubledduringthesameperiodtoabout20%.

Waterandsanitationimprovedaswellwithhouseholdsusingimprovedsanitation(toilets)

increasingfrom74.5%in2011to83.4%in2014;whileduringthesameperiodhouseholds

withaccesstoimprovedsourcesofdrinkingwaterincreasedfrom74.2%to84.8%.

Householdassetsforexampleownershipofmobilephonesincreasedfrom45.2%in2011to

63.6%in2014.Forthepoorestquintile(bottom20%),ownershipofmobilephonesdoubled

duringthesameperiodfrom17.6%to36.4%.

Followingtheabovecontext,weseesystematicimprovementsatmacrolevelforthewhole

countrybothsince2001andintherecentpastsince2011whenpovertywaslastmeasured.

Wearealsoseeingsimilarandinsomecasesfasterimprovementsinruralareas,amongthe

poorestquintiles(bottom20%)ofthepopulationandsmallbusinesses.

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Finally,povertyhasreducedfrom44.9%in2011to39.1%in2014andextremepovertyfrom

24.1% to 16.3%. This follows similar reduction between 2006 and 2011 where poverty

droppedfrom56.7%to44.9%andExtremepovertyfrom35.8%to24.1%.

InequalityreducedaswellwithboththeGinicoefficientdroppingfrom0.49in2011to0.45

in2014andtheratioofthewealthiest10%tothepoorest10%droppingfrom6.36to6.01

duringthesameperiod.

2.1 RwandaToday

StructureofRwanda’sPopulation

Withapopulationof11.3millionpeopleandonethathasrisenby11%since2011,Rwanda

isoneof the fastestgrowingpopulationcountries in theworldwithanannualpopulation

growthrateof2.4%perannumin2015andoneofthehighestpopulationdensities,witha

density of 434 people/km2. Most of Rwanda’s population 73% is primarily engaged in

agricultureandnearly84%ofitresidesintheruralareas.

Rwanda’sEconomicPerformance

Rwandahasmaintainedstrongeconomicperformanceoverthelasttwodecadesaveraging

8.0%perannumabovesub-SaharanAfricaaverage.In2015theGDPperhead(incurrentUS

dollars) is estimated at 720 from627 in 2011which is an increaseof 14.8 percent. From

2014 to2015TheGDPper capita stagnated from719 to720 currentUSdollars (only0.1

percentincrease!).

In2015,GDPat currentmarketpriceswasestimated tobeRwf5,837billion (8.1 current

US$billion).TheServicessectorcontributed47percentofGDPwhiletheagriculturesector

contributed33percentoftheGDP.Theindustrysectorcontributed14percentofGDP,and

6percentwasattributedtoadjustmentfortaxeslesssubsidiesonproducts.

Graph1:sectorialcontributiontotheGDP

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Source:NationalInstituteofStatisticsofRwanda,March2016

The economy of Rwanda structural weaknesses persists as it remains a subsistence

agriculture led economy: food corps (producing for eating) is by far themain sub sector

accounting for 23% of the total GDP weighing the double of the second important sub

sectorwhich iswholesale and retail tradewith 12%.Construction is thirdwith 7%of the

totalGDP. Themanufacturing sector is insignificant and accounts for only 5%. It isworth

noting that exports crops accounts for only 2%, mining and quarrying only 1%, financial

services3%and transport services3%.Themain foreigncurrencyearnersareagricultural

exports(coffeeandtea)andminerals.

ThetablebelowisasynopsisofkeyfactsandfiguresonRwanda’sdevelopmenttrends.

Table2:RwandaFactsandfigures

Agriculture33%

Industry14%

Services47%

Adjustments6%

SectorialcontribuiontoGDPin2015

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Baseline Currentstatusprojection

2020

Totalpopulation(millions) 10.2million(2011) 11.3million(2015)12.6

millionPopulationGrowthrate 2.6%(2011) 2.4%(2015) PopulationbelowPovertyline 44.9%(2011) 39.1%(2014) 20.0%PopulationbelowExtremePovertyline 24.1%(2011) 16.3%(2014) 0.0%Lifeexpectancy(years) 64.0(2012) 66.7(2015) Maternalmortalityrate(deathsper100,000births) 487per100,000(2010)

210per100,000(2015)

Infantmortalityrate(deathsper1,000livebirths) 50per1000(2010) 32per1000(2015) HIV/AIDSprevalence 3.0%(2011) 3.0%(2015) Currentaccountbalanceas%ofGDP 7.3%(2011) 13.5%(2015) inflation 5.7%(2011) 2.5%(2015) ODAtoGDPratio 11.5%(2011) 11.8%(2015) Percentageofhouseholdswithaccesstointernet 7.0%(2011) 33.5%(2015) cellularsubscribers 41.5%(2011) 78.2%(2015)

Source:NISRStatisticalyearbook2015TotalenergyproductioninKwh

2010 2011 2012 2013 2014276,079,191

345,496,093

392,984,907

413,141,377

476,142,374

additionalkwh

69,416,902

47,488,814

20,156,470

63,000,997

%increase 25% 14% 5% 15%Source:RURA

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From2011to2014theproductionofelectricityinRwandahasgreatlyimproved:additional

130,646,281Kwhwereproducedwhichis38%increase.

2.2 StatusofRwanda’sPerformanceThe Objective of Rwanda’s participation in the IPoA process is to graduate from LDC to

lowerMediumIncomeCountrystatusinlinewiththeVision2020.Thissectionpresentsan

assessment of the status of Rwanda’s performance against the UN’s graduation criteria:

Income;theHumanAssetsIndexandtheEconomicVulnerabilityIndexcriteria

2.2.1TheIncomecriterion

Rwanda’sGDPgrew(atcurrentmarketprices)fromUS$6.4billionin2011toanestimated

US$8.1 in 2015 (NISR, 2015). The average GDP growth rate from 2011 to 2015 is 7.04

percent.Rwanda’seconomicgrowthrecordoverthelastdecadehasbeenwellabovethat

ofitsregionalpeers,especiallytheEastAfricanmemberstates.

276,079,191

345,496,093

392,984,907413,141,377

476,142,374

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

450,000,000

500,000,000

2010 2011 2012 2013 2014

Energyproduclon

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Figure1:OverallGDPPerformance 2010 2011 2012 2013 2014 2015 variation

from2011to2015

GDPatcurrentprices(Rwfbillions) 3,323 3,846 4,435 4,864 5,395 5,837 52%GDPatcurrentprices(currentUS$)

5.7

6.4 7.2

7.5

7.9

8.1 26%

GDPGrowthrate 7.3% 7.8% 8.8% 4.7% 7.0% 6.9% 7% GDPperhead(in'000Rwf) 333 376 423 453 491 518 38%GDPperhead(incurrentUSdollars) 572 627 689 701 719 720 15% ProportionsofGDP Grosscapitalformation 23% 24% 26% 27% 26% 26% Valueaddedby Agriculture 33% 32% 33% 33% 33% 33% Industry 13% 14% 14% 15% 14% 14% Services 48% 47% 47% 47% 47% 47%

GrossNationalSaving 16% 18% 12% 16% 13% 12% LessGrosscapitalformation -23% -24% -26% -27% -26% -26% Exportsf.o.b. 297.3 464.2 590.8 703.0 723.1 683.7 47%Importsf.o.b. 1,084.0 1,565.8 1,859.0 1,851.5 1,990.2 1,917.4 22%Privatetransfersnet 90.7 133.3 183.0 181.4 179.9 152.2 14%Remittancesfromdiaspora(net) 65.1 110.2 118.3 114.8 119.5 104.1 -5%Privatetransfersforchurchesandassociations 25.6 23.1 64.7 66.5 60.4 48.1 108%officialtransfers 490.1 664.5 449.1 559.6 398.1 370.1 -44%Directinvestment 250.5 119.1 255.0 257.6 311.0 319.8 168%Source:NISRandBNRdata

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Official per capita income figures for Rwanda are presently derived based on Gross

Domestic Product (GDP) as opposed toGrossNational Index (GNI) as required under the

IPoAassessment.Thedifference isthatwhileGDPpercapitameasuresnationaloutputor

expenditureperyearpernational;GNIpercapitameasurethissamelevelofoutputbyonly

residentsofthatcountry(plusanyproducttaxes,andnetreceiptsofprimaryincomefrom

abroad).

Rwanda’sGDPpercapitain2014wasUS$719comparedtoaGNIpercapitaof$700.GDP

percapitalin2015onlyslightlyincreasedtoUS$720.

The IPoA incomecriterion takes theaverageofa country’sGNIper capitaover the latest

three-yearperiodbasedontheWorldBankAtlasmethod(under$1,035forinclusion,above

$1,242forgraduationasappliedinthe2015triennialreview).Accordingtotheestimateof

theUN under IPoA criteria, Rwanda’sGNI average of the latest three years stands atUS

$670abouthalfofthethresholdforgraduation(US$1,242).

Table3:GNIPerCapitaTrendsinRwanda

IndicatorName 2010 2011 2012 2013 2014

IPoAGraduationThreshold

GDPpercapitacurrentUS$ 572 627 689 701 719

GNIpercapita,Atlasmethod(currentUS$) 550 590

640

670

700

$1,242

Source: World Bank Atlas http://data.worldbank.org/country/Rwanda May,17, 2016 andNISR

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2.2.2HumanAssetsIndex(HAI)Thesecondgraduationcriterion isbasedonfivehumandevelopmentoutcome indicators:

nutritionwhere reporting ismade against the percentage of population undernourished;

health with a focus on mortality rate for children aged under five years and education

focusingonthegrosssecondaryschoolenrolmentratioandadultliteracyrate.

ANutritionNutrition continues to be a public health concern in Rwanda. However, there is a strong

commitmentfromthegovernment,togetherwithitsdevelopmentpartnersandeducational

institutions,tofindsolutions.

Under the leadership of the government of Rwanda, multisectoral initiatives and

interventions have been put into place over the past decade aimed at improving of the

nation’s nutritional status. These efforts include the Presidential Initiative that inspired

nationwideemergencyactiontofindandmanageallcasesofacutemalnutritioninchildren

(2009).ManyOther efforts have been conducted and Rwandamet theMDGs targets on

malnutrition.

Indicator 2000/01 2005/6 2010/11 2014/15 MDG

TargetStatus

1.3Prevalenceofunderweightchildrenunderfiveyearsofage

24.3 18 11.4 9 14.5

1.4Proportionofpopulationbelowminimumlevelofdietaryenergyconsumption

40 35.8 24.1 16.3 20.7

Childmalnutrition(%ofunderfivechildrenstunted)

42.6 51 44.2 38 24.5

Childmalnutrition(%ofunderfivechildrenwasted)

5 2.8 2 2

Childmalnutrition(%ofunderfivechildrenunderweight)

24.3 18 11.4 9 14.5

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B:Under5ChildMortalityRate

Rwanda has achieved significant progress in reducing under-5 child mortality rate with

deathper1,000childrenreducingby67%inadecade,between2005/2006to2014/15from

152per1,000to50per1,000 in2014/15(RwandaDHS,2015)andreducedby34%since

2010/2011. The Health insurance program impacted a lot in reducing Under 5 Child

MortalityRate.

RwandahasachieveditshealthrelatedMDGtargets.

Indicator 2000 2005/6 2010/11 2014/15 MDG

TargetStatus

4.1Under-fivemortalityrate(per1000births)

196.2 152 76 50 47

4.2Infantmortalityrate(per1000births)

107 86 50 32 28

4.3Proportionof1year-oldchildrenimmunisedagainstmeasles

87 85.6 95 95.2 100

%ofchildren12-23monthsfullyvaccinated

76 75.2 90.1 93 100

196.2

152

76

50 47

0

50

100

150

200

250

2000 2005/6 2010/11 2014/15 MDGTarget

Under-fivemortalityrate(per1000births)

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C:EducationIndicator 2000 2005/6 2010/11 2014/15 MDG

TargetStatus

2.1Netenrolmentratioinprimaryeducation

72.6 86.6 91.7 96.6 100

2.2Proportionofpupilsstartinggrade1whoreachlastgradeofprimaryschool

24.1 51.7 78.6 61.3 100

2.3Literacyrateofwomenandmenaged15-24(datadisaggregatedbysex)

48/48

76.8/76.9

84.7/82.5

87.5/84.9

100

2008 2009 2010 2011 2012 2013 2014GrossEnrolmentrateinSecondary(In%)

Boys 22 26.8 31.5 34.9 37 40.3 39.3Girls 23.4 25 31.5 36.2 40 42.5 42.1

total 20.7 25.9 31.5 35.5 38 41.5 40.7RwandahasachievedallitsMDGtargetsrelatedtoeducationandconcerningthesecondary

educationGrossEnrolmentrateitevolvefrom20.7%in2008;35.5%in2011toreach40.7

percentin2014.Surprisingly,thegirlsenrolmentrateishighertheboysone.

Table4:Performanceofthesectormid-waythroughNDP1OutcomeIndicator 2010 2011 2012 2013 2014NetEnrolmentratePrimary(%) 95.4 95.9 96.5 96.6 96.8NetCompletionratePrimary(%) 75.6 78.6 72.7 69 61.3NetEnrolmentratesecondary(%) 22.6 25.7 28 36.4 35.7

Vocationaleducationstudents’

7,314

11,315

13,577

15,592

21,566

Adultliteracy

Women(%) 80.2

Men(%) 82.4

22


AccordingtotheNISRstatistics,grosssecondaryenrolmentrationstandsat40.7%in2014.

Theotheraspectunderassessment isadult literacy.Rwandahasoneof thehighestadult

literacy inAfrica standingat80.2% forWomenand82.44% formen (2014/2015Rwanda

Demographicandhealthsurvey).

ForthisHumanAssetsIndex(HAI)Rwandahasdoneverywellandqualifiesforgraduation.

23


2.2.3EconomicVulnerabilityIndex(EVI)Thethirdsetofcriteriaunderthisassessmentistheeconomicvulnerabilityindex.Thisindex

is based on the following indicators: population size; remoteness; merchandise export

concentration; share of agriculture, forestry and fisheries; share of population in low

elevated

Coastalzones;instabilityofexportsofgoodsandservices;victimsofnaturaldisasters;and

instabilityofagriculturalproduction.Thiscriterionissplitfurtherintotwoindices:exposure

index that denotes the extent towhich countries are exposed to shocks thatmake them

susceptible to economic vulnerability and shock index that looks at trade shocks and the

likelihoodofoccurrenceofnaturaldisasters.

A.EXPOSUREINDEX

A1StructureofRwanda’sPopulation

ThelastRwandacensuswasin2012putRwanda’spopulationat10.5million.In2015that

population is11.3millionwithagrowthrateof2.4%.Thefertilityratehasdroppedfrom

6.1 in 2005 to 4.2 children perwoman in 2015. The population of Rwanda is still largely

rural,with83%livinginruralareas.

A2Remoteness

The rationale of this indicator is the linkage of population location and distance to key

amenitiesthatsupportahigherqualityoflifeincludingsafewaterandsanitation,electricity,

educationandhealthcare.MostofRwanda’spopulationisremote.Only17%ofRwanda’s

populationresidesintheurbanareascomparedtotheAfricanaverageof22%.Themajority

of urban areas other than the capital Kigali have an average of 25,000. Improving of

24


Rwanda’s telephonenetworkhasgonea longway in improving theconnectivitybetween

personsandbusinesseswhichasanimperativeforreducingremoteness.Rwandahasoneof

thehighestphonepercapitaindicesintheworldnowstandingat78.2%.Outof11.3million

thereare8.76milliontelephonelinesmostlyonmobile.Theexpansionoftheroadnetwork

has increased the connection between themain urban centres. The Rwanda paved road

networkisprettywelldeveloped.Rwandaisdoingwellinregardsofsanitation

Indicator 2000 2005/6 2010/11 2014/15 MDG

TargetStatus

7.4Proportionofpopulationusinganimproveddrinkingwatersource

64.1 70.3 74.2 84.8 82.0

7.5Proportionofpopulationusinganimprovedsanitationfacility

51.5 58.5 74.5 83.4

A3ShareofAgriculturetoGDP

RwandaagriculturesharetoGDPishigh:33%.AnnualgrowthofagriculturalGDPhasbeen

lowturningaround5%.Coffee,teaareamongthemainRwandatopagriculture.

2010 2011 2012 2013 2014 2015AGRICULTUREshareoftheGDP 33% 32% 33% 33% 33% 33%GDPgrowth 7.3% 7.8% 8.8% 4.7% 7.0% 6.9%AgricultureGDPgrowth 5% 5% 6% 3% 5% 5%AgriculturecontributiontoGDPgrowth 1.8 1.4 2.1 1.0 1.6 1.5Fig.5ShareofagricultureindustrytoRwandaGDP

25


Overallagriculture’scontributiontoGDPstabilisesto33%against47%forservicesand14%forindustryA4MerchandiseExportConcentration

The criterion of merchandize export concentration aims at ensuring that in as much as

countriescontinuetofocusonexportproductsinwhichtheyhaveacompetitiveadvantage,

theyalsodiversifyandenternewmarketstomaximizetheirexportpotential.Thefactthat

Rwanda’shasmaintainedcoffee, teaandpyrethrumandmineralsasherkeyproductson

theglobalmarketforthelastfivedecadeshasmadeitvulnerabletoexternalmarketshocks

and demand swings. They are totalling more than 60% of the total value of exports.

Consequently, Rwanda’s exports revenues are vulnerable to commodities prices shocks.

Rwandaistryingtodiversifyandfindotherexports.

A5.Shareofpopulationinlowelatedcostalzones

ThiscriteriondoesnotapplytoRwandaB:SHOCKINDEX

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015

33% 32% 33% 33% 33% 33%

13% 14% 14% 15% 14% 14%

48% 47% 47% 47% 47% 47%

6% 7% 5% 5% 5% 6%

contribulonofagriculturesectortoGDP

Agriculture Industry Services Adjustments

26


A6Instabilityofexportsofgoodsandservices

Rwanda’sexportvalueisnotstableasboththequantityandunitpricearenotstable.The

Rwandatradedeficitischronicandamajorriskforthenationaleconomyasimportscover

byexportsisnotguaranteed.

A7Victimsofnaturaldisasters

Rwandahasveryfew instancesofnaturaldisasterswith landslides inhighlyterrains in far

northernandwesternprovinces.ThethismonthofMya2016morethan50peoplediedin

landslidesandsomeroadswerecutduetofloodsandlandslide.

A8InstabilityofAgriculturalproduction

TheagricultureinRwandaisrainfedwhichcausesdropsinproductionduringdroughtsor

floodsperiod.Itdependsheavilyonclimatechangeandinstability.Thegovernmentistrying

tochangethepolicyandmakeitmorepredictable.

27


Table5:SummaryTableofRwanda’sAssessment

Criterion Indicators Performanceagainst theIPOAthresholdsorscores

OverallThreestep criteriaassessment

Likelihood ofGraduation by2020 using thetraffic lightmethodology

IncomeCriterion GNIpercapita,Atlasmethod(currentUS$)

$700($1,242) $700comparedto($1,242)

Notlikely

Human AssetsIndex

Under 5 mortalityrate

50(2014/15) Likely

Populationmalnourished(%)

16.3%

Gross SecondarySchool Enrollmentration

40.7%(2014) Likely

Literacyrate W:80.2(2014)M:82.4(2014)

Likely

EconomicVulnerabilityIndex

Population 11.3million(2015)

Likely

Remoteness Likely Merchandise export

concentration Notlikely

Shareofagriculture 33% likely Population in

CoastalareasN/A

Instabilityofexportsof goods andservices

Victims of naturaldisasters

Notlikely

Instability ofagriculturalproduction

Notlikely

Overallassessment Less likely tograduateby2020

28


III. Chapter3AlignmenttoNationalPlanningProcessesAlignmentofNationalPlanningProcessestotheIPoAAgendaIPoA(EightPriorityAreas)

RwandaEDPRSIIFivePriorityAreas

1.Increasingproductivecapacity

1:IncreasethedomesticinterconnectivityoftheRwandaneconomythroughinvestmentsinhardandsoftinfrastructure

2.Supportingagriculture

3.Enhancingtrade

2:IncreasetheexternalconnectivityofRwanda’seconomyandboostingexports

4.Focusingonkeycommodities

5.InvestinginHumanandsocialdevelopment

3:Transformtheprivatesectorbyincreasinginvestmentinprioritysectors

6.Multiplecrises

7.Mobilizingfinancialresources

4:TransformtheeconomicgeographyofRwandabyfacilitatingandmanagingurbanisationforincreasedgrowthcountrywide

8.EnsuringGoodgovernance

5:Pursuea‘greeneconomy’approachtoeconomictransformation

ThemediumplanEDPRS II (2013-2018) started twoyearsafter IPOAand the tableaboveshowshownationaltargetsareintandemwithIPOApriorities.TheIPOAcoveragebyEDPRSIItargetsappearsbetterwhenwelookatEDPRSIIindicators.

29


30


IV. Chapter4:KeysDriversofRwanda’sSuccess

FourmainprincipleswerebehindRwanda’ssuccess:

• Visionaryandcompetentleadership;

• Workingtogether(mobilizationoftheentirepopulation);

• Increasinglystronginstitutionsnotablythepublicadministrationsystem;

• PolicyinnovationandHomegrownsolutions;

• Aid/Developmenteffectiveness.

VI.1Visionaryandcompetentleadership;

Rwanda has been enjoying a visionary leadership responsible for Rwanda’s change and

transformation.YetRwanda’stransformationdidnotcomefromonemanalonebutfroma

systemthatestablishedacommonhistory,facinguptopastconflicts,constructingaclear

pathforwardandbringingeveryoneonboardtogetthejobdone.

VI.2RwandaWorkingTogether,“UmRwanda”

Workingtogether,withtheparticipationofthewholepopulation,hasallowedfast-tracking

implementationandhasprovencosteffective.Examplesinclude:

• fast-trackingthe9YBE(NineYearBasiceducation)throughactiveparticipationofthe

populationintheconstructionofclassroomsattendedbytheirchildren;

• Anotherexampleof“workingtogether”istheCropIntensificationProgram(CIP)in

agriculture,withthemobilizationofthepopulationforlandconsolidationandthe

intensiveuseoffertilizers.

31


VI.3Rwanda’sContinuousPolicyInnovationandHomeGrownInitiatives

Since the immediatePost genocideperiod,Rwandahasdemonstrated strong capacity for

development policy innovation and its many home-grown initiatives have turned into

successstoriesinstrengtheningdelivery.

Theseinclude:

• Gacaca(traditionalcourts),

• Abunzi(mediators),

• Imihigo(performancecontracts),

• Intekoz’Abaturage(citizenforums),

• Ubudehe(socio-economicclassificationtoassistvulnerablegroups),

• Vision20/20UmurengeProgram(directcashtransfersandpublicworkprogramme)

• Girinka(donationofonecowperpoorfamily).

VI.4Rwanda’seffortstomitigateitslandlockedstatus:regionalintegrationa. Regionalintegration

• Inordertoreducetheimpactofitslandlockedcountrystatus,andalsoincreaseits

regionalcompetitiveness,Rwanda isamemberofallEastAfricanCommonmarket

blocks: (Ex:EAC,COMESA)andhasratifiedandadoptedmostregionaltreatiesand

bestpractices;

• Thishasprogressivelyhelpedthecountrymovefrom‘’alandlockedcountry”toa

“landlinkedeconomy’’.

b. InnovationanduseofICTinTrade.

Intheaimoffacilitatingimport/exportprocesses,Rwandahas:

• streamlinedallcustomssystems,usingthecountry’scomparativeadvantageinICT;

• AdoptedkeytradefacilitationpracticesincludingtheOnestopborderPost(OSBP)

andtheeliminationofNon-TariffBarriers;

32


• RatifiedatradefacilitationmechanismswithinEAC,whichwillallowRwandaand

otherEACcountriestoachieve,by2016,a15%reductionoftheaveragetimeto

import/exportacontainerfrom/toMombasaorDarEsSalaam.

c. Infrastructure

Rwandahasrecentlymadegreatseffortstobridgeitsinfrastructuralgap:

• ACountrywideRoadinfrastructureupgradeisunderway,linkingRwandatootherEAC

membercountries,andsomeportionshavebeenfinalised.

• Moreover,theimplementationofabigrailwayprojectlinkingMombasatoRwanda,

andpassingthrough,Uganda,SouthSoudanandRwanda,hasalreadystartedinKenya.

V. Chapter5:Conclusionandpolicyperspectiveandthewayforward

i. Inconclusion

ASustainedEcosystemofInclusiveandPro-PoorpolicieshasallowedRwandatoenjoyatthesametime

- Asustainedeconomicgrowthof8%(average2001-2014)

- AsustainedPovertyreductionfrom58.9%to39.1%(2000/01-2013/14)

- AsustainedReductionininequalityfrom0.507to0.448(2000/01-2013/14)

- AsignificantnumberofRwandanspulledoutofpoverty(2006-2011:>1millionand

2011-2014:650.000)

- AllthesegreatresultshavecontributedmeasurablytowardsIstanbulprogramme

achievements.

• Theeconomyisgrowingfast

• Agriculture,foodcropisgrowingfasterthanthepopulation

• Demographicpressuresarereducing

• Nutrition,livingconditionsandhealthimproving

33


• Increasingparticipation

– Increasingruralparticipation(Agricultureandbusiness)

– Smallbusinessesincreasingfaster

– Lowerquintilehouseholdsbenefiting

• Sustainedprogresssince2001andalsosince2011

• PovertyandInequalityarereducing

ii. ContinuingChallengesandPolicyperspective

• Theeconomystillneedstogrowinabalancedmannertofacilitateinclusivetransformation.

• Agricultureisstillveryimportant

• Demographicpressuresstillexist

• Increasingneedforbusinessdevelopmentsupport:

§ Alotofmicroandsmallbusinessesarebeingestablishedandmorewillcomeup;theywillneedtechnical,organizationalandfinancialsupport

§ Needtodiversifynon-farmactivitiesastheyareconcentratedinretailandwholesale

iii. Thewayforward

Goingforward:Jobcreation

• Strengtheningimplementationofeducation,skillsdevelopment,andentrepreneurship

andjobcreationprogramstotapintothedemographicdividendopportunities.

• Strengtheningimplementationofurbanizationandruralsettlement,includingthe

developmentofsecondarycitiestocopewithrisingdemandforjobsthatcouldaffect

urbanpoverty.

• 146,000jobscreatedannually(2011-2014):anindicationthattheEDPRS2targetof

200,000jobsisachievable.

• StrengtheningpartnershipwiththePrivatesectorforjobcreation.

34


• NewJobcreationJointImihigoledbyMIFOTRAwillensuredeliveryonjobcreation

targets.

Goingforward:Malnutrition

• StrengtheningimplementationoftheJointActionPlantoEliminateMalnutrition(JAPEM).

• Continueimprovingonagricultureproductivity.

• NewSocialProtectionJointImihigoledbyMINALOCwillensuredeliveryontheaboveactionplan.

• Anewfactoryoffortifiedfoodforchildren,pregnantandlactatingwomenisexpectedtostartproductionin2016.

Goingforward:Povertyreductioningeneral• Currentpoliciesandprogramshaveyieldedgoodresultsinpovertyreductionand

economicgrowthandshouldbemaintained.

• Imihigonewgenerationwillstrengthentheimplementationoftheabovepoliciesand

programs.

• Specialfocusonmonitoringofimplementationofsocialprotectionprogramsand

povertygraduationprocess.

35


Annexes

36


VI. Annex:RwandaperformanceagainsttheIstanbulplanofactiontargetsandindicators

1.6. ProductiveCapacity

Rwanda’sachievementscompared

toBrussels'PAforLDCs

EDPRS2&RevisedVision2020

alignedwiththeIstanbul's

PlanofAction

2001 2010 2015 2020target

i.Value-addedshareofmanufacturing,agricultureandservices(%ofGDP)

shareofmanufacturing(%) 12.9 13.9 14 19

Shareofagriculture(%) 45.2 34.8 33 24

shareofservices(%ofGDP) 37.4 45.5 47 57

ii.Connectivity(per100people)

Internetusers N/A 4.3(10) 20 50(100)

Mobile/cellularsubscript. N/A 45 70 60

iii.Energy(%ofpopulation)

Accesstoelectricity 2 10.8 20 75

37


1.7. Agricultureandfoodsecurity

Rwanda’sachievementscomparedtoBrussels'PAforLDCs

EDPRS2&RevisedVision2020alignedwiththeIstanbul'sPlanofAction

2001 2010 2015 2020target

Malnutritionprevalence(percentageofchildrenunder5)

Weightforage(Wasting) N/A 3 2 0.5

Heightforage(stunting) 42.6 44 38 15

Underweight(%) 24.3 11 9 8

1.8. Tradeandcommodities

Rwanda’sachievements

comparedtoBrussels'PAfor

LDCs

EDPRS2&RevisedVision

2020alignedwiththe

Istanbul'sPlanofAction

2001 2010 2015 2020target

Tradeandcommodities

ShareofexportsinGDP(%) 9.2 10 10 27.2(EDPRS2)

AverageExportgrowth 22.8(IN2008) 25.1 12 28(V20/20)

38


1.9. Financialresourcesmobilisationfordevelopment



2001 20102015 2020target

Financialresourcesmobilisation

Grossdomesticsavings(%ofGDP) 1.2 4.6 1220

Governmentrevenue,excludinggrants(%ofGDP)

9.7 12.5 16.8 20

1.10. HumanDevelopment(Education)



2001 2010 2014 2020target

Education

Netenrolmentinprimaryeducation(%) 72.6 95.4 96.8 100

Netenrolmentinsecondaryeducation(%)

7 22.6 35.7 100

Pupil/teacherratioinprimaryeducation51 63:1 58:1 40:1

Pupil/teacherratioinsecondaryeducation

29.6:1 29:1 21:1 30:1

39


1.11. HumanDevelopment(Health)


comparedtoBrussels'PAfor

LDCs


alignedwiththeIstanbul'sPlanof

Action

2001 2010 2015 2020target

Health

Infantmortalityrate(deathsper

1,000livebirths)107 50 32 27

Maternalmortalityrate(deathsper

100,000births)1070 487 210 200

Contraceptiveprevalence(%of

womenaged15-49)17.1(IN2005) 45 47.5 72(2018)

NumberofDoctorsper100,000

inhabitants1.5 6 6 10

Numberofnursesper100,000

inhabitants16 77 83 100

MortalityrateforMalariacases 41 164.1

(2013)5

40


1.12. HumanDevelopment(Youth)





PlanofAction

2001 2010 2014 2020target

Youth

Youthliteracy(%of

populationaged15-24)72.7 83.7 86.2 100

Femaleliteracy(%offemale

populationaged15-24)67.4 84.7 87.5 100

1.13. HumanDevelopment(Gender)


comparedtoBrussels'PA

forLDCs



PlanofAction

20012010 2015 2020target

Genderequalityandempowermentofwomen

%ofparliamentaryseatsheldbywomen 25.7 56 64 50

%offemalestudentsinprimaryeducation 51 50.7 50.8 50

%offemalestudentsinsecondaryeducation 51 50.7 52.8 50

41


1.14. HumanDevelopment(Shelter,Water&Sanitation)



200120102015 2020target

Shelter,Water&Sanitation

%ofpopulationusinganimproveddrinkingwatersource

52 74 85 100

%ofpopulationusinganimprovedsanitationfacility

20 63 83.4 100

%ofpopulationthathasaccesstoelectricity

4.3 10.8 19.8 100

1.15. HumanDevelopment(Lifeexpectancy)



EDPRS2&RevisedVision

2020alignedwiththe

Istanbul'sPlanofAction

2001 2010 2015 2020target

Lifeexpectancy

Lifeexpectancy(years) 4864

(2012)66.7 67.5

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