The World Bank’s Board of Directors last week approved $175 million in International Development Association (IDA) financing to help advance Rwanda’s policy and institutional reform program for human capital development and inclusive economic growth.

The financing package consists of an $87.5 million IDA grant and $87.5 million IDA credit; and is the second in a series of three development policy financing operations, with the first $150 million approved in December 2020.

One of the salient features of this program is strong multisectoral collaboration among several government ministries and institutions to collectively deliver key results at various stages of the human lifecycle.

 The program addresses obstacles to human capital development by improving financing and enhancing families’ access to health, nutrition, education, and social safety net services.

 It focuses on providing equitable opportunities for poor and vulnerable households to invest in their human capital, empowering women, and developing strong governance and accountability mechanisms at the decentralized levels.

The reform program is yielding impressive results. For instance, the proportion of regular beneficiary households of the Vision 2020 Umurenge Program enrolled in human capital-focused social safety net interventions has increased from 19 percent as of March 2020 to 41.5 percent as of September 2021.

The proportion of young children now receiving a minimum package of integrated early childhood development services in accordance with national standards has gone up from 17 per cent in 2020 to 42 per cent in November 2021.

 Health sector financing reforms have ensured that over 85 percent of the target population has been covered by community-based health insurance, up from 69 percent in 2020. These efforts have been critical to ensure that people have access to financially sustainable health insurance schemes in Rwanda.

The program also remains responsive to the Covid-19 pandemic. As of October 2021, 111,265 households, largely reliant on informal work, received emergency cash support to help tide over losses of income during the pandemic—already surpassing the target of 100,000 households.

About 58 per cent of these recipients have been women. Education sector reforms related to the strengthening of teaching and learning at the pre-primary, primary and secondary levels were adversely affected by the pandemic-related school closures but thanks to prudent measures taken by the government, these reforms are expected to accelerate in 2022.

"Human capital development is at the heart of Rwanda’s resilient recovery from the effects of the Covid-19 pandemic and is the foundation of Rwanda’s longer-term development agenda. This comprehensive multisectoral and multi-year program focuses on accelerating more and better investments in people to deliver key results at various stages of the human lifecycle,” said Rolande Pryce, World Bank Country Manager for Rwanda. Our collaboration with the government and other development partners to strengthen Rwanda’s human capital, aims to ensure that all citizens benefit from and also productively contribute to sustainable economic growth in the country.” 

Importantly, the program facilitates inter alia continued strengthening of Rwanda’s social protection system to effectively reach families that need it most, deepening of Rwanda’s decentralization reforms to allow for improved service delivery to citizens by local government, and improved fiscal transparency and debt management.

"The Government of Rwanda’s commitment to human capital development is manifested in strong leadership, good design, and effective implementation of a multisectoral reform program, which has started producing impressive results,” said Iftikhar Malik, World Bank Lead Human Development Specialist and the project Task Team Leader for this operation. "Thanks to a combination of people-centric policy, institutional reforms, and our sectoral project and advisory support in partnership with ministries and institutions, we can anticipate inclusive growth and a more prosperous outlook for the citizens of Rwanda in the coming years”.

Rwanda is an early adopter of the World Bank’s Human Capital Project, a global network of 82 countries of all income levels that focuses on more and better investments in people for greater equity and growth. The performance and results being achieved through this programmatic series should also contribute to global learning in this important thematic area.