Rwanda : Toward Sustained Growth and Competitiveness, Volume 1. Synthesis and Priority Measures
2007
World Bank
Rwanda established targets for Gross Domestic Product (GDP) growth and poverty reduction, to be achieved by the year 2020; these were to (i) raise real per capita income from $230 to $900; and (ii) reduce the poverty incidence by half. To reach these targets, the Government projected in its 2002 Poverty Reduction Strategy Paper (PRSP) that GDP growth will to be in the range of 6 to 7 percent over the medium term. The PRSP focused on six priority areas: (i) rural development and agricultural transformation; (ii) human development; (iii) economic infrastructure; (iv) good governance; (v) private sector development; and (vi) institutional capacity development. While increased spending in the social sectors led to substantial improvements in outcomes there has been only limited spending for economic services, including investment to improve productivity in agriculture and manufacturing. Improvements in poverty have been marginal, due to a number of factors: (i) lack of investment in infrastructure during the recovery and stabilization phase, to complement the reforms undertaken to improve the business environment; (ii) lack of investments in capacity, institutions, and land/water management in the agricultural sector; (iii) continued low use of inputs; (iv) instability within the region; (v) delays in Rwanda's accession to the East Africa Community (EAC); and (vi) a slower than expected pace of reform in key sectors such as the tea industry. The PRSP anticipated that growth in the agricultural sector will proceed with progressive commercialization, with ensuing demand for agricultural and non-agricultural goods and services in rural areas, resulting in increasing non-farm employment.
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