Rwanda

Photo by Michael Muli / Unsplash
Rwanda's nascent green recovery
A full editorial for Rwanda is coming soon. The following is taken from the COVID-19 policy analysis.
Rwanda has faced significant economic challenges from the disruption caused by the pandemic alongside a series of natural disasters, pushing the economy into its first recession. To date, the government has issued approximately USD$1.1 billion in fiscal stimulus or 10.1% of GDP according to the latest estimate from the IMF.
As part of the 2020-21 Budget, the government announced a 2-year USD$900 million Economic Recovery Plan with a focus on stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery. With spending aligned to Rwanda's National Strategy for Transformation 2017-2024 (NST), the package adopts initiatives to strengthen healthcare and education, enhance social protection and create jobs through increased public infrastructure investment. Of the three pillars contained in the NST, more than 55% of budget expenditure has been allocated to the 'Economic Transformation' pillar, with initiatives largely focused on incentivising investment and production to get the economy moving again. A further USD$350 million Economic Recovery Fund provides general financial support to MSMEs and hard-hit sectors such as the hospitality industry in the form of subsidised loans and credit guarantees. While there are a few green initiatives, including allocations to a landscape restoration programme (USD$5 million) and a project to strengthen climate resilience in rural communities (USD$8 million), these commenced pre-pandemic, rely on international finance and appear as isolated programmes (not backed by a wider green narrative in the recovery plan) - so do not alter Rwanda's score. In December 2020, the government provided further support to industry, launching its Manufacture & Build to Recover Program which aims to fast-track private sector investment in manufacturing and construction by providing tax exemptions on materials and reduced tax credits on export revenues.
Despite displaying global climate leadership with the submission of a tougher NDC in 2020, green ambition does not appear to have translated into action in Rwanda's stimulus packages so far. Looking ahead the 2021-22 Budget doesn't break from this trend, promoting "economic recovery through industrialization and inclusive growth". Green measures are few but include finance for the second phase of construction of a hydroelectric power plant and generalised pledges to improve environmental protection and promote enhanced water resources management. Meanwhile transport spending is allocated almost exclusively to road-building infrastructure projects alongside the construction of new Bugesera International Airport and the national carrier RwandAir received unconditional financial support in excess of USD$145 million. At this stage, it seems Rwanda is focusing on increasing productivity over the short to medium term - with little to no real consideration given to initiating a green recovery.
Photo by Michael Muli / Unsplash
Policy Scores
Last updated 23 Oct 2022
Green COVID-19 Recovery
Rwanda has faced significant economic challenges from the disruption caused by the pandemic alongside a series of natural disasters, pushing the economy into its first recession. To date, the government has issued approximately USD$1.1 billion in fiscal stimulus or 10.1% of GDP according to the latest estimate from the IMF.
As part of the 2020-21 Budget, the government announced a 2-year USD$900 million Economic Recovery Plan with a focus on stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery. With spending aligned to Rwanda's National Strategy for Transformation 2017-2024 (NST), the package adopts initiatives to strengthen healthcare and education, enhance social protection and create jobs through increased public infrastructure investment. Of the three pillars contained in the NST, more than 55% of budget expenditure has been allocated to the 'Economic Transformation' pillar, with initiatives largely focused on incentivising investment and production to get the economy moving again. A further USD$350 million Economic Recovery Fund provides general financial support to MSMEs and hard-hit sectors such as the hospitality industry in the form of subsidised loans and credit guarantees. While there are a few green initiatives, including allocations to a landscape restoration programme (USD$5 million) and a project to strengthen climate resilience in rural communities (USD$8 million), these commenced pre-pandemic, rely on international finance and appear as isolated programmes (not backed by a wider green narrative in the recovery plan) - so do not alter Rwanda's score. In December 2020, the government provided further support to industry, launching its Manufacture & Build to Recover Program which aims to fast-track private sector investment in manufacturing and construction by providing tax exemptions on materials and reduced tax credits on export revenues.
Despite displaying global climate leadership with the submission of a tougher NDC in 2020, green ambition does not appear to have translated into action in Rwanda's stimulus packages so far. Looking ahead the 2021-22 Budget doesn't break from this trend, promoting "economic recovery through industrialization and inclusive growth". Green measures are few but include finance for the second phase of construction of a hydroelectric power plant and generalised pledges to improve environmental protection and promote enhanced water resources management. Meanwhile transport spending is allocated almost exclusively to road-building infrastructure projects alongside the construction of new Bugesera International Airport and the national carrier RwandAir received unconditional financial support in excess of USD$145 million. At this stage, it seems Rwanda is focusing on increasing productivity over the short to medium term - with little to no real consideration given to initiating a green recovery.
Rwanda has faced significant economic challenges from the disruption caused by the pandemic alongside a series of natural disasters, pushing the economy into its first recession. To date, the government has issued approximately USD$1.1 billion in fiscal stimulus or 10.1% of GDP according to the latest estimate from the IMF.
As part of the 2020-21 Budget, the government announced a 2-year USD$900 million Economic Recovery Plan with a focus on stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery. With spending aligned to Rwanda's National Strategy for Transformation 2017-2024 (NST), the package adopts initiatives to strengthen healthcare and education, enhance social protection and create jobs through increased public infrastructure investment. Of the three pillars contained in the NST, more than 55% of budget expenditure has been allocated to the 'Economic Transformation' pillar, with initiatives largely focused on incentivising investment and production to get the economy moving again. A further USD$350 million Economic Recovery Fund provides general financial support to MSMEs and hard-hit sectors such as the hospitality industry in the form of subsidised loans and credit guarantees. While there are a few green initiatives, including allocations to a landscape restoration programme (USD$5 million) and a project to strengthen climate resilience in rural communities (USD$8 million), these commenced pre-pandemic, rely on international finance and appear as isolated programmes (not backed by a wider green narrative in the recovery plan) - so do not alter Rwanda's score. In December 2020, the government provided further support to industry, launching its Manufacture & Build to Recover Program which aims to fast-track private sector investment in manufacturing and construction by providing tax exemptions on materials and reduced tax credits on export revenues.
Despite displaying global climate leadership with the submission of a tougher NDC in 2020, green ambition does not appear to have translated into action in Rwanda's stimulus packages so far. Looking ahead the 2021-22 Budget doesn't break from this trend, promoting "economic recovery through industrialization and inclusive growth". Green measures are few but include finance for the second phase of construction of a hydroelectric power plant and generalised pledges to improve environmental protection and promote enhanced water resources management. Meanwhile transport spending is allocated almost exclusively to road-building infrastructure projects alongside the construction of new Bugesera International Airport and the national carrier RwandAir received unconditional financial support in excess of USD$145 million. At this stage, it seems Rwanda is focusing on increasing productivity over the short to medium term - with little to no real consideration given to initiating a green recovery.
Governance
National green economy plan
Rwanda does not have an overarching national green economy plan, although its Green Growth Strategy does propose some green initiatives and the development of geothermal power. Similarly, the National Strategy for Transformation, alongside aims to increase productivity and economic growth, does promote the sustainable management of environment and natural resources to transition towards a green economy though specific commitments are unclear. Rwandas Environment and Climate Change policy broadly aims to attract investment in green job creation, promote and support local industries and SMEs to adopt environmentally sound technologies and promote circular economy. In terms of specific targets, the countrys NDC does set an unconditional emissions reduction target of 16% against the business as usual scenario by 2030.
Rwanda does not have an overarching national green economy plan, although its Green Growth Strategy does propose some green initiatives and the development of geothermal power. Similarly, the National Strategy for Transformation, alongside aims to increase productivity and economic growth, does promote the sustainable management of environment and natural resources to transition towards a green economy though specific commitments are unclear. Rwandas Environment and Climate Change policy broadly aims to attract investment in green job creation, promote and support local industries and SMEs to adopt environmentally sound technologies and promote circular economy. In terms of specific targets, the countrys NDC does set an unconditional emissions reduction target of 16% against the business as usual scenario by 2030.
Inclusive governance
According to the Voluntary National Review report, Rwanda's Constitution has enshrined principles of gender equality and women's rights and sets a mandatory minimum of 30% of women in all decision-making bodies. Labour law in Rwanda provides for employees' representatives and allows collective bargaining but engagement in corporate governance is minimal. No evidence of public consultation on government policy.
According to the Voluntary National Review report, Rwanda's Constitution has enshrined principles of gender equality and women's rights and sets a mandatory minimum of 30% of women in all decision-making bodies. Labour law in Rwanda provides for employees' representatives and allows collective bargaining but engagement in corporate governance is minimal. No evidence of public consultation on government policy.
SDG business strategy
No national or very weak initiatives on promoting and helping organisations to take action to achieve the UN Sustainable Development Goals.
No national or very weak initiatives on promoting and helping organisations to take action to achieve the UN Sustainable Development Goals.
Wealth accounting
Rwanda joined the WAVES partnership in 2013, which led to a plan to develop Natural Capital Accounts. Between 2018 and 2019 it published the first natural capital accounts for land, water and minerals. Although it is anticipated that these accounts will inform policy developments, there are no proposals as yet to integrate these within a wealth accounting framework.
Rwanda joined the WAVES partnership in 2013, which led to a plan to develop Natural Capital Accounts. Between 2018 and 2019 it published the first natural capital accounts for land, water and minerals. Although it is anticipated that these accounts will inform policy developments, there are no proposals as yet to integrate these within a wealth accounting framework.
Finance
Green finance plan
Extremely limited engagement with green finance overall but Rwanda has begun to issue green bonds as part of the countrys Environment and Climate Change Policy.
Extremely limited engagement with green finance overall but Rwanda has begun to issue green bonds as part of the countrys Environment and Climate Change Policy.
Green fiscal & monetary policy
There are no proposals or processes in place for reviewing environmental sustainability of fiscal and monetary policy. The National Environment and Climate Change policy states that it aims to revise public procurement guidelines to promote green technologies in national and district procurement processes, and identify and implement fiscal, taxation and other policy options to reduce upfront costs of green technologies in priority areas but no plans or actions are set out.
There are no proposals or processes in place for reviewing environmental sustainability of fiscal and monetary policy. The National Environment and Climate Change policy states that it aims to revise public procurement guidelines to promote green technologies in national and district procurement processes, and identify and implement fiscal, taxation and other policy options to reduce upfront costs of green technologies in priority areas but no plans or actions are set out.
Safe & accountable banks
In terms of liquidity risk, Rwanda has introduced the Basel III Liquidity coverage ratio, which is akin to a stress test in assuming outflows of funding at the 30-day horizon and haircuts on available liquid assets. It also runs a reverse liquidity stress test or deposit concentration test. No details on whether other risk aspects are covered, but it is considered unlikely a this stage.
In terms of liquidity risk, Rwanda has introduced the Basel III Liquidity coverage ratio, which is akin to a stress test in assuming outflows of funding at the 30-day horizon and haircuts on available liquid assets. It also runs a reverse liquidity stress test or deposit concentration test. No details on whether other risk aspects are covered, but it is considered unlikely a this stage.
Pricing carbon
Although one of the programs of the Green Growth and Climate Resilience Strategy included the aim of building carbon trading capacity within the private sector by capturing funding from Clean Development Mechanisms and voluntary carbon markets there have been no further discussions or proposals on developing tax or trading schemes for pricing carbon.
Although one of the programs of the Green Growth and Climate Resilience Strategy included the aim of building carbon trading capacity within the private sector by capturing funding from Clean Development Mechanisms and voluntary carbon markets there have been no further discussions or proposals on developing tax or trading schemes for pricing carbon.
Sectors
Green sectoral policy plan
Rwandas Green Growth Strategy is embedded in the National Transformation Strategy 2017-2024 and provides the basis for the NDC and the Climate Change Policy. Although these strategic documents contain plans spanning a number of sectors, they adopt an overarching economic rather than green or sustainable development approach. There are some green components amongst general planning policies, such promoting the use of low-carbon materials in construction. Within the agricultural sector, the Green Growth Strategy advocates mainstreaming agroecology and resource recovery and reuse through organic waste composting. Within industry it aims to scale up resource efficiency to reduce energy and water demand, and establish innovation centres to support investment in industries producing green technologies. The Green Growth Strategy also aimed to introduce climate-compatible mining through implementing energy efficiency and using efficient technologies at operations, together with the utilisation of renewable energy sources, either from national grid or on-site generation. However, measures set out in the Green Growth Strategy differ to those in the Transformation Strategy, suggesting little coordination between the two plans.
Rwandas Green Growth Strategy is embedded in the National Transformation Strategy 2017-2024 and provides the basis for the NDC and the Climate Change Policy. Although these strategic documents contain plans spanning a number of sectors, they adopt an overarching economic rather than green or sustainable development approach. There are some green components amongst general planning policies, such promoting the use of low-carbon materials in construction. Within the agricultural sector, the Green Growth Strategy advocates mainstreaming agroecology and resource recovery and reuse through organic waste composting. Within industry it aims to scale up resource efficiency to reduce energy and water demand, and establish innovation centres to support investment in industries producing green technologies. The Green Growth Strategy also aimed to introduce climate-compatible mining through implementing energy efficiency and using efficient technologies at operations, together with the utilisation of renewable energy sources, either from national grid or on-site generation. However, measures set out in the Green Growth Strategy differ to those in the Transformation Strategy, suggesting little coordination between the two plans.
Small business support
One of the policy actions included in Rwandas Environment and Climate Change policy was to promote and support local industries and SMEs to adopt environmentally sound technologies through applying appropriate incentives and disincentives. The Rwanda Green Fund (FONERWA) provides some, limited finance to green businesses and periodically carries out investment calls prioritising funding for conservation and sustainable resource management, environment and climate mainstreaming, environmental impact assessment, monitoring and enforcement. No details on social enterprise or sustainability training schemes for SMEs or support for traditional SMEs to adopt green practices.
One of the policy actions included in Rwandas Environment and Climate Change policy was to promote and support local industries and SMEs to adopt environmentally sound technologies through applying appropriate incentives and disincentives. The Rwanda Green Fund (FONERWA) provides some, limited finance to green businesses and periodically carries out investment calls prioritising funding for conservation and sustainable resource management, environment and climate mainstreaming, environmental impact assessment, monitoring and enforcement. No details on social enterprise or sustainability training schemes for SMEs or support for traditional SMEs to adopt green practices.
Carbon budgeting
Rwanda does not have a carbon budget in place, nor is there evidence of any discussion regarding carbon budget proposals. However, the country has set soft targets in its latest NDC committing to an unconditional reduction target of 16% and conditional reduction target up to 22% of the business as usual scenario by 2030, totaling a 38% reduction. No targets have been set beyond 2030.
Rwanda does not have a carbon budget in place, nor is there evidence of any discussion regarding carbon budget proposals. However, the country has set soft targets in its latest NDC committing to an unconditional reduction target of 16% and conditional reduction target up to 22% of the business as usual scenario by 2030, totaling a 38% reduction. No targets have been set beyond 2030.
Clean energy policy
Rwanda Vision 2050 declares that there will be continued emphasis on clean energy as a source of generation, with at least 60% of installed capacity falling in this category. The Environment and Climate Change policy refers to promotion of renewable energy in the context of climate change mitigation and the Green Growth Strategy includes promotion of geothermal power generation and a pledge to reach reach 700 MW. Additional support is also proposed for small-scale energy installations in rural areas, establishing renewable energy feed-in-tariffs, developing green public-private partnerships to encourage private investment.
Rwanda Vision 2050 declares that there will be continued emphasis on clean energy as a source of generation, with at least 60% of installed capacity falling in this category. The Environment and Climate Change policy refers to promotion of renewable energy in the context of climate change mitigation and the Green Growth Strategy includes promotion of geothermal power generation and a pledge to reach reach 700 MW. Additional support is also proposed for small-scale energy installations in rural areas, establishing renewable energy feed-in-tariffs, developing green public-private partnerships to encourage private investment.
People
Green jobs
Rwandas National Strategy for Social Transformation aims to create 1.5 million decent and productive jobs though it does not mention green jobs specifically. The Voluntary National Review establishes some new programs targeting young adults and women, including the National Employment Program, but this expired in 2019. However, the government estimates that 137,000 green jobs were created through the Rwanda Green Fund, which granted finance to support green business initiatives.
Rwandas National Strategy for Social Transformation aims to create 1.5 million decent and productive jobs though it does not mention green jobs specifically. The Voluntary National Review establishes some new programs targeting young adults and women, including the National Employment Program, but this expired in 2019. However, the government estimates that 137,000 green jobs were created through the Rwanda Green Fund, which granted finance to support green business initiatives.
Pro-poor policy
While Rwanda has been strengthening social protection in recent years, it is yet to adopt a green and integrated approach to pro-poor policy. For example, the National Strategy for Social transformation aims to improve and scale up its core social protection programs, including the One Cow per Poor Family program but not to introduce any particular green approach. The Green Growth and Climate Resilience strategy, in the context of ecotourism and payment for ecosystem services in protected areas, aims to increase the benefit Fund from 5% of tourism revenues and ensure greater distribution of resources to the poorest families. Rwanda is also in the process of establishing an Expanded Public Works program, which targets labour constrained households and provides reliable year-round employment.
While Rwanda has been strengthening social protection in recent years, it is yet to adopt a green and integrated approach to pro-poor policy. For example, the National Strategy for Social transformation aims to improve and scale up its core social protection programs, including the One Cow per Poor Family program but not to introduce any particular green approach. The Green Growth and Climate Resilience strategy, in the context of ecotourism and payment for ecosystem services in protected areas, aims to increase the benefit Fund from 5% of tourism revenues and ensure greater distribution of resources to the poorest families. Rwanda is also in the process of establishing an Expanded Public Works program, which targets labour constrained households and provides reliable year-round employment.
Participatory policymaking
The National Strategy aims to increase citizen participation by reinforcing decentralised mechanisms for consultation of women and youth at the district planning level though specific actions and proposals are unclear. CARE International have tested a Community Score Card Model which enables citizens to participate in decision-making, call for transparency and accountability, and facilitate improvements in the quality of service delivery. In 2017 the model was introduced into government created spaces.
The National Strategy aims to increase citizen participation by reinforcing decentralised mechanisms for consultation of women and youth at the district planning level though specific actions and proposals are unclear. CARE International have tested a Community Score Card Model which enables citizens to participate in decision-making, call for transparency and accountability, and facilitate improvements in the quality of service delivery. In 2017 the model was introduced into government created spaces.
Innovative social protection
According to Rwandas Voluntary National Review, the government is currently in the process of revising the national social protection policy so its not yet clear whether there are plans to develop more innovative social policy pilots. Existing programmes such as Vision 2020 Umurenge and those set out within Rwandas National Strategy for Transformation aim to provide direct assistance to vulnerable groups, eradicate malnutrition through enhanced prevention and management, and ensure access to quality healthcare for all.
According to Rwandas Voluntary National Review, the government is currently in the process of revising the national social protection policy so its not yet clear whether there are plans to develop more innovative social policy pilots. Existing programmes such as Vision 2020 Umurenge and those set out within Rwandas National Strategy for Transformation aim to provide direct assistance to vulnerable groups, eradicate malnutrition through enhanced prevention and management, and ensure access to quality healthcare for all.
Nature
Ocean & land conservation
Rwanda does not have an overarching conservation strategy in place. While there are a number of relevant environmental strategies, these tend to cover a specific area forming a patchwork of overlapping documents and targets. Rwandas National Strategy for Transformation includes proposals to increase forest cover through landscape restoration, and the Climate Change Policy aims to identify, restore and protect polluted wetlands but neither of these plans are explicitly aligned to the SDGs. Similarly, the National Biodiversity Strategy includes targets covering sustainable management of fishing, aquaculture, agriculture and forestry, with at least 10.3% of national lands with unique biological diversity protected and conserved, but no reference to the SDGs.
Rwanda does not have an overarching conservation strategy in place. While there are a number of relevant environmental strategies, these tend to cover a specific area forming a patchwork of overlapping documents and targets. Rwandas National Strategy for Transformation includes proposals to increase forest cover through landscape restoration, and the Climate Change Policy aims to identify, restore and protect polluted wetlands but neither of these plans are explicitly aligned to the SDGs. Similarly, the National Biodiversity Strategy includes targets covering sustainable management of fishing, aquaculture, agriculture and forestry, with at least 10.3% of national lands with unique biological diversity protected and conserved, but no reference to the SDGs.
Natural capital accounts
Rwanda joined WAVES in 2013 and, in line with its Natural Capital Accounts Development Plan, the country now has three initial accounts in place covering land, water and mineral resource flows. However, its not clear whether further comprehensive accounts are under development.
Rwanda joined WAVES in 2013 and, in line with its Natural Capital Accounts Development Plan, the country now has three initial accounts in place covering land, water and mineral resource flows. However, its not clear whether further comprehensive accounts are under development.
Natural capital committee
The Rwanda Natural Resources Authority and the Rwanda Environmental Management Authority under the Ministry of Natural Resources, together with the Ministry of Finance and Economic Planning are the WAVES lead government agencies on natural capital. Rwanda does have a steering committee made up of representatives from several ministries (including the Ministry of Natural Resources, Ministry of Finance and Economic Planning, among others) the National Institute of Statistics and the Rwanda Environment Management Agency however the committee functions as a cross-government platform rather than an independent expert advisory body.
The Rwanda Natural Resources Authority and the Rwanda Environmental Management Authority under the Ministry of Natural Resources, together with the Ministry of Finance and Economic Planning are the WAVES lead government agencies on natural capital. Rwanda does have a steering committee made up of representatives from several ministries (including the Ministry of Natural Resources, Ministry of Finance and Economic Planning, among others) the National Institute of Statistics and the Rwanda Environment Management Agency however the committee functions as a cross-government platform rather than an independent expert advisory body.
Nature-based fiscal reform
The Green Growth and Climate Resiliency strategy included a programme to improve vehicle efficiency, fuel quality regulations and taxation policies, but there is no evidence of proposals for nature-based fiscal reform.
The Green Growth and Climate Resiliency strategy included a programme to improve vehicle efficiency, fuel quality regulations and taxation policies, but there is no evidence of proposals for nature-based fiscal reform.