Inside World Bank’s $1.2 billion investment in Rwanda

The World Bank Group last week launched a 6-year Rwanda Country Framework for the period between 2021 and 2026 which will see up to $1.2 billion invested by 2023 across key sectors. The partnership framework and funds committed are expected to play a role in the recovery from the economic effects of the Covid-19 pandemic and serving national development goals. Five broad areas will be impacted; improvement of human capital, improvement of conditions for Private Sector Development, expansion of access to infrastructure and the digital economy, increased agricultural productivity and commercialization and intensified urban agglomeration. The New Times’ Collins Mwai spoke to Rolande Pryce, the World Bank’s new Country Manager, on the group’s planned investment and support. Excerpts: One of the areas that the World Bank will invest in is Human Capital development and education, what are the key challenges identified? In 2018, the World Bank produced the Human Capital Index. For Rwanda, out of 100, Rwanda scored 38. This means that a child born in Rwanda today will be 38 per cent as productive as he or she could be if they had full education and health services. 38 per cent is not a good number. We look at education, health services, social protection and different ways to provide support for human capital to thrive and flourish. In education, we have a couple of key things that we noticed. There was an abrupt shift in language of instruction a number of years back. Rolande Pryce, the new World Bank’s Country Manager, during the interview. / Photo: Courtesy This created somewhat a challenge because some teachers were not equipped for the switch. With some teachers at a disadvantage and it is the language you teach all the subjects, it means that you are at a disadvantage. The student does not have the full grasp as well as the teachers to learn new concepts. The education outcomes even for other countries that are similarly situated like Rwanda, the Rwandan education outcomes are lagging behind. You know that Rwanda never compares itself with others, the country looks ahead. We also noticed that many people have to walk long distances to school. Then when they go, the teacher-student ratio has been high. Looking at this, we looked at how we can formulate a programme to address the challenges with the government in the lead. This was a discussion at a high level with the country expressing need for quick action. What interventions do you have lined up to improve learning outcomes? We prepared an education project valued at about $200 million, we prepared it in six months. It looks at the built environment, better classrooms, more classrooms, teachers’ quality and their pedagogical skills as well as institution assembly. We are happy that the project is flying fast. When there was the Covid-19 pandemic, the government said that since the children are out of schools, we can build the classrooms. This is one part. We are already seeing some tangible outcomes of the building process. We are working on the skills part. This includes hiring new teachers, accessing where they are, being able to improve their capacities and setting up systems for that. We need to do this because given the government plans if the country is able to create the projected jobs, there will be no eligible quality skilled people to take them on. If children under 5 are malnourished, their brains are not being developed and their ability to learn is affected. These fundamental steps from when the child is in the womb (first 1000 days) are important. We are also dealing with skills development, while there are many people going to the university, few are taking on STEM subjects and also many of the universities might not be developing skills for the labour market. The Rwandan private sector has often been termed as not strong enough to drive national growth ambitions, what have you identified as challenges holding them back? We looked at it from the perspective of what can be done to improve the environment for more private sector involvement. As profit-driven entities, they come in when there is space for them, opportunities. One of the things we have been trying to work on is to create an enabling environment for them to come in. over the years, the government has led most of the investments. There are a few things that could be done to attract more private sector investments, entrance of the private sector and survival. In that regard, if you look at capital, one of the things that the private sector has termed as a challenge has been access to long term finance in local currency. The idea of access to finance, inclusive finance is something that we can work on. How can the challenges be addressed? Our partnership is with the Development Bank of Rwanda and we are looking at a number of sectors, housing, infrastructure, agriculture, micro-small and medium enterprises. We are looking at creating some instruments that will allow them to borrow on a longer-term basis at good rates to fuel their businesses. For MSMEs, it’s not sector-specific, it’s broad. When the Covid-19 pandemic happened, the government mobilized immediately and put in place a steering committee that set an Economic Recovery Fund. There are a number of businesses that have already benefited. They have already been working. We also realised that the impact might not have been as immediate impact for some MSMEs but they will still need to access finance to build resilience. We are still in discussions with the government to prepare a set of financing that will go into the Economic Recovery Fund and would be implemented by the Central Bank but looking at specific instruments that they could access. A good example we see that the government has pivoted is that while there was a set criterion for businesses to access the ERF, they realised that not a lot of businesses were taking advantage, they looked at the criteria and readjusted to get more people to benefit. With the resources that the government will have from this programme once it is designed, MSMEs will have a separate window that is tailor-made for them. This will address the concerns of affordable capital. With growing urbanization, rural to urban migration, what are some of the interventions laid out to make sure that it serves growth ambitions? The government has been very focused to make sure that Kigali is not just welcoming for Rwandans but can also attract investments, have global companies headquartered here. One of the key drivers of growth we have found globally is movement from rural to urban areas; urban agglomeration. We want to have the movement from rural to urban, it’s actually happening slowly in Kigali and other places. What happens in some countries is that they don’t plan for the growth in population. We already have on the ground the Rwanda Urban Development Programme, we have a phase 2 which was recently approved which is estimated at about $162 million, which is essentially looking at a couple of different aspects. This includes answering questions such as are the people coming able to access improved basic services. The second is enhancing resilience, we have to be conscious of climate change, environmental risks that are associated with planning among other things. The biggest chunk is integrated urban planning. We are also looking at 6 secondary cities by building the capacities of local governments to be able to plan in advance with foresight. Finally, as you get on implementing this, what are your asks of the various national stakeholders to achieve desired outcomes? The government is in the lead of the entire process. We are grateful for the continued focus that they have. We are grateful for the help we have received from the development partners and continue to strengthen the partnership continuing to be coherent. For the private sector, our biggest ask is that they should realize how important they are for the development of the country. They should ensure that their businesses work, they can create jobs, deliver high-quality jobs as they are integral for the continued growth. For the civil society, they sit close to the beneficiaries, they give a voice to beneficiaries who may not always be able to articulate well the challenges they may be facing. They should continue to be involved and comment on the process. The academia is important not only to develop skills, but we also need them to continue being part of generating ideas, concepts and making suggestions on policy.

News

Inside World Bank’s $1.2 billion investment in Rwanda