The World Bank Group is preparing a pipeline of projects estimated at $500 million to be approved and announced in the course of 2021. 

The support will go into supporting vaccine procurement and deployment, financial support to Micro and Small and Medium Enterprises, commercializing agriculture and promoting digital inclusion all part of supporting Rwanda’s resilient recovery.

This is according to Rolande Pryce, the World Bank Country Manager for Rwanda.

While the details on the timelines of availability of funds remain scanty, the fund is expected to come in handy in speeding up Covid-19 vaccine access, as well as facilitating the resumption and recovery of business activities.

Among the gaps that the funds are expected to fill is curbing poverty levels which the World Bank estimates could go as a result of lockdowns, social distancing, and increased costs associated with the pandemic.

In the latest World Bank’s Rwanda Economic Update, it is estimated that the poverty headcount is likely to rise by 5.1 percentage points (more than 550,000 people) in 2021, with more than 80 per cent of the new poor in rural areas. Across the continent, an estimated 32 million people could be plunged into poverty.

Studies by the World Bank showed that the impact of Covid-19 disproportionately affects women in Rwanda.

While the employment to population ratio decreased by 5 percentage points from 48.3 to 43 per cent through the lockdown period, the lender noted that there was a larger decrease among female workers (6.2 per cent points versus 4 per cent among male workers).

This the bank found to be partly because women are more likely to be seasonal workers and more likely to be taking care of a sick relative.

The poverty effect, World Bank experts say is likely to be more in rural areas with rural residents taking longer to recover and graduate economically.

"Although the welfare losses in the rural areas are lower than those in the urban areas in the short term, rural households are more likely to remain trapped in poverty over the long term. The long-term adverse effect of the pandemic increases disproportionally more among rural households and the poorest households, accentuating inequality,” Calvin Djiofack, the World Bank Senior Economist.

The Bank however noted that ongoing responses by the government in social protection has played a role in curbing the increase in poverty.

"Rwanda’s social protection system responded quickly and helped mitigate the increase in poverty. It was well prepared to respond to the pandemic. Rwanda made significant pre-COVID investments in its flagship safety net, Vision 2020 Umurenge program (VUP), including an expansion in the number of beneficiaries through human capital-focused innovations,” he said.

Based on projections, the Bank estimates that if the government continues further expansion, and fully achieves the targets set out in the Economic Recovery Plan, social safety nets could reduce poverty by up to 1.75 percentage points in 2021.

The increase in poverty and reduced productivity, experts say could be felt across the economy for years with estimations that in the absence of robust interventions, GDP by 2030 would be 22 per cent lower in the baseline than in a scenario without COVID.

Rwanda is attempting to steer the economy back in line with the Economic Recovery Plan (ERP) estimated at US$900 million over the two fiscal years 2019/20 and 2020/21.

The recovery plan aims to scale up social safety net programs for the most vulnerable, build key infrastructures, and support strategic enterprises, including small- and medium-sized enterprises.

Amina Rwakunda, the Chief Economist at the Ministry of Finance, noted that the government is soon set to launch additional support to the investment sector from resources they are currently mobilising. 

Anastase Shyaka, the Minister for Local Government, said that while the pandemic has had multi-dimensional effects including health, economic and social aspects, the government has made attempts to create balance to ensure that progress in one aspect is not at the expense of the other.

Shyaka said that this involved ensuring that certain sectors of the economy can be maintained even during lockdowns.

Responding to the country’s response to poverty levels which are feared to be rising, Shyaka said that the government had adjusted and improved the timeliness in the disbursement of direct support input in social protection.