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Rwanda Systematic Country Diagnostic

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Rwanda Systematic Country Diagnostic Document of the World Bank Report No. 138100-RW Public Disclosure Authorized Rwanda Systematic Country Diagnostic Public Disclosure Authorized June 25, 2019 International Development Association Country Department AFCE2 Africa Region Public Disclosure Authorized International Finance Corporation Sub-Saharan Africa Department Multilateral Investment Guarantee Agency Public Disclosure Authorized Rwanda – Government Fiscal Year July 1 to June 30 Currency Equivalents (Exchange rate as of June 18, 2018 Currency unit = Rwanda Franc (RWF) US$ 1.00 = RWF 905.4 Acronyms ABTs Alternative building technologies AGI Adolescent Girls Initiative BNR National Bank of Rwanda CIAT International Centre for Tropical Agriculture). CPF Country Partnership Framework CPSD Country Private Sector Diagnostic DHS Demographic Health Survey DIME Development Impact Evaluation DRC Democratic Republic of Congo DS Direct Support DSA Debt Sustainability Analysis EAC East Africa Community EDPRS Economic Development and Poverty Reduction Strategy EICV Integrated Living Conditions Survey ELA Empowerment and Livelihood for Adolescents FDI Foreign Direct Investment GBE Government Business Enterprise GBV Gender Based Violence GDP Gross Domestic Product GGCRS Green Growth and Climate Resilience Strategy GNI Gross national income GNU Government National Unity GoR Government of Rwanda HAP Household air pollution HCI Human Capital Index HCP Human Capital Project HIV/AIDS Human immunodeficiency virus infection and acquired immune deficiency syndrome ICT information and communication technology IDA International Development Assistance IFC International Financial Corporation IFMIS Integrated Financial Management Information and System IFRS International Financial Reporting Standards IMF International Monetary Fund ISIC International Standard Industrial Classification i KCC Kigali Convention Centre LFS Labor Force Survey MDG Millennium Development Goal MICE Meetings, International Conferences and Events MIDIMAR Ministry of Disaster Management and Refugee Affairs MIGEPROF Ministry of Gender and Family Promotion MINAGRI Ministry of Agriculture MINECOFIN Ministry of Finance and Economic Planning MINICOM Ministry of Trade and Industry MTEF Medium-term Expenditure Framework NAIS National Agriculture Insurance Scheme NAPA National Adaptation Programmes of Action for Climate Change NCDs Noncommunicable diseases NDC Nationally Determined Contributions NDVI Normalized Difference Vegetation Index NISR National Institute of Statistics of Rwanda NTBs Non-tariff barriers ODA Official development Assistance OECD Organization for Economic Co-operation and Development PFM Public Financial Management PIM Public Investment Management PSTA Strategic Plan for the Transformation of Agriculture PW Public Work RAB Rwanda Agricultural Board REMA Rwanda Environment Management Authority RICA Rwanda Inspectorate and Competition Authority RMF Road Maintenance Fund RPA Rwandese Patriotic Army RPF Rwandese Patriotic Front RSSB Rwanda Social Security Board Rwf Rwandan Franc SCD Systematic Country Development SDGs Sustainable Development Goals SEZ Special Economic Zone SOCEs State-owned or state-connected companies SOEs State-owned enterprises SPCR Strategic Program for Climate Resilience SSA Sub-Saharan Africa TFP Total Factor Productivity US$ United States dollar USAID U. S. Agency for International Development WBG World Bank Group WDA Workforce Development Authority WDI World Development Indicators WEF World Economic Forum WGI World Governance Indicators WRM Water resource management ii IDA IFC MIGA Vice President Hafez M. H. Ghanem Sérgio Pimenta Keiko Honda Country/Regional Director Carlos Felipe Jaramillo Jumoke Jagun-Dokunmu Merli Margaret Baroudi Country Manager Yasser El-Gammal Manuel Moses Task Team Leaders Aghassi Mkrtchyan Dan Kasirye Jessica Charles Wade Aparajita Goyal Sudha Bala Krishnan Hamidou Sorgo iii ACKNOWLEDGEMENTS The Systematic Country Diagnostic (SCD) was prepared by a core team consisting of Aghassi Mkrtchyan (Senior Country Economist, GMTA3), Aparajita Goyal (Senior Poverty Economist, GPV01), Dan Kasirye (Resident Representative, CAFRW), Sudha Bala Krishnan (Operations Officer, CCECE), Hamidou Sorgo (Senior Private Sector Specialist, GFCA1), Jessica Charles Wade (Senior Risk Management Officer, MIGEC), and Marc Stephens (Consultant). The team gratefully acknowledges the overall guidance of Carlos Felipe Jaramillo (Country Director, AFCE2), Albert Zeufack (Chief Economist, AFRCE), Jumoke Jagun-Dokunmu (Director, CAFEO), Hoda Atia Moustafa (Head, MIGAF), Yasser El-Gammal (Country Manager, AFMRW), Manuel Moses (Country Manager, CAFE1), Abebe Adugna Dadi (Practice Manager, GMTA3), Pierella Paci (Practice Manager, GPV01), Vinaya Swaroop (Economic Adviser, AFRDE), Trichur Balakrishnan (Country Program Coordinator), Johan Mistiaen (Program Leader, EFI), Helene Rex (Program Leader, SD), Paolo Belli (Program Leader, HD), Allen Dennis (Program Leader, EFI), and Philip Schuler (Lead Economist, GMTA3). The list below identifies GP focal points and team members that have provided inputs to the SCD. The peer reviewers were Emmanuel Skoufias (Lead Economist, GPV01), Errol George Graham (Program Leader, AFCW1) and Nicole Klingen (Country Program Coordinator, AFCET). Team assistance of Agnes Yvonne Masaka (Team Assistant, AFCE2), Nancy Umwiza (Office Assistant, AFMRW), and Karima Laouali Ladjo (Program Assistant, GMTA3) is highly acknowledged. Position Unit NameAlex Kamurase of Staff Member Senior Social Protection Specialist GSP01 Baba Ali Mwango Consultant GPV01 Brice Gakombe Financial Sector Specialist GFCAE Daniel John Kirkwood Gender Specialist AFRGI Casey Torgusson Senior Operations Officer GDD11 Emiko Todoroki Senior Financial Sector Specialist GFCAE Emmanuel Taban Highway Engineer GTR01 Fiona Jane Messent Consultant GFALW Gael Raballand Lead Public Sector Specialist GGOAE Hamidou Sorgo Senior Private Sector Specialist, (IFC co- team leader) GFCA1 Heba Shamseldin Lead Private Sector Specialist GMTCI Iftikhar Malik Senior Social Protection Specialist GSP01 Ignace Rusenga Mihigo Bacyaha Principal Country Officer (IFC) CAFE1 Irina Schuman Senior Agriculture Economist GFA07 Jessica Charles Wade Senior Risk Management Officer, (MIGA co-team leader) MIGEC Joern Torsten Huenteler Energy Specialist GEE01 Kazi Fateha Ahmed Environmental Specialist GCCRA Laura B. Rawlings Lead Social Protection Specialist GSP01 Lewnida Sara Operations Analyst GWA01 Matthew Stephens Senior Social Development Specialist GSU07 Miriam Schneidman Lead Health Specialist GHN01 Moritz Nikolaus Nebe Sector Manager (MIGA) MIGEC Narae Choi Senior Urban Development Specialist GSU13 Nicoletta Feruglio Senior Public Sector Specialist GGOAC Norah Kipwola Senior Energy Specialist GEE01 Pablo Cesar Benitez Senior Environmental Economist GENA1 Peace Aimee Niyibizi Economist GMTA3 Rogers Kayihura Communications Officer AFREC Ruth Karimi Charo Senior Education Specialist GED01 iv Shohei Nakamura Economist GPV01 Silas Udahemuka Human Development Specialist GSP01 Sudha Bala Krishnan Operations Officer (IFC co-team leader) CCECE Tania Priscilla Begazo Gomez Senior Economist GMTCI Winston Dawes Senior Agriculture Economist GFA07 Xiaoyue Hou Consultant GFALW Yadviga Viktorivna Semikolenova Senior Energy Economist GEE01 Semikolenova v CONTENTS Acknowledgements ..........................................................................................................................................iv Executive Summary .........................................................................................................................................ix Introduction ...................................................................................................................................................... 1 1. Country Context ....................................................................................................................................... 2 A. Historic Context and Genocide ............................................................................................................... 2 B. Developments after the Genocide ........................................................................................................... 3 2. Growth, Poverty Reduction, and Institutions ........................................................................................ 5 A. Growth, Productivity, and Structural Transformation ............................................................................ 5 B. Poverty and Shared Prosperity ............................................................................................................. 12 C. Vulnerability to climate change and environmental degradation ......................................................... 22 D. Governance and Institutions ................................................................................................................. 24 3. Constraints and Pathways to Achieving the Twin Goals .................................................................... 26 A. The Analysis ......................................................................................................................................... 26 B. Investing in Human Capital .................................................................................................................. 27 C. Market and Private Sector Development .............................................................................................. 35 D. Investing Sustainably ...........................................................................................................................
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