Rwanda is in the process of mobilising funds and designing the second phase of the Economic Recovery Fund. The fund‘s second phase is expected to be launched in June this year and follows the Rwf100 billion fund launched in June last year. Sources with insights on the matter say that the second phase of the fund could increase the fund to about Rwf350 billion. Richard Tusabe, the Minister of State in charge of the National Treasury in the Ministry of Finance and Economic Planning, said that efforts are underway to prepare rollout mechanisms of the fund to ensure impact and relevance to beneficiaries as well as timely disbursement. Having experience from the disbursement of the previous fund which is still underway, he said that they expect more uptake in the oncoming fund and possibly shortfalls. Among the features of the soon to be launched fund, he said, is that it will be more tailor-made to address market concerns and economic turmoil experienced in the local market. So far, of the Rwf100 billion economic recovery fund, Rwf50 billion was allocated to refinance hotels loans restructuring while Rwf50 billion was allocated for working capital. Of the hotel refinancing fund, Rwf43 billion has since been disbursed while the balance has been redirected to support transport sector operators. However, there has been relatively poor uptake of the working capital allocation with about Rwf13 billion so far disbursed. Tusabe said the relatively poor uptake of the working capital could be out of economic uncertainty and pessimism which was fast changing as economic activity resumed as well as country vaccination progress. He however noted that in response to the limited uptake, they were customizing interventions to support the sectors worst hit such as transport, Meeting and conference operators, private education players to brace them for recovery. For instance, about Rwf12 billion is going to transport which has been affected as measures to curb the pandemic’s spread were implemented including reduced capacity in public buses which saw a drop in revenue for public transporters. The minister also mentioned that there are efforts to ensure that funds are accessed by Micro enterprises and Small and Medium Enterprises as they were also being disbursed via Saccos. 412 Saccos countrywide are currently involved. World Bank Rwanda Country Manager, Rolande Pryce said that they are involved in the ongoing preparatory process for the new recovery fund adding that they were using lessons from the current fund on aspects such as eligibility. She said that among the bank’s expectations from the process is an approach that drives economic recovery sustainably and without adverse effects to the economy in the medium term. Tusabe also noted that in response to about 500,000 people across the country slipping into poverty as a result of the pandemic and measures to curb it, the government was rolling out social protection programmes as well as implementing projects and programmes that would create jobs across the country. In November last year, the government reviewed the terms and conditions for local firms eligible to receive the Economic Recovery Fund to increase the number of local businesses eligible for the support. Economic recovery is top on the agenda as senior government officials and development partners commenced a 2 day meeting on March 24, the 17th Annual Development Partners Retreat (DPR). At the meeting, the parties are taking stock of the key impact of Covid-19 pandemic on the economy and Rwandan society and mull strategies to pivot the economy to regain momentum. “The government’s health and socio-economic response has been commendable. Together, we can do more to recover stronger. Partners stand ready to continue supporting Rwanda to build a more inclusive, gender-responsive, green and resilient economy, for the benefit of all people,” Fodé Ndiaye, UN Resident Coordinator said.
