Vision 2020 Umurenge Programme (2009 2013)

PROJECT DOCUMENT

VISION 2020 UMURENGE PROGRAMME (2009 – 2013)

DFID Rwanda, February 2009 Abbreviations and Acronyms used CP Country Plan CDF Community Development Fund Common Performance Assessment Framework underpinning budget CPAF support DCDP Decentralisation and Community Development Projects DFID Department for International Development EDPRS Economic development and poverty reduction strategy EICV Household Living Conditions Survey FRA Fiduciary Risk Assessment GoR Government of Rwanda MDG Millennium Development Goals M&E Monitoring and evaluation MINAGRI Ministry of Agriculture MINALOC Ministry of Local Government MINECOFIN Ministry of Finance and Economic Planning MINICOM Ministry of Commerce MINIRENA Ministry of Natural Resources PEFA Public Expenditure Financial Accountability VUP Vision 2020 Umurenge Programme WB World Bank

ii Table of contents

1 SUMMARY...... 1 2 PROJECT DETAILS...... 2 2.1 PROJECT DESCRIPTION...... 2 2.3.1 Background...... 5 2.3.2 Approach...... 6 2.3.3 Economic Appraisal...... 6 2.3.4 Social Appraisal...... 8 2.3.5 Institutional Appraisal...... 9 2.3.6 Political Appraisal...... 10 2.3.7 Environmental Appraisal...... 11 2.3.8 Fiduciary Risk Assessment...... 11 2.4 Lessons and Evaluation...... 12 3 IMPLEMENTATION...... 13 3.1 Management arrangements...... 13 3.2 Timing...... 13 3.3 Funding:...... 14 3.4 Operations and Maintenance...... 16 3.5 Contracting & Procurement:...... 16 3.6 Accounting / Audit Arrangements:...... 17 3.7 Monitoring and reporting:...... 17 4 Risk Assessment...... 18 5 Conditionality……………………………………………………………………………...... 18

iii Tables

Table 1: Summary of objectives and expected results Table 2 Summary of options assessment Table 3: Summary of the FRA Table 4: Total DFID disbursements in millions of pounds Table 5: VUP expenditure for 30 Umurenge – i.e. one Umurenge per District Table 6: VUP projected income and scale up 2008/2012 Table 7: Risk assessment

Annexes

Annex 1 Logical Framework Annex 2 Risk Analysis Annex 3 Consultation record Annex 4 Environmental screening note Annex 5 Assurance checklist Annex 6 Fiduciary Risk Assessment Executive Summary Annex 7 Detailed Appraisals: economic, social, environmental Annex 8 Memorandum of Understanding Annex 9 Policy details: direct support, public works and microfinance

iv 1 SUMMARY

The purpose of the Vision 2020 Umurenge Programme (VUP) is to reduce the number of people living in extreme poverty. VUP is the Government of Rwanda’s (GoR) main mechanism for protecting the poor from shocks and building poor households productive capacity in the longer term.

VUP is a flagship programme of the Economic Development and Poverty Reduction Strategy (EDPRS). DFID Rwanda’s Country Plan (DP) 2008-2012 is fully aligned with the EDPRS and social protection is one of its 5 focus areas.

The VUP will extend and increase the efficiency of social protection spend in Rwanda, it has three components underpinned by sensitisation and training: 1) Direct support: cash transfers to the poorest household that cannot work. 2) Public works: employment to the poorest households who can work and 3) Financial services: a savings and credit infrastructure that will reach the poor.

The goal of the programme is to reduce income poverty and inequality.

The purpose is to accelerate the reduction of extreme poverty in the targeted Imirenge1.

The outputs are: 1. Extremely poor households have access to public works 2. Relevant and operational community assets, both social and economic, in place. 3. Extremely poor households assisted through direct support packages. 4. Vulnerable and entrepreneurial households access credit and savings. 5. Institutional strengthening to ensure effective and sustainable delivery of the VUP programme.

Expected results: VUP is critical to accelerating poverty reduction through enhancing human capital, accelerating economic growth and the impact of growth on poverty. It will directly impact on nutrition levels and school attendance for the poorest households. Significant impact is expected in progress on MDG1: poverty and hunger. Impact is also expected on MDG2: universal education, MDG4: child health, MDG5: maternal health and MDG6: environmental sustainability.

Implementation started in March 2008 in the poorest Umurenge in each of Rwanda’s 30 Districts, initially reaching approximately 21% of households in the targeted Imirenge (17,500 for public works and 6,860 for direct assistance2). The Government of Rwanda wants to scale up to all 416 Imirenge nationwide over the next 3 years. The VUP Management Team is located in the Community Development Fund (CDF) in the Ministry of Local Government (MINALOC).

To achieve long term results VUP needs to capitalise on the current political will to extend social protection by clearly demonstrating positive outcomes. DFID support for a credible pilot and reliable evidence base is critical to the quality and sustainability of

1 The administrative level below a district with an average population of 19,000 per Umurenge. Plural is Imirenge 2 Public works activities started in July and direct assistance will start February 2009.

1 rolling out this programme nationwide and thereby securing adequate future funding from GoR and development partners. This is reflected in the focus on monitoring and evaluation of results throughout the rollout of VUP.

DFID will provide £20 million in financial aid and technical cooperation to the VUP over 5 years (08/09 - 12/13). Current commitments from the GoR and the World Bank together with this commitment from DFID will allow a fully funded pilot in at least 30 Imirenge in the first two years rising to 49 fully funded Imirenge by 2012/13.

The economic appraisal indicates that the benefits will outweigh the costs by a significant margin.

The Fiduciary Risk Assessment (FRA) for this programme, carried out in January 2009, indicates a medium to high risk rating with a positive trajectory of change. The programme is judged able to manage the risks if the FRA recommendations are implemented.

The risk assessment of the programme as a whole indicates that the VUP initiative is high risk. This level of risk is considered acceptable given the potential developmental impact and enhanced domestic stability that can be expected if the initiative is successful. There are no “killer” risks that have both high probability and high impact. All risks will be monitored and regularly re-assessed by DFID as part of its monitoring process.

DFID is supporting the current version of the VUP policy framework. We will provide technical support to the VUP programme for programme management and development, finance and monitoring and evaluation as well as shorter term inputs required. Our support will build robust implementation, administration and financial systems and an evidence base that allows informed debate for course correction and policy improvements. Technical support and oversight of reporting and dialogue through the VUP stakeholder forum are key to our risk mitigation strategy.

2 PROJECT DETAILS

2.1 PROJECT DESCRIPTION

What problems does VUP address?

Sustained growth has not translated into the levels of poverty reduction needed to meet Rwanda’s poverty, inequality and human development targets or the MDGs3.

Improvements in the delivery of services will not reach Government targets and MDGs without an increase in the incomes of the poorest as in many instances cost remains the most significant barrier to people’s access4.

3 Rwanda is off track on progress towards MDG1 (income poverty) and MDG4 (infant mortality) and MDG5 (maternal mortality). 4 Evidence from District level studies by Save the Children and the Clinton Foundation shows that costs remain the most significant barrier to people keeping their children in school (Rwanda currently only has a completion rate of 52% in primary education) and for pregnant women choosing to deliver in a health centre (also 52%).

2 Social protection expenditure needs to be more efficient. The 2006 Public Expenditure Review on Social Protection highlighted the need for better targeting5, better coordination and more spend on budget6.

What will the money be spent on?

VUP is a flagship programme of the EDPRS it aims to extend and increase the efficiency of social protection spend in Rwanda. It has three components underpinned by sensitisation and training: 1) Direct support: cash transfers to the poorest household that cannot work. 2) Public works: employment to the poorest households who can work and 3) Financial Services: a savings and credit infrastructure that will reach the poor.

The results anticipated from the implementation of VUP are shown in table 1.

Table 1: Summary of objectives and expected results

Objectives Expected results Baseline Target 2008 2013 Goal (all 2005) To reduce income  Decreased share of population below 56.9% 46% poverty and inequality poverty line  Decreased share of population below 36.9 % 24% extreme poverty line.  More equality (Gini coefficient) 0.51 0.4  Decrease in the Poverty Depth 40% Purpose To accelerate the  Decreased share of population living Baseline Targets available reduction of extreme in extreme poverty in VUP sectors conducted Dec in light of baseline poverty in the targeted  Decrease in the Poverty depth in 2008. Data Imirenge. VUP sectors available March 2009 Outputs  Extremely poor  Increased number of extremely poor Baseline will be Targets available households have households accessing public works / completed March in light of access to public direct support / credit and savings. 2009. baseline works  Increased % of eligible households  Extremely poor accessing public works / direct Existing targets household support. are shown in the assisted through  Full complement of VUP staff at both complete logical direct support levels, MINALOC and Umurenge framework in packages  Internal controls in place in annex 1.  Vulnerable and accordance with the financial systems entrepreneurial manual households  Monitoring systems implemented in access credit and accordance with the M&E manual savings including monitoring of targeting and  Institutional environmental good practice. strengthening to  Joint action development fora in place ensure effective at Imirenge level. and sustainable  Number of VUP sectors producing delivery of the regularly a poverty profile based on VUP programme. objectively verifiable indicators

5 To date some vulnerable groups are better provided for (e.g. genocide survivors and returnees) than others (e.g. people with disabilities and orphans and vulnerable children). 6 In 2006 97% of donor support for social protection was off budget, 50% of it in the form of food aid. A 2004 inventory identified approximately 80 donor safety net projects, only 3 of which cost above $5m.

3 measured through an improved Ubudehe system.

The VUP baseline and monitoring system will provide valuable addition to data on extreme poverty in Rwanda including disaggregated data on households in extreme poverty and on impact. The baseline survey underway at the moment designed with a lot of input from the World Bank is at the household level. The monitoring system will also conduct intra household studies to explore differential impacts within households.

The VUP builds on Rwanda’s ongoing decentralisation plan that envisages devolving responsibilities below the current District level. The programme also provides mechanisms for coordinating wider social protection responses ensuring better coordination and targeting for increased impact.

Implementation started in March 2008 in the poorest Umurenge7 in each of Rwanda’s 30 Districts. The Government of Rwanda plans to scale up to all 416 Imirenge nationwide by 2012. DFID has sought a commitment that the roll out of this programme will be in line with the available resource envelope to ensure that financial resources are used effectively and not spread too thinly.

DFID will provide £20 million in sector budget support to the VUP over 5 years (08/09- 12/13). Current commitments from GoR and the World Bank together with this commitment from DFID will allow a fully funded pilot in at least 30 Imirenge in the first two years rising to 49 fully funded Imirenge by 2013. DFID support to VUP will be comprised of:

1. Financial Aid to support the implementation of the VUP programme. Made up of transfers and credit to households living in extreme poverty in the poorest Imirenge in Rwanda, training and sensitisations, and administration costs.

2. Technical Support to the VUP management team: 3 long term (2 yrs) specialists (programme management, finance and M&E); a short term specialist on institutional strengthening and decentralisation; and a fund for short term specialist input (including on social protection and microfinance).

This programme (08/09-12/13) is the first phase of DFID Rwanda’s support to VUP – the findings from the pilot evaluation will inform the decision to extend and the design of a second phase.

Who will benefit?

The direct beneficiaries are people living in extreme poverty in the targeted Imirenge – identified through the Ubudehe8 community based targeting process. So far 21% of households in the pilot Imirenge have been identified for support (17,500 for public works and 6,860 for direct assistance) in the 30 pilot Imirenge. For more details of the components see Annex 9.

7 The administrative level below a district with an average population of 19,000. Plural is Imirenge. 8 Ubudehe is about people coming together at community level and deciding on how to spend scarce resources to benefit the community as a whole and the poorest – this is consistent with consensual cultural decision making traditions. The Ubudehe provides a community based targeting mechanism that has been in use in Rwanda for a number of years. The community rank households using a committee and hold public meetings to validate the results.

4  Direct support provides cash support to the poorest households that have less than 0.25 hectares and cannot work.

 Public works provides employment opportunities to poor households that have less than 0.25 hectares but have at least one able-bodied adult in the household who can work.

 Financial services will develop a microfinance infrastructure with particular attention given to access for the poorest. The policy is still in design.

Community wide impact is expected from the increased cash in the economy, the increased productive investments possible from decreased dependency within the community and the outputs of public works.

2.2 PROGRAMME APPRAISAL

2.2.1 Background

The Akagera high-level Government retreat in 2005 reviewed growth and poverty data from the 2005 household survey showing the need for greater efficiency in poverty reduction. Government’s response articulated in the EDPRS 2008-2012 focuses on: enhanced growth for poverty reduction; increasing investments in agriculture; limiting population growth; and in extending and improving the efficiency of social protection spend. VUP is the key mechanism through which the Government of Rwanda wishes to extend and coordinate social protection. The Common Performance Assessment Framework (CPAF) for General Budget Support includes social protection indicators that will be achieved through VUP.

Since 2005 DFID, the World Bank and UNDP, have been key partners to the GoR in developing social protection thinking and policy. Key milestones to date include: the approval of a social protection policy in 2004, a Public Expenditure Review of Social Protection in 2006, and the development of strategies for social protection in the EDPRS in 2007. DFID also supported increased knowledge and political commitment through linkages to the Ethiopia safety net programmes. DFID currently co-chairs the MINALOC multi stakeholder social protection and the decentralisation working groups.

The GoR has led the design of the VUP. The vision document was written by MINECOFIN and MINALOC, and approved by Cabinet. DFID and the World Bank provided technical support to assist MINALOC in developing more detailed policies from the original vision document (Annex 9).

Supporting increased coverage of social protection programmes aligns with international community commitments made to reach MDGs and the African Union’s new social policy including the UK’s 2005 White Paper. DFID’s response to the ongoing global economic crisis, the impact of which is expected to worsen in the coming year, includes putting in place new social protection programmes and identifying programmes that are effective and can absorb more funding. (DFID PS 18th December 2008).

5 2.2.2 Approach

DFID Rwanda’s CP 2008-2012 is fully aligned with the EDPRS and social protection is one of its 5 focus areas.

VUP has a policy framework that is credible and robust enough to align behind. The programme has high level political backing9 and has been shaped by far more than the social protection debate, it incorporates many aspects of Rwandan decentralisation and community based processes for supporting community development and helping the poorest.

The Government of Rwanda’s preference is support in the form of financial aid to VUP. DFID’s approach is to support the Government of Rwanda policy implementation through financial aid to VUP whilst ensuring that there is rigorous monitoring and evaluation that will enable informed policy debate for policy development around scale up and broader social protection in the longer term.

Supporting VUP directly, rather than through General Budget Support presents us with several opportunities: 1) deeper dialogue around implementation and monitoring and policy analysis during the pilot phase; 2) enables agreements around minimum budgeting required for scale up so that the idea of a comprehensive package of social protection is adhered to in the face of the political pressure to scale up nation wide very fast 3) work with MINALOC to strengthen the institutional framework needed to for long term support of social protection by development partners; and 4) Fiduciary risk mitigation through scrutiny of budget allocation and execution. .

Depending on the finalisation of the social protection strategy and improved coordination and monitoring and evaluation in the social protection sector as a whole a transition to Sector Budget Support might be possible over the medium term. This programme provides the building blocks for this direction.

2.2.3 Economic Appraisal

This summary covers three main areas: the overall justification for intervention; assessment of the options for providing support and overall recommendation; and recommended design modifications and M&E recommendations. It is based upon the full economic appraisal which is contained in the annex 7.

Intervention Justification: Economic growth has been robust since the mid-1990s in Rwanda but this has not been matched by progress in poverty reduction. There is a weak relationship between growth and poverty reduction; the elasticity of poverty reduction with respect to growth is between -0.2 and -0.4 (compared to a developing country average of -1.0). The weak relationship is generated by the depth of poverty10 in Rwanda and the stagnation of agricultural production between 2000 and 2006/711. VUP

9 The Government of Rwanda’s commitment to rolling out a social protection is not shared by all Governments in the region where DFID and other development partners are often focused on building political commitment or supporting smaller scale pilots. 10 The ‘average’ poor person is 40% below the national poverty line 11 During this period agricultural growth only occurred where there was an expansion of land area (mainly in Eastern Province) and productivity stagnated. The elasticity of poverty reduction with respect to agricultural growth is much higher than for economic growth as a whole at between -1.1 and -1.3 in the period 2000-2005.

6 is designed to directly address the first of these and was the major policy response of the Government of Rwanda to the poor poverty reduction progress.

Considered Options: Three different delivery options were considered. These were focused around the delivery of the financing, as VUP is already established and there is little scope for changing components at this stage. The options were:  Direct delivery through the Community Development Fund  Indirect delivery through sector budget support  Indirect delivery through general budget support

Table 2 summarises the assessment. The assessment methodology it described in the full appraisal, and is based on a comparison of likely benefits against likely costs. All considered options yield positive net benefits and therefore all approaches to providing this support to the Government of Rwanda can be considered. Our assessment indicates that the greatest potential net benefits are generated by the option of direct support to VUP (as financial aid through the CDF) and therefore this is recommended approach. The fiduciary risks associated with the CDF are significant and need to be managed effectively by the programme.

Design Issues: It is clear from the international evidence that the benefits could be increased substantially by design changes. This particularly relates to the realisation of the broader economic growth benefits; in order for these to be generated the period of assistance for direct support and public works needs to continue beyond 6 months – currently eligibility is reviewed every 6 months.

M&E Issues: The economic appraisal has also raised specific M&E requirements. These are focused on the disaggregated monitoring of direct assistance, public works, and financial access components. These will have different cost and benefit profiles and must be monitored separately. This will allow effective evaluation, and allow course corrections in-programme to maximise benefits to the poor.

Table 2 Summary of Options Assessment Option Total Total Ratio of Notes Rank Adjusted Adjusted Benefits to Benefits Costs Costs 1 Direct delivery 14.2 12 1.18 Adjusted benefits outweigh the through the CDF adjusted costs by a significant margin. The benefits could be significantly higher if the design were altered to allow a greater probability of realisation of the broader economic growth benefits. 2 Indirect delivery 14.2 12.4 1.14 Adjusted benefits outweigh the with SBS adjusted costs.

Fiduciary risks are significantly higher than direct delivery through VUP.

The benefits could be significantly higher if the design were altered to allow a greater probability of realisation of the economic growth benefits. 3 Indirect delivery 14.2 13.1 1.08 Adjusted benefits only just

7 with GBS outweigh the adjusted costs.

Fiduciary risks are significantly higher than direct delivery through VUP and through SBS.

The benefits could be significantly higher if the design were altered to allow a greater probability of realisation of the economic growth benefits. See full appraisal for details of methodology used to generate these figures.

2.2.4 Social Appraisal

VUP design and the EDPRS both draw on poverty analysis from the EICV household surveys and Ubudehe data. The EICV data shows that despite sustained and relatively high rates of economic growth12 there has been limited impact on poverty levels and inequality has increased13. The reason is the high depth of poverty14, the stagnation in agricultural growth and people’s limited activity in the non agricultural sector15. The poverty line only fell from 60.4% to 52% and the extreme poverty line from 42% to 37% between 2000 and 2005. High rates of population growth (3.5% p.a.) mean that the absolute number of people living under the poverty line has increased over the last 5 years.

The VUP uses Ubudehe community based poverty targeting to identify beneficiaries (refer to footnote 8) for public works and direct support. Financial services will not be restricted by poverty targeting but aim to bring more savings and credit to the poor through sensitisation and better product development. Evidence from VUP so far indicates that households found eligible for direct support comprise a large proportion of the following: one person households, households affected by illness, households headed by people with disabilities, the elderly and children.

Households receiving transfers are expected to benefit through increased incomes, better nutrition, able to keep more children in school and some increased access to health services. The wider community is expected to benefit through more markets for goods and produce and less dependency enabling more productive use of resources.

Policy concerns to be monitored in the current pilot design include:  Receipt of support other social protection can results in a reduction of the VUP transfer. This may have a negative impact on vulnerable groups with particular needs such as people with disabilities or people with chronic illness. This needs to be monitored in order to inform directives to the Umurenge staff and Ubudehe committees.

12 Average rate of economic growth between 1995-2002 was over 10%, this fell significantly in 2003 due to a significant drop in agricultural production and then bounced back to 6% between 2004 - 2007 13 The Gini Coefficient rose from 0.47 to 0.51 between 2000 and 2005. 14 The average poor person lives at 40% below the poverty line so a significant increase in income is needed to lift these people out of poverty 15 Over 80% of the workforce still work in agriculture – this is even higher for women at 86%

8  Direct support will be paid to the head of the households – not to women as is often recommended for the best development outcomes. The rationale for this is not clearly set out. The impact on intra-household allocations and decision making need to be monitored.

 The intergenerational impact on poor households is an important expected impact – through better nutrition for children, school attendance and access to mutuelle and health services. Analysis of this should be part of the impact monitoring and cost benefit analysis.

See annex 7 for a more detailed social appraisal.

2.2.5 Institutional Appraisal

VUP plans to use Rwanda’s decentralised government structures for delivery of the programme. The intent is to devolve targeting and decision making for social protection and development issues down to Umurenge level. This is an enhancement of the 2005 decentralisation reforms that established Districts as the focal point for service delivery. VUP plans to build on this whilst at the same time recognising the institutional and logistical challenges that the roll out of this programme presents.

The Government is committed to using a participatory approach to guide the relationship between the programme and its stakeholders. The instruments for this are at Umurenge level the JADFs, and at a national level, the annual Stakeholder Forum. Both provide the opportunity for stakeholders to raise and discuss matters of programme policy and roll- out. The outcomes of these participatory processes will, in turn, feed into the DFID co- chaired EDPRS Sector Working Groups for Social Protection and Decentralisation.

Currently VUP is established as an administrative component of the Common Development Fund (CDF). The CDF was established by law no. 20/2002 to consolidate the activities for building the human and infrastructure capacity needed to successfully implement decentralisation policies and reduce poverty. In 2006, the legislation was revised to redefine the CDF as a quasi-autonomous body operating under the stewardship of MINALOC. MINALOC chairs a board of directors that includes representatives from MINECOFIN, MINAGRI, other line ministries, local government, the private sector, and popular banks and civil society.

There are issues concerning how this arrangement works in practice. For example, the integration of the VUP into the CDF management and administrative structures may dilute VUP impact as a flagship programme of the EDPRS; it has been commented that CDF’s management is overly bureaucratic and, as a result, may not be the best mechanism to deliver the VUP in an efficient and effective manner; finally there is potential ambiguity regarding the authority of the VUP’s management board in relation to CDF’s Board of Directors in terms of decision making and overall accountability for the programme.

These are the current institutional arrangements for the VUP. However, as part of a wider ranging review, MINALOC has been asked by the Prime Ministers Office to critically examine its current structure and identify potential overlaps and duplications that can be eliminated through rationalisation. This restructuring exercise aims to devolve more staff and competencies from the centre to local administrations. These

9 actions are consistent with the intent outlined in the Government’s decentralisation policy.

The evolving revised structure for the VUP now places it on an organisation status at the same level as CDF. The change here is that CDF no longer has a management or administrative role in the functioning of the VUP. Whilst this might be an opportunity to develop the VUP more fully, it also creates potential risks including for example, unclear financing mechanisms; monitoring and evaluation may be weakened through the planned creation of a consolidated M&E service; and potential misalignment of financing and management arrangements. Until such times as this Government wide restructuring exercise is concluded it will be difficult to clearly define the institutional environment in which the VUP will operate. Once the current uncertainties begin to be resolved DFID will support a more in-depth institutional appraisal. This appraisal would include a risk mitigation exercise designed to identify possible, institutional strengthening measures that could be employed to reduce the programmes risk exposure profile. It is anticipated that any institutional strengthening component of the programme would result in revisions to the proposed budget and the content of the log frame.

On the positive side it would appear that the Government through this restructuring will continue its redeployment of civil servants from the centre to the local levels. These actions will effectively strengthen both the numbers and the capacity at local levels and should improve the quality and implementation of decentralisation including the flagship VUP programme.

2.2.6 Political Appraisal

The characteristics and nature of Rwanda’s political landscape are understandably shaped by the country’s recent past, in particular the 1990-94 war and 1994 genocide. The government’s mission now is to ensure that the sort of failures that culminated in the events of 1994 are never again possible in Rwanda. From this certain things follow.

Most important for the VUP programme, it explains the centrality of the policy of political decentralisation in Rwanda, where successively since 2001 institutions of local government have been reformed and expanded. The aim is to establish disciplined and responsive administrations at local level. This way, it is hoped that local leaders - and the people they serve – will feel a strong allegiance to the national political structure, and a strong interest in its continued good health.

Our institutional appraisal notes that the VUP programme relies upon and aims to bolster the success of Rwanda’s decentralisation programme. It also builds on ubudehe processes; putting communities themselves at the centre of targeting and decision- making around the allocation of resources. Even more clearly, the VUP provides evidence of a strong commitment on the part of the Rwandan government to tackle issues of extreme poverty. DFID can not be an unqualified, uncritical advocate of Rwanda’s managed approach to politics and democracy – the credibility of our partnership demands more than that. But we can see that VUP reflects a political aspiration to foster an inclusive, responsive state that empowers its people at grass- roots. This - and the will to broaden and deepen the benefits to ordinary Rwandans of the progress the current government has achieved since 1994 – we can support whole- heartedly.

10 2.2.7 Environmental Appraisal

Sustainable environmental management remains a significant development challenge in Rwanda. An already degraded natural resource base is under pressure from: high population densities and a rapidly growing population; unregulated economic development; unsustainable land use practices; and a demonstrable need to intensify agricultural production.

VUP aims to achieve economic development and poverty reduction, and many of the activities are likely to deliver significant environmental co-benefits: tree planting, terracing, small catchments management, restoration of degraded slopes and drainage systems, improved sanitation, provide clean water, improved transport of agricultural inputs and rural access to markets, improved food security etc).

However, some activities provided through public works have the potential to cause environmental concern e.g. terracing, including development infrastructure priorities in health, transport, education, environment, agriculture and water. The management structure proposed includes safeguards for these activities via application of screening processes as detailed in the ESN. This will be via incorporation of environmentally responsible processes and procedures into the project structure which are supported by robust monitoring and evaluation, training of implementers in environmental responsibilities, and management accountability.

2.2.8 Fiduciary Risk Assessment

A Fiduciary Risk Assessment (FRA) was undertaken in January 2009 using the DFID guidance, as well as interviews and visits with CDF and VUP it draws extensively on existing studies of CDF and the PEFA (Feb 2008). The full assessment is in Annex 6.

The following table summarises the key findings of the FRA on the CDF and VUP, together with comments on overall judgement of risk, how best the risks can be monitored, and the existence of credible reforms.

Table 3: Summary of the Fiduciary Risk Assessment

Areas covered by assessment Comments Overall judgement of risk in CDF and Medium to high risk VUP Specific evaluation of corruption risk Perception that corruption is under control and 2005 and 2007 data tend to confirm this. Also evidence exists on action being taken against corrupt officials at all levels of the public service, including local government. Key risks, given analysis General shortage of PFM skills at local levels, especially at Imirenge level; lack of finalisation of CDF vs VUP structures; modalities of cash disbursements under the Direct Support component; over-reliance of the programme on donor contributions. How risks will be monitored Donors will need to harmonise and establish joint programme review mechanisms which will include joint reports and semi- annual programme reviews. TA placed in MINALOC should carry out routine monitoring exercises to ensure that targets are being met. This will also rely on reports from the Internal Auditor. At the local level, monitoring activities of the Sector Joint Action Forum (SJAF) recently approved by Cabinet will

11 form an important component of the overall M&E. The Baseline survey will also assist in measuring progressive programme impact. The PETS, which is expected to be undertaken shortly, will also assist in tracking expenditure to the Umdugudu (village) levels. Existence of credible reforms Yes, both at national (MINECOFIN, and MINALOC) and at CDF and VUP levels. Districts and Imirenge will however continue to require capacity attention, which includes institutional strengthening, e.g. computerisation. Proposed steps to address risks Improvement of data integrity is ongoing. Strict adherence to the Procurement Code. DFID to lead in donor harmonisation and also persuade more donors to commit themselves on-budget. Current PFM training programmes should continue Structural reviews be finalised Financial management manuals be finalised Options for monitoring future PETS, PER and ASP on FRA should be used. Auditor performance General’s reports should also start looking at value for money audits

The CDF and VUP overall risk assessment is therefore judged to be medium to high, with a positive trajectory of change which is underpinned by a credible programme for PFM reforms and a supportive institutional/political context for such reforms. If the safeguards and mitigation measures as detailed in this report are put in place, the programme should be able to manage the high risk elements, and thus ensure the achievement of programme objectives.

2.3 Lessons and Evaluation The 2005 mid term evaluation of the Government of Rwanda public works scheme (HIMO) informed VUP design. Key lessons include: 1) People need to be on a public works scheme for a minimum of 6 months to experience benefits. They need time to save and for training, for a chance to graduate. 2) Public works has most impact when it creates productive infrastructure that benefits the poorest e.g. there has been good success with terracing accompanied by inputs and training and increased access to farming land for the poorest. 3) Beneficiaries must be identified by community members in a public process 4) Public works wages must be communicated to beneficiaries publicly and posted in a public place to stop under payments by local authorities or contractors.

Lesson learning and monitoring and evaluation is critical to the VUP pilot – reflected in the staffing of the VUP Management Team16. Lessons will inform plans for scale up and the broader development of social protection in Rwanda (a specific policy action in the EDPRS results matrix). The VUP will provide important evidence around social protection programmes at scale and what is realistic in terms of graduation.

Linkages with the DFID funded Save the Children UK and UNICEF initiative on measuring the impact of social protection on children17 provides the programme with additional expertise on M&E and a platform for the dissemination of results and lessons.

16 A full time M&E officer and a full time international specialist on M&E. 17 SCUK and UNICEF are being funded by DFID centrally to conduct a 5 year, 6 country study (Rwanda, Kenya, Ethiopia, Mozambique, Malawi) to assess the impact of social transfer programmes on child development outcomes in East and Southern Africa. The overall goal of the study is to contribute high quality evidence to influence policy formulation and to omprove the desing of social transfer programmes that will achieve positive impacts on child well being in particular and poverty rduction for children and their families more broadly. The programme is currently in the design phase – the initial visit to Rwanda was in December the Rwanda Coutnry Report is available in draft.

12 3 IMPLEMENTATION

3.1 Management arrangements DFID will fund VUP directly and track expenditure through the VUP budget line in the Government of Rwanda budget. Currently DFID is the only donor channelling funds directly to VUP. The World Bank is supporting staff and administrative costs both at the national and the Imirenge level through the Decentralisation and Community Development Projects staff. A further $15m over 3 years will be disbursed by the WB through General Budget Support and monitored through the social protection outcomes included in the Common Performance Assessment Framework.

A Memorandum of Understanding (Annex 8) between DFID and MINALOC will form the basis of agreements on funding for VUP. The MoU has been written with a view to other development partners joining the agreement and should form the basis for an eventual transition to a sector SWAp.

The Fiduciary Risk Assessment conducted by DFID in January 2009 sets out the following recommendations that have been integrated into the implementation arrangements: 1) DFID encourage development partner harmonisation around VUP through coordination on VUP and the decentralisation and social protection EDPRS working groups; 2) The VUP TA are expected to monitor developments, give advice on issues as they unfold and prioritise skills transfer to counterpart staff; 3) need to ensure that where VUP fits within the restructured MINALOC is resolved as soon as possible – DFID will conduct an institutional appraisal once we have a decision from MINALOC to identify any possible risks and needs; 4) all participating partners should under exceptional circumstances be able to jointly request special audits of all or part of the VUP expenditures to be conducted at their expense by an internationally accredited firm under the authority of the Auditor General. Annual audit are a must for the rest of the programme; 5) VUP manuals that clearly spell out flow, usage and administration of VUP funds and other resources need to be in place by the end of February 2009; 6) VUP needs its own account and Districts need to open a dedicated VUP account; 7) The training intervention and both District and Imirenge level needs to be strengthened and results orientated with some evaluation done on it to assess impact; 8) Stronger links need to be forged between VUP and Ubudehe; 9) VUP needs to be properly resourced to ensure adequate capacity at the national and local level; 10) The DFID How to Note on Managing Fiduciary Risk associated with cash transfer programmes recognises that cash transfer programmes have inherent fiduciary riks that should be mitigated in the design phase – a follow up Fiduciary Risk Assessment needs to be carried out on all three components of the VUP after 12 months.

The Project Officer and the Social Development Adviser DFID will be responsible for managing the implementation of the programme, supported by cross-cutting advisers.

3.2 Timing This first phase of DFID support will start in February 2009 and end August 2013. Joint annual reviews will asses progress against the agreed indicators.

3.3 Funding:

13 DFID will commit £20 million between February 2009 and February 2013. This is included in the CAP and consistent with the aid framework.

Table 4: Total DFID commitments to the VUP programme18 in millions of pounds 08/09 09/10 10/11 11/12 12/13 5 0 5 5 5

The DFID VUP programme will disburse £19,778,000 million of Financial Aid to the GoR, with £1,052,000 earmarked for Technical Support that will be procured by the Government of Rwanda.

DFID has keep aside a total amount of £222,000 to cover the costs of annual audits (£100,000) and a follow up Fiduciary Risk Assessments (£22,000) and for design costs (£100,000).

DFID also provides £1,395,000 in support to the 3 long term specialists and the short term specialist on institutional reform and decentralisation through existing programmes.

Table 5 shows current costs per Umurenge – these are based on the initial allocations of public works (50%) direct assistance (20%) and financial services (30%). These will change as more detailed targeting and monitoring information, along with agreements on the financial services policy, allow more accurate assessment of needs.

Government has ambitious scale up plan: 30 (2008); 60 (09/10); 90 (10/11); 120 (11/12) and 240 (12/13). However DFID has sought a commitment from GoR that they will not scale up in excess of a 5% funding gap to ensure that the programme is implemented according to the existing framework and procedures.

Existing financial commitment, including DFID’s, and the number of Imirenge this will allow VUP to scale up to are shown in Table 6.

These figures are conservative, we have a verbal commitment from the Ministry of Finance that the World Bank addition to General Budget Support of $15 over 3 years will be reflected as an additional to the VUP budget. Once this is approved we can add this to the budget.

It is expected that when the VUP monitoring system demonstrates development results the resource envelope will increase to allow for more ambitious scale up.

Table 5: VUP costs for 30 Umurenge – i.e. one Umurenge per District Programme Components Cost ($) Direct Transfers 1,893,360

Public Works 4,733,400 Table 6: VUP projected income and scale up 2008/2013 Financial Services2008/2009 2009/2010 ($) 2010/2011 ($) 2011/2012 ($) 2012/2013 ($) ($) 2,840,040 (Jan-June) GoR commitmentTotal Administrative4,777,778 costs (8%) 7,777,778 7,407,407 9,259,259 9,256,259 18 This includes financial aid to the775,344 GoR and technical assistance. Total Expenditure (12 10,224,144 months) 6 months Expenditure (mini 5,112,072 14 budget) WB DCDP Admin 633,000 633,000 0 0 0 Support DFID commitment 7,071,440 7,400,000 7,400,000 7,400,000

Total 5,410,778 15,482,218 14,807,407 16,656,259 16,656,259 commitments No of fully funded Imirenge 31 45 43 49 49 (approx $340,740 per Umurenge)

Exchange rate used: £1= USD 1.48

15 3.4 Operations and Maintenance As the implementation agency for the programme, MINALOC, will meet the Operations and Maintenance costs included in the overall budget calculations.

3.5 Contracting & Procurement: Existing contracts for the 3 long term international specialists and the short term institutional and decentralisation specialist for a cost of £1,395,000 over 20 months will continue to be managed through DFID procurement systems under a different Project component until their contracts finish in September 2009. The long term TA will be managed by DFID and MINLOC using workplans with specific deliverables in addition to this they will all be expected to monitor developments, give advice on issues as they unfold and prioritise skills transfer to counterpart staff. The short term institutional and decentralisation specialist will conduct an in depth institutional appraisal once the new MINALOC structure has been finalised, the appraisal is due to be completed by the 1st of April 2009.

Financial aid will include an agreement to ring fence a total of £1,052,000 for Technical Cooperation to be spent through VUP. DFID will be included in all decision making and procurement processes, along with other development partners supporting VUP. All procurement will conform to Government of Rwanda procedures.

This includes agreements to procure the following:  Short term specialist in social protection to: provide support to effective implementation in line with international good practice; provide analysis of monitoring findings and input into policy revisions; advise on linkages to the broader sector.

 Short term specialist in microfinance to: provide support to effective implementation in line with international good practice; provide analysis of monitoring findings and input into policy revisions; advise on linkages to the broader sector.

There are sufficient safeguards for using Government procurement systems. There is a new Public Procurement Agency, and a framework of regulations that conform with international good practice – already relied on by DFID in other programmes.

DFID will contract all consultants to take forward DFID annual review requirements (in line with VUP monitoring plans) and audits (if GoR is not able to carry out an audit each year) as required for the entire duration of the VUP Programme.

16 3.6 Accounting / Audit Arrangements: Funding is financial aid to the Government of Rwanda. Technical cooperation will be spent through contracts.

The accounting and audit arrangements are in line with core Government of Rwanda systems.

As recommended by the Fiduciary Risk Assessment DFID and other development partners to the VUP should under exceptional circumstances be able to request special audits of all or part of the VUP expenditures to be conducted at their expense by an internationally accredited auditing firm under the authority of the Auditor General.

Annual audits are a must for the life of the programme. Audit costs for the duration of the programme have been estimated at £100,000 for 4 years and kept aside by DFID in case GoR is not able to carry out an audit every year.

3.7 Monitoring and reporting: A credible evidence base on performance and impact evaluation is critical to the plans for scale up and sustainability of social protection interventions in Rwanda.

A VUP M&E system is being designed to ensure this credible evidence base. DFID is funding the M&E specialist in VUP who is working with the national monitoring and evaluation officer to design and implement a rigorous monitoring and reporting system. DFID will not set up any separate monitoring systems for this support.

The VUP M&E system is built around a core set of indicators on impact, outputs and activities/inputs. A first baseline survey has been conducted with the assistance of the National Institute of Statistics in Dec 2008. A EICV19-type questionnaire has been filled across a sample of 120 households per Umurenge (sector) in 10 VUP sectors and 10 non-VUP sectors. In addition, a community questionnaire has been completed in approximately 50 VUP cells and 50 non- VUP cells.

A monitoring survey with a lighter household questionnaire but same community questionnaire will be conducted annually to measure progress against the indicators in time to inform the EDPRS annual reviews (September). Five of the VUP indicators are included in the Common Performance Assessment Framework used to measure progress against budget support.

The baseline information, targets and milestones have been set using the initial targeting information from the VUP along with a set of assumptions ( that new Imirenge will be less poor, graduation rates, average size of Imirenge). However the accuracy of the data will be significantly improved upon once information

19 National Household Living Conditions Survey – conducted nationally in 2000 and 2005 17 from the baseline and the monitoring systems is in place. More accurate data will be available by June 2009.

The VUP M&E system under development will be reviewed annually as part of the annual joint review of the social protection sector.

4 RISK ASSESSMENT

Eleven non-fiduciary risks to the programme have been identified. These relate to factors fundamental to the success of the programme such as government political and financial commitment, development partner support, political instability, and poverty targeting. A full statement of the risks and risk analysis are presented in Annex 2. The following table, which denotes each risk by a number (1-11) as detailed in Annex 2, summarises the risks in terms of their likely probability and impact.

Table 7: Risk Assessment

Probability Low Medium High Impact Low 5, Medium 7 8,9 High 1,2,4 3,6,10,11

This assessment indicates that the VUP Initiative is high risk (4 risks fall in the medium probability, high impact category). However this is a level of risk that may be considered acceptable given the developmental impact and enhanced domestic stability that can be expected if the initiative is successful. There are no “killer” risks that have both high probability and high impact. All risks will be monitored and regularly re-assessed by DFID as part of its monitoring process.

5 Conditionality

1. The Department of International Development in Rwanda commits, where practical and in accordance with the policy of our Government, to:  Align and harmonise planning, performance monitoring and reviewing activities as much as possible with those processes established in the VUP.  Harmonise policy dialogue, consultation and information sharing.  Support an aligned approach to capacity building  Disburse funds in a timely manner, matching the agreed commitments specified in the budget and the annual operational work plan  Plan, negotiate and implement future initiatives or new programmes regarding support to the social protection sector in cooperation with GoR and other Partners.

18 2. The Government of Rwanda commits, where practically possible and in accordance with general GoR policy, to:  Manage policy reviews, planning and reporting on implementation and monitoring results with development partners through one regular, shared forum.  Be transparent and coordinated in the negotiation of any new funding to VUP through the one shared forum.  Provide indicative forward financial commitments for the period of the MoU.  Scale up in line with the resource envelope (the funding gap should not exceed 5%)  Ensure clarity of additional contributions from Development Partners to VUP disbursed through General Budget Support.  Procurement of the technical assistance provided for in this agreement will be agreed jointly between Government and DFID and include consultation with other Development Partners.  Implement VUP in accordance with the operational framework and procedures and make revisions through a formal approval process that includes consultation with development partners.

3. Collective responsibilities (these should form a base for all development partners support to VUP – that needs to be negotiated and agreed with all incoming partners) :  Fund activities related to objectives as defined by the EDPRS Flagship Programme Document on VUP and the Operation Framework and Procedures.  Ensure policies are consistent with national development plans as expressed in Vision 2020 and EDPRS  Harmonised systems for information sharing and reporting – in line with the EDPRS monitoring and evaluation framework.  Manage future development assistance using existing structures as far as possible in order to reduce transaction costs and improve sustainability  Carry out meetings, deliberations and communications between GoR and Partners with mutual respect  Carry out reviews and audits at agreed intervals

19 ANNEXES

Annex 1 Logical Framework Annex 2 Risk Analysis Annex 3 Consultation record Annex 4 Environmental screening note Annex 5 Assurance checklist Annex 6 Fiduciary Risk Assessment Executive Summary Annex 7 Detailed Appraisals: economic, social, environmental Annex 8 Memorandum of Understanding Annex 9 Policy details: direct support, public works and microfinance

20 PROJECT TITLE Vision 2020 Umurenge – Government of Rwanda social protection programme GOAL Indicator Baseline + year Milestone 1 Milestone 2 Target + year To reduce extreme Percentage of 36.9% (2006) 30% (2010) 24% (20012) poverty levels in population living below Source Rwanda extreme poverty line EICV household survey – National Institute of Statistics

Indicator Baseline + year Milestone 1 Milestone 2 Target + year Gini coefficient 0.51 (2006) 0.4 Source EICV household survey – National Institute of Statistics

PURPOSE Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions Social protection Percentage of 36.9% (2008) 30% (2010) 24% (2012) Governments continued programme reduces households living below (to be confirmed political and financial extreme poverty in the extreme poverty line in from baseline) support. targeted VUP Imirenge targeted VUP Imirenge Source VUP baseline collected by National Institute of Statistics – data available May 200920 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Poverty depth in 40% (2008) targeted VUP Imirenge (to be confirmed from baseline) Source VUP baseline collected by National Institute of Statistics – data available May 2009

20 The baseline information, targets and milestones have been set using the initial targeting information from the VUP along with a set of assumptions ( that new Imirenge will be less poor, graduation rates, average size of Imirenge). However the accuracy of the data will be significantly improved upon once information from the baseline and the monitoring systems is in place. More accurate data will be available by June 2009.

21 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Risk Rating Number of people 17,150 (2008)) 36,851 (2010) 41,993 (2012) 41,99321 (2013) LOW directly assisted by Source social assistance programmes VUP baseline collected by National Institute of Statistics – data available (DFID standard May 2009 indicator) INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

19,865,608 20,163,333 873,540 40,902,481 49% INPUTS (HR) DFID (FTEs) SDA 0.5 Project officer 0.3

OUTPUT 1 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions Extremely poor Number of households 17,150 (2008) 26,316 (2010) 29,988 (2012) 29,988 (2013)22 Targeting ensures that the households have access performing public works Source right groups benefit from to public works in the programme. targeted VUP Imirenge VUP M&E collected by VUP programme Indicator Baseline + year Milestone 1 Milestone 2 Target + year Funding reaches the beneficiaries and is used Percentage of eligible 0% (2008) 35% (2010) 35% (2012) 35% (2013) for the purpose intended. households performing public works Source VUP M&E collected by VUP programme

21 Current projections are based on the cost of implementation per Umurenge and the number of beneficiaries supported per Umurenge based on implementation to date. The baseline survey and the current work on designing a quality monitoring system may lead to some adjustments to the current milestones and targets. Information based on a more credible evidence base will be available in May 2009

22 The projections are based on current implementation and may change in light of the baseline survey and new monitoring data available in May 2009.

22 IMPACT WEIGHTING Indicator Baseline + year Milestone 1 Milestone 2 Target + year 30% Public works 0% (2008) 60% (2010) 80% (2012) 100% (2013) implemented in Source RISK RATING accordance with international good VUP M&E collected by VUP programme MEDIUM practice in respect of23: wage rate; community selection of projects; voluntary savings; direct payment of clients; environmental protection. INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

9,138,180 9,275,133 401,368 18,815,141 49% INPUTS (HR) DFID (FTEs)

23 As set out in the VUP framework and procedures for public works

23 OUTPUT 2 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions Relevant and Number of operational 0 Public works selection operational community community assets by Source and implementation leads assets in place category (watershed, to outputs that are useful agro forestry, roads VUP M&E collected by programme to the community in the ect…) long term. Indicator Baseline + year Milestone 1 Milestone 2 Target + year Size of population 0 served by community assets24 Source VUP M&E collected by programme IMPACT WEIGHTING Indicator Baseline Milestone 1 Milestone 2 Target (date) 5% Source RISK RATING MEDIUM INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

INPUTS (HR) DFID (FTEs)

OUTPUT 3 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions Extremely poor Number of households 6,860 (08/09) 10,535 (2010) 12,005 (2012) 12,005 Targeting ensures that households assisted receiving direct (2013)25 the right groups benefit

24 25 The projections are based on current implementation and may change in light of the baseline survey and new monitoring data available in May 2009.

24 through direct support support. Source from the programme. VUP M&E collected by programme Funding reaches the Indicator Baseline + year Milestone 1 Milestone 2 Target + year beneficiaries and is used Percentage of eligible 0% 60% 80% 80% for the purpose intended. households receiving direct support Source VUP M&E collected by programme IMPACT WEIGHTING Indicator Baseline Milestone 1 Milestone 2 Target (date) 30% Direct support 0 60% 80% 100% implemented according Source RISK RATING to international good practice in respect to: VUP M&E collected by programme MEDIUM transparent targeting system; predictable payment. INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

OUTPUT 4 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions People, including those Number of people Savings and credit from extremely poor accessing savings Source services are accessed by households, access the extreme poor. savings and credit VUP M&E collected by programme Indicator Baseline + year Milestone 1 Milestone 2 Target + year Number of people

25 accessing credit Source VUP M&E collected by programme IMPACT WEIGHTING Indicator Baseline Milestone 1 Milestone 2 Target (date) 30% Policy applied in 0% (2008) 60% (2010) 100% (2013) accordance with Source RISK RATING international good practice with reference VUP M&E collected by programme LOW to: INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

OUTPUT 5 Indicator Baseline + year Milestone 1 Milestone 2 Target + year Assumptions Institutional Full complement of 100% The new positioning of strengthening to ensure staff in place at Source VUP within MINALOC effective and national and local level. increases administrative sustainable delivery of VUP M&E collected by programme efficiency and the VUP programme Indicator Baseline + year Milestone 1 Milestone 2 Target + year accountability. Internal controls in place in accordance with framework and Source procedures, including VUP M&E collected by programme FRA recommendations. IMPACT WEIGHTING Indicator Baseline Milestone 1 Milestone 2 Target (date) 10% Institutional architecture ensures Source RISK RATING

26 efficiency and VUP M&E collected by programme MEDIUM accountability INPUTS (£) DFID (£) Govt (£) Other (£) Total (£) DFID SHARE (%)

27 28 ANNEX 2: RISK ASSESSMENT

Risk Impact Probability Mitigation High: Low: 1. Withdrawal of The whole programme is VUP is a Need for Government’s built on an agenda primary pillar of continuing Political support shared by GoR, and the EDPRS dialogue to VUP and DFID, that social (PRSP). between HMG social protection protection is central to Removal of and GoR to the development political ensure that this process, and follows support would commitment from clear policy involve a remains central statements set out in the dramatic u- to the agenda, EDPRS. It is difficult to turn. and is delivered see how the programme upon. could continue in the way envisaged without this. High/Medium: Low/Medium: 2. Financial Our support to VUP is The main The partnership commitment by predicated on being a pressure that underpins Government of partner to GoR, and affecting this this project Rwanda to VUP augmenting GoR support will be the (including the dwindles (both political and colossal shared vision) financial) to facilitate challenge needs to be part operations. If this is funding the of ongoing withdrawn, or even EDPRS. But HMG/GoR lessened, then the currently GoR dialogue. HMG impact on the project is has delivered may also seek potentially significant. on financial assurances This is particularly true if commitments from ambitious scale-up plans for VUP and MINECOFIN are taken forward without began its pilot concerning sufficient resources, with funding future projected resulting in finances from domestic support for being spread too thinly. revenue. VUP. The current global Credible downturn increases this monitoring risk. showing impact. High: Medium: 3. Development Current projected There is Early success partner support shortfalls against scale- currently some stories from insufficient to up plans are currently scepticism in VUP (during the properly roll-out material, and full roll-out the donor initial stages of the programme of VUP will be dependent community DFID funding) on there being funding about the should help to from a number of ambitious roll- allay donor sources. Without this the out plans for concerns and 29 Risk Impact Probability Mitigation effective roll-out of the VUP, and the garner support. programme will not be programme’s Credible possible. nature. monitoring showing impact. High: Low: 4. Country Instability internally Country Save dialogue, becomes would have a lasting currently HMG has little politically impact on project, stable, mitigating role unstable particularly if conflict although there to play here. through internal results is underlying shocks fragility. Economic growth and poverty reduction contributing to stability and increased inequity. Low: Medium: 5. Country Depends on magnitude, Region subject HMG to keep becomes but even if there is to fluctuating regional politically regional conflict there is stability, but development s unstable a high chance that current in view through internally it will be situation in external/regiona ‘business as usual’. DRC is a l shocks concern. High: Medium/Low: 6. Poor targeting Success of the Targeting Safeguards results in programme, particularly draws heavily need to be in incorrect target in respect of the on ubudehe place to assure groups reduction in the number processes the quality of benefiting from of poor households, is (and ubudehe the programme, heavily dependent on the household targeting right households categorisation) processes, e.g. receiving support. , and is by ensuring that participative. Joint Action But some Development aspects of the Fora perform a approach are challenge new and there function at will be a need umurenge level, for continual and by ensuring reinforcement. that the VUP Management Unit in CDF performs occasional 30 Risk Impact Probability Mitigation comparative analysis. M&E will help show how effective targeting mechanism is  whether most vulnerable being reached  whether targeting criteria need to change Medium/High: Low: 7. Funding will The effectiveness of the There is zero- Progress/impact not reach project could potentially tolerance to assessment intended be significantly reduced if petty part of M&E recipients or will corruption proved a corruption on process. be used for problem. the part of Activities purposes other GoR, and it is subject to GoR than intended not a common internal and due to phenomenon. external audit corruption. Rwanda processes, and scores highly will need robust in regional routine internal assessments controls. of corruption risk. 8. Funding will Medium Medium Low: Safeguards not reach The effectiveness of the This risk could need to be in intended project will be reduced if increase place to assure recipients or will households that are not during the quality and be used for eligible are targeted for 2010 elections. accountability in purposes other political gains. targeting. than intended due to political clientism. 9. Positioning Medium/High Medium/High Clear VUP within the VUP management of These risks are agreements on Community budgets and staff is a known and systems for Development made less efficient or ongoing VUP will be set Fund worse decreases the quantity. out in an MoU compromises quality of VUP MINALOC with MINALOC administrative management systems. want VUP to on VUP efficiency and Accountability for be managed management accountability of finances and through CDF – structures VUP. performance is their view is 31 Risk Impact Probability Mitigation decreased due to the that dual accountability weaknesses in structures for VUP. CDF should be sorted out rather than creating new funding channels.

Medium: Medium: 10. Impact of The impact of this could Turnover is an Profile of VUP programme be significant, as quality issue in all might rise as impeded by high of implementation is aspects of the programme staff turn-over highly dependent on public service develops, (particularly quality of staff and their in Rwanda, incentivising amongst key expertise particularly in work somewhat. personnel at the wake of But other umurenge level) private sector possible and/or by poor growth. The mitigating action capacity fact that staff (e.g. salary key to VUP enhancements implementation funded by are often donors) not required to live recommended and work in at present. remote areas compounds Issues of the problem. capacity can be Staff members addressed by at umurenge staff training. level are new VUP to the management programme unit has to and new to the ensure that public service, training and it is not programmes clear that will be rolled capacities are out. in place. 11. Unrealistic High: Medium: assumptions Project purpose will not This is Robust M&E about be met if households something of systems should graduation lead (some, not all) are an ‘unknown’ , provide early to large and unable to graduate from as it is not yet indicators increasing extreme poverty. Likely clear what is around numbers of result is that some donor needed to graduation, and households on support will reduce, graduate in might contribute 32 Risk Impact Probability Mitigation direct support leaving GoR with the Rwanda. + to a process of (through scaling task of funding direct some won’t refocusing the up period), transfers themselves (or programme if raising withdrawing completely – necessary. questions of which may not be programme politically tenable) sustainability. High: Medium: Unrealistic If implementation is too Scale-up plans Assurances are assumptions quick there will be issues are ambitious to be sought around scaling of both human resources and will only from up of and financial resources, be tenable if MINECOFIN programme resulting in too few increased that if DFID (from 30 pilots resources spread over resources are resources are to to full too large an area, and available, both be channelled implementation reduction in efficiency of from internal in to the across 416 government/development sources and programme imirenge) lead to expenditure/. from they need to be poor resource development complemented distribution and partners. by internal lack of and/or other programme resources that sustainability. together will ensure at least 75% of total projected programme spend.