Rwanda’s Aid Policy
Implementing Change to Maximise the Impact of
Aid on Poverty Reduction and Economic Growth
John Rwangombwa
Secretary General and Secretary to the Treasury
Ministry of Finance and Economic Planning
Presentation Outline
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Aid to Rwanda in figures
Background to Aid Effectiveness
initiatives at the national and
international level
Process of developing Aid Policy
Overview of Aid Policy content
Focus on Implementation: Who, What
and How
The need to scale up aid to Rwanda
Aid to Rwanda in Figures
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GoR estimates indicate that Rwanda received
some 497.6 million USD in Official
Development Assistance (ODA) in 2005.
This was equal to 23% of GDP
Equivalent to 55 USD per capita
58% of this assistance came from multilaterals
41% of total ODA came in the form of
Budget Support
Largest sectors in terms of volume of
earmarked aid were Infrastructure and
Health (12% of total ODA each)
Aid to Rwanda in Figures (cont’d)
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Tracking and monitoring of disbursement for
foreign finance capital projects is difficult. This
is due to incomplete information from donors
This leads to accumulation of large disbursed
funds in accounts with BNR, making
implementation of monetary and exchange rate
policies difficult and limiting aid effectiveness
A study is to be conducted into why large
balances have accumulated and donors are
requested to assist with required information
Background: From Global
Commitments to Local Policy
Paris Declaration on
Aid Effectiveness
(March 2005)
In-country discussions and
consultations on aid effectiveness
with GoR and DPs
Development of
GoR Aid Policy
Implementation: Opportunities and
Challenges for GoR and Partners
Developing Rwanda’s Aid
Policy
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Adoption of Paris principles, tailored to
meet Rwanda’s needs.
Policy development through a broad
consultative process:
Consultation with donors in-country and
abroad
 Intra-GoR discussions and consultations
 Input from NGOs and Private Sector
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A sound evidence base:
In-country research activities
 Learning from other LDCs experiences
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What does the Aid Policy do?
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It sets out the GoR’s vision for the
volume, type and management of aid:
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Preferred aid modalities: General Budget
Support > Sector Budget Support > Projects.
All aid to be on-budget and on-plan.
Increase use of GoR systems in delivery of
aid.
Pooling of funds, and delegated cooperation,
to be encouraged.
Intra-GoR division of responsibilities clarified.
The need for further strengthening of GoR
planning, PFM and aid management systems.
Overseeing Implementation
Aid Policy Implementation Committee
MINECOFIN, Office of the President, PRIMATURE, MINAFFET, MINALOC, CNLS, HIDA
 Provides high-level oversight and strategic direction
Technical Secretariat
External Finance Unit, MINECOFIN
 Works with DPs and GoR
bodies to implement the
interventions identified in
implementation plan
GoR
Entities
LINE MINISTRIES, LOCAL
ADMINISTRATIONS, and
SEMI-AUTONOMOUS BODIES
work with Secretariat to improve
intra-GoR division of labour,
strengthen GoR systems
and human resources
Development
Partners
OFFICIAL DONORS integrate
aspects of the Aid Policy in their
planning; maintain dialogue with GoR
NGOs collaborate with MINALOC and
MINECOFIN to ensure assistance is
provided in an effective manner
Sensitisation and
Dissemination Strategy
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Raising awareness of GoR bodies with respect
to the provisions of the Policy:
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Current donors are aware of the Policy and
the expectations of the GoR:
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Implementation workshop(s) to be held, to work
on Manual of Procedure
Communication of Policy to heads of cooperation
and embassies; dialogue at DPCG and other fora
Raising the profile of Rwanda’s aid
effectiveness initiatives abroad
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Communication of Policy via Embassies abroad
Participation in OECD-DAC Working Party on
Aid Effectiveness
Clarifying GoR Aid
Management Procedures
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MINECOFIN to work with line
ministries, MINAFFET, local
administrations and other GoR bodies
to elaborate a Manual of Procedure for
aid management
Workshops and discussions to establish:
Detailed roles and responsibilities
 Timelines for completion of negotiation
and management tasks
 Systems for the sharing of information
relating to external assistance
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Further Research and Analysis
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Baseline Survey on the state of Aid
Effectiveness in Rwanda
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Research and recommendations on the
effectiveness of “vertical” funds
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OECD-DAC Survey compiled and finalised
Further analysis ongoing, with sector-based
analysis of aid effectiveness planned for 2007, to
support development of SWAps
Particular focus on alignment and use of GoR
systems by these donors, drawing on international
experiences
Analysis of macroeconomic effects of scaling
up of aid flows
Strengthening GoR Capacities
for Aid Management
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Training of planning/budget staff from
across the GoR on aid management
Training of EFU staff in negotiation skills
Strengthening of GoR systems for aid
management, particularly for the collection
and analysis of aid data
Training of MINECOFIN and other GoR
planning/budget staff in the use of these
systems
Mutual Accountability
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GoR commitment to develop mechanism for
monitoring mutual accountability with its
DPs. Proposal currently being developed for
discussion with DPs late 2006 / early 2007.
Dispute Resolution
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Commitment to agree on mechanism(s) for
dispute resolution with DPs, with a view to
ensuring that development programmes and
projects are not interrupted. GoR will seek to
launch discussions around this with its
Partners at DPCG early 2007.
The Need to Scale Up Aid
1,000
Civil war and Genocide
900
800
Post-war recovery……towards longer term growth
and poverty reduction
USD millions
700
600
PRSP1
EDPRS
forthcoming
500
400
300
Total Net ODA
(2004 prices)
200
…of which
emergency aid and
food aid
100
0
Year
Data source: OECD-DAC
The Need to Scale Up Aid
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Rwanda will need to scale up public
investment significantly if it is to meet the
MDGs and fulfil the objectives of Vision
2020.
The forthcoming costing of the EDPRS
should offer an accurate picture of Rwanda’s
additional resource needs in the mediumterm.
Rough estimates by the IMF suggest that even
with higher revenue mobilisation, the annual
resource gap to meet the MDGs would
average around US$1 billion (2006 prices)
during 2009-2020.
The Need to Scale Up Aid
Key Issues to be given consideration;
 Need to maintain macro economic
stability; manage Dutch disease effect
 Target investiment to areas that will
have quick and longterm impact on
economic growth and poverty
reduction; Infrastructure, Agriculture
 Capacity building; human and
institutional
 Structural reforms to foster private
sector devt
The Need to Scale Up Aid
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Maintain debt sustainability; more grants vs
debt; debt must be highly concessional
However after MDRI and Debt cancellation
there is no clarity regarding existing loan
commitments for ongoing projects (eg. AFDB
and IDA projects loans).
Current disbursements as loans will increase
the debt stock and could recreate an
unsustainable debt situation. There is a need
for the donor community to examine this
situation and find a solution
CONCLUSION
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Successful implementation of the Aid
Policy will have a significant positive
impact on aid effectiveness, and this in
turn will be translated into more
efficient public investments and service
delivery to the benefit of the Rwandan
citizen, especially the poor.
The need for scaling up is real.
Let us work closely together to address
the various issues related to it.
I THANK YOU