2020

POLICY BRIEF Developing Rubavu District Findings from a Multidimensional Analysis

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SUMMARY Secondary cities matter a lot in the provision of a more balanced sustainable urban growth for . Stimulating urbanisation through the secondary city agenda is expected to create jobs and reduce poverty. These cities have a potential to act as poles of growth and relieve the pressure on , which currently dominates the Rwandan economy. With an eye on the Government’s target to achieve an urbanisation rate of 35% by 2024, IPAR-Rwanda has conducted an in-depth analysis of the opportunities which are offered by secondary cities and the challenges which they face. The current policy brief intends to provide information and guide deliberations on the development and strengthening of Rubavu district in the Western Province. Rubavu is an international gateway city located near the border city of in the Democratic Republic of Congo (DRC), and it is considered as a hub for tourism and industry. In terms of actual past growth rates, Rubavu district has had the highest GDP growth rate among secondary cities, averaging about 11% in the last 7 years. The challenge facing Rubavu is that it becomes more difficult to achieve marginal growth given such high growth rates. Therefore, the administration and other private stakeholders need to think innovatively in order to come up with new sources of growth. Given that the district is urbanized at a rate of 42% but still depends on agriculture, economic policy and infrastructure planning needs to be tailored to its increasing market opportunity through rural-urban and cross-border linkages. This can be done by promoting urban density, building on its strategic position as a tourist and business hub because it accommodates tourist areas such as and hot springs. Besides, Rubavu is a city with a vibrant trade boarder known as “La Petite barrière”. Other key development sectors in Rubavu include wholesale and retail trade, construction, and transport and storage. Policy Brief 1 cities The visionfor secondary A. Introduction: B. AboutRubavu B. IPAR -2020 6 5 4 3 2 1 and tramline) and beryl (coltan, wolfram, mining cassiterite, etc...), springs/amashyuza hot financial Kivu, (Lake tourism include insurance), (finance, services Rubavu in sectors Other important DRC. with trade cross-border and trade, agriculture, small-scale fishing, casual labour, retail subsistence of mix a to due life of quality decent 36% and Province. 20% are centers Western urban in rates Poverty the The 403,662 in and located km2 388 inhabitants of district a is Rubavu In order to unlock the potential of secondary cities, pressure onKigali, thecountry’s economic hub. the reduce to also country, but the of geography cities secondary were six selected not only to transform the economic These urbanisation. accelerate and their promote to order in Muhanga, and Nyagatare, Rusizi, Huye, Musanze, Rubavu, namely cities, secondary six for plan master new a of development the others, among comprise, These place. in put been have urbanisation guide to pillars key development, sustainable towards 2024 (NST-1), which is the national leading strategy 2017- programme Government years 7 the From human and areas urban settlements for local economic growth of through reinforcement whilst development a resources sustainable natural promoting its and of use efficient tomanagement lead to expected also activities is asIt off-farm such sectors productive of the local residents through the creation of more conditions socio-economic improve to expected 18%. current the from by 2024, 35% its reach to set target urbanisation has country the end, this To future. the for urbanisation its master and plan to measures The Government of Rwanda has put in place strong EICV5,authors calculations. Retrieved from http://www.rubavu.gov.rw/index.php?id=72 Government ofRwanda. (2017).7Year Government Programme: National Strategy for Transformation (NST 1),2017–2024. TheWorld Bank.(2019)Future Drivers ofGrowth: Summary.. Data presented inthisbrief comes from IPAR-Rwanda survey conducted inMarch-April specified. 2019,unlessotherwise Republic ofRwanda, 2017.7Year Government Programme: National Strategy for Transformation (NST 1),2017–2024. 5 overall. People in Rubavu have a modest to modest a have Rubavu in People overall. 2 This urbanisation trajectory is trajectory urbanisation This 4 . 3 5 .

1%. oprd o te scnay cities, secondary other to Compared manufacturing (11%). and (33%) services workers), of Employment is distributed across agriculture (56% 2031. in 300,000 to increase (EICV5) to projected is 2017 and in 190,000 reached Employment Rubavu district is urbanised at a rate of 42% (EICV5). labourers andtraders daily. which currently serves a large population barrière, of casual petite the across DRC to produce their main economic activity in the district. Farmers sell the However,remains manufacturing.agriculture Government’s vison for secondary cities, Section cities, secondary for vison Government’s the briefly described A Section sections: five up for support made is It goal. and this reach to sectors opportunity growth bottom-up create to workforce of approach an investmentsand strategicdevelopment, planning out sets brief This specific opportunities. its and reality economic its tailoredto be to need investments these grow, to city secondary each fororder In region. the in marketsRwandaand in local with connections developing and linkages rural-urban strengthening mobility, and density increasing market access through improving urban and attract foreign direct investment (FDI) and (iii) environmentenabling to local support businesses services an creating (ii) force, work productive more health a for and education through capital human developing (i) growth: cities’ secondary IPAR-Rwanda has identified three key priorities for each category of challenges. for recommendations policy E provides Section while city the for challenges of categories three D presents study, Section the information for the of and sources Rubavu, methodology is about C of Section characteristics general provides B 1 Policy Brief 2 D. Methodology C. IPAR -2020 Challenges faced by Rubavu District and sources ofinformation l oe te itit n (i) h ves f key future drivers ofdevelopment inthedistrict. of onthe views people the business and (iii) citizens informants, and from district of businesses the over a set all of expectations and characteristics current different (ii) district, the the of sectors from households representative of set a socio- of preferences the current and status the economic (i) aspects: three outline to commissioned was analysis this cities, secondary for process March planning master the of of part in As 2019. District analysis Rubavu by the across data collected IPAR-Rwanda on quantitative builds and qualitative brief policy This 7 through addition value and sectors extractives in as such investment workforce larger-scale productive for the needed form and business own their maintain and ability establish to areduced workers of longer-term mean These problems sectors. educational other than better exist Disparities the districtwithin Nyundo sector with performing diploma deficit. school skills a large primary indicating a maximum at have 71% Presently, Human capital ih R ad n ls poiiy ih Musanze, with proximity close in and DRC with border the strategicallyon locatedalso is Rubavu sector. agriculture its and trade sector, cross-border its tourism its size, market large relatively its of realities and the consider city to needs the district the of development the for Planning create more jobopportunities. to need urgent an is there beyond, and 2031 by increase population high to a with grow, continues potentially city the As growth. sustainable are of which sectors services growingfaster.much positivevery in terms is This and trade largest and sector agricultural smallest the has Rubavu IPAR-Rwanda survey, March 2019 7 f oshl has n Rubavu in heads household of civil society representatives and high-profile and representatives society civil directors, technical members, (PSF) Federation sector private leaders, district include latter The interviewed. informants key and businesses surveyed 200 were and households 1,240 total, In higher learning institutions, namely the Kigali University the and (ULK) University Independent namely institutions, the creation 2 learning colleges, higher TVET from eight with of all levels, development levels and/or tertiary at to primary attainment educational increasing in progress been has there Recently, Rubavu. in poor very as labour talentedreported them of 72% and challenge a being as skills management identified them of 64% Rubavu: in businesses by known well are difficulties These manufacturing. urbanisation. on works research other of number a and 2012, of census housing and population national fourth the and surveys EICV5 and EICV4 from datasets 2018-2024), (DDS: Strategy Development District were documents reviewed: Different the national urbanisation policy, Rubavu owners. business logistics andmanufacturing activities. investmentdevelopand (FDI), linkages other with direct foreign and local attract to order in sector mining artisanal the develop to opportunity an is low. This very still is sector this in employment are found in Nyamyumba and Kanama sectors but Moreover, cassiterite, centre. and wolfram coltan, as such trade minerals a cross-border as, over well time, as sectors, these in opportunities tourism and a trade hub, building on employment Rubavu hence offers great opportunities to act as a trade andapotential to expand manufacturing. of levels high with corridor economic an creating Policy Brief 3 IPAR -2020 population living within 5km of a health center. of a the 5km of 87% within living with population from health posts, 8 health 10 , benefitted and of centers hospital District has one has now district sector Rubavu investment; infrastructure health The sectors suchastourism andhotel services in service low skills to contributes this addition, In DRC. in education obliged seek to border the sometimes cross to are Rubavu from of Rwandan students majority the situation, this to Due institutions. learning higher and schools technical is still facing challenges including a low number of Studies Business and (UTB). However, education provision in Technology the district Tourism of for Savings and Credit Cooperatives - SACCO), Cooperatives Credit and Savings for 24% to up (rising 18% and 17% between ranging the as ratesinterest incurring capital, of loans source primary bank commercial using businesses reported the of (30%) to percent Thirty hindrance growth. greatest the as finance to access identified surveyed were which businesses The infrastructure inthe industrial zone. the form of a land bank for future use and develop the industrialisation, of district is still looking for funding levels to acquire land in low With (FDI). expansion and to attract foreign direct investment yet conducive enough to support the local businesses not is Rubavu in environment business The Business environment 2050, by people straining thecurrent infrastructure. 420,000 reach to population expected city is the businesses. as increase and will risks residents These prospective of the to city attractiveness the undermine and risks health public increase to likely of is lack infrastructure This hill. Rubavu on system: site unmanaged in seweragean dumped is center central city the in a collected waste or site disposal waste solid and improved no is there Nowadays, inGisenyiservices town. health seek to trip) round (a km 20 travelaround to have sector Nyamyumba from people of 35% that revealed analysis The hospital. District the to transferred when treatment medical seeking distances long travel still people some However, which often have to incur a loss in the interim. in loss a to incur have often which businesses, small-scale for challenge a presents different of acquiring quality standard certificates can be lengthy, which process the addition, In (SEZ) hasnotyet beenset upinRubavu District. Zone Economic Special the though process, the improved currently for has which The system permits, awarding new lengthy. a and introduced has expensive Government is investors and or expropriation landowners between transactions direct through government through either land, purchase to process The poor). very being as ranked was process (the challenges main the oneof being as of land acquisition 96% identified firms need, environmental business the For income. and increase jobs create to potential their back from holds which firms loan, the back paying and expanding and businesses domestic prevents financing affordable accessing in challenges Such capital. finance of source primary the as savings while 33% of businesses reported using household businesses. In addition, unaffordable housing unaffordable addition, In businesses. surveyed the of 83% by poor very as ratedwas it large compared to those in other secondary cities, relatively is Rubavu of size market the Although Catalysing markets andimproving access to thecost ofwater andelectricity. regard with satisfaction of level low a pinpointed compared to the market demand. The survey also production lower in resulting machinery, heavy its support cannot which electricity, single-phase the use to has company small notable a instance, and hotels in industry, For District.Rubavu sectors within manufacturing investors affect which a and shortage of water increase the cost others) of production, and (Nyamyumba electricity areas phase some of three in lack the addition, In on smallformal businesses. at them putting prices, sell cheaper then pressure can costlowerand a productsat producessimilar sector accounts informalfor 94% of the economy This and often businesses. formal small is by which faced sector isthe informal the from reported competition challenge significant Another Policy Brief 4 E. Policy IPAR -2020 recommendations informal settlements in the periphery of the city the of periphery the in settlements informal build or buy a new house. This pushes people into to order in save to capacity the have not do they rent swallows 42% of their income and, therefore, them, For month. per 40,000 RWF to up earning Rubavu of population the of 55% poorest the for astute particularly is This sprawl. urban an create to potential a and power purchasing also affects individuals’ for housing Unaffordable opportunities creation. job creating supply, labour and power purchasing a concentrated from benefit businesses which through effects agglomeration create environments urban Such environments. undermines the process of promoting dense urban the development of the sector and make it part it make and sector the of development the in agriculture support should Government on the district, Rubavu dependence high Firstly, the businesses. given international and local for There is a need to boost investment opportunities 2. industry, tourism andservices. through achieved in sectorsgrowthforespecially funding increased be vocational could existing This and programmes. TVETs of FDI. number increase the attract should Government and the Additionally, growth business stimulate productivity, boost to order and in development skill programs to in training needs investment Government prioritise of the level low education, a formal have workers most that Given 1. and the challenges by addressing Rubavu’striggering sustainable growth: potential, Rubavu’s tounlock expected are recommendations sets three of following The levels. local and central at both responsibilities of definition clear a as well instruments and the governance architecture. It requires prioritisation across government programs as Secondary cities development involves a number of actors/stakeholders and has implications to financial markets anddevelopment ofhumancapital at alllevels. ready to access of improvement environment, business favorable a of creation the through achieved approach tailored to the unique opportunities and challenges of the district. The district growth can be To accelerate the sustainable economic growth in Rubavu, the Government needs to take a comprehensive Enhancing Rubavu domestic market programs training and vocational of Improvement hi prhsn pwr o ohr od and goods other for services. power purchasing their decreases turn, This in which, growth time. income hinders and labour of cost the cover cannot which prices low at sold are they where markets onthe much to commodities and transportationgoods their of this spend to Thus, citizens areas. brings situation rural in particularly is goods limited, their for markets and employment to the city is motorcycles. Therefore, people’s access within currently transport rapid of mode primary the is and it use surveyed transport people 4% than less inadequate; public Furthermore, and drains theirpurchasing power. low- and middle-income groups, and (v) availing (v) and groups, middle-income and low- for subsidies or sector credit providing private (iv) investment, incentivising the (iii) minerals, strengthen local (ii) including materials, locally-produced for housing market affordable dense stimulates and that of planning development (i)appropriate the expedite affordable achieved be will This through: housing. to strong take measures should Government the Secondly, implies: This economy. District’s the of sector priority a • • agri-business employment. promote and markets access to farmers help to linkages urban-rural adequate and Improve transport infrastructure for strong and jobs within Rubavu district. addition value activities, create should which agro-processing Developing Policy Brief 5 IPAR -2020 regulations, tariffs and information, and work with trade formalise should Government Fourthly,the tourism hub. and abusiness as to position Rubavu’s zone) strengthen economic special zone, industrial the for electricity phase markets,three modern park, long-term in plan markets manufacturing andinfrastructure should investment (Car to Government access The and as DRC. trading well cross-border as for businesses, center to a positioned as strategically act is Rubavu Thirdly, and businessesto develop. households for local infrastructure and utilities hne ivsmn t opruiy sectors, opportunity to investment channel should the Government characteristics, and its specific Rubavu of location strategic the to Due 3. in Rubavu city. opportunities market domestic boost to order in traderwomen’sgroups,particularly cooperatives, Promoting investment in opportunity sectors investment Promoting business andtourism hub. in partnership order to public-privatetransform Rubavu city into a cross-border through risk the landfill and sewerage infrastructure and to spread explore strategicinvestments should extractives,in methane gas, Government the Furthermore, (Northern Province) andGoma(DRC). Musanze of cities neigboring its of ones the with This market opportunities growth. of Rubavu city itself, economic/ but also the with business align should SEZ envisioned stimulate and sector agricultural the boost to intent an with economy local the of needs the consider should SEZ the of development The production. for power zone, energy economic better of supply special the the and inexistent, now is which the accelerate of would development in This incentives sectors. tax to give strategic and access credit facilitate and permits should Government The mining, trade, transport, manufacturing andagro-processing. tourism, including

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