Assessment of Poverty Reduction Strategies in sub-Saharan Africa:
The Case of Rwanda
Bernard Noel Rutikanga
Current Rwanda’s problems are the consequences of colonial legacy, bad post-independence governance and economic mismanagement. Rwanda is the only country in Africa which has suffered from genocide. The post-second World War’s ‘Never again’ has proved a hollow slogan. It is a Herculean task to heal the wounds of Rwandan society and to mend its shattered social fabric. To ensure economic growth and poverty reduction, it is imperative that reconciliation becomes a reality.
The ethnic conflict which dates back to colonial era has to be resolved in order to create a united, peaceful and stable society conducive for poverty reduction. A society which has been polarized almost for a century, a society which has experienced socio-economic and political exclusion – depending on who wields political power - a society which has suffered from ethnic massacres at short intervals in 1960s and 1970s and eventually a genocide, need concerted efforts to achieve reconciliation.
Colonialism and its staunch ally – the Catholic Church - planted the seeds of ethnic mistrust and hatred which culminated in the 1959 Rwandan tragedy where thousands of Tutsi were massacred, others were displaced and thousands fled into exile in Uganda, Tanzania, Burundi, the Democratic Republic of Congo and elsewhere. This tragedy became the springboard of the 1994 genocide. How did Rwanda become what it is today?
Belgium took over Rwanda from Germany after the First World War. In 1920s Belgian colonial officials, social scientists and Roman Catholic missionaries introduced racial theories promulgated by Joseph Gobineau the author of Essay on the Inequality of Races.
In pursuing their 'divide-and-rule' policy, they started frantic researches into the differences existing between Rwandan social categories, namely the Tutsi –pastoralists), Hutu (agriculturalists) and Twa (hunters and potters). They used history of migration as the starting point of dividing these groups. They came up with the Hamitic myth that the Tutsi were of a superior race that migrated from Egypt, Ethiopia and beyond. They were said to be of Aryan or Semitic origin. The Hutu were said to be of an inferior stock, Negro-Bantu who came to Rwanda from West Africa. The Twa were dismissed simply as pygmies who had previously broken away from the Animal Kingdom (Goyvaerts 2000; Prunier 1995).
These researches left nothing to chance. They measured limbs of the three groups to prove their hypothesis of the differences among them. Their findings were much acclaimed in administrative and Church circles, and they resulted in stereotyping the three social groups as the tables below show (Goyvaerts 2000; Prunier 1995; d’ Hertfert 1970).
Poverty Reduction Strategy Papers (PRSPs) were introduced in the late 1990s as an instrument to link debt relief to progress on poverty reduction in enhanced HIPC eligible countries. PRSPs took the place of former Policy Framework Papers (PFPs) as the required statement of recipient government objectives for receipt of IFI concessional development assistance.
Poverty Reduction Strategy Papers describe a country’s macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs. PRSPs are prepared by governments through a participatory process involving civil society and development partners, including the World Bank and the International Monetary Fund.1
The PRSPs set out a country’s short to medium term development goals and priorities aimed at poverty reduction. In principle, the purpose of the PRSP is:
to make it a country driven process;
to enhance country ownership of the strategy and its implementation; and
to promote partnership among stakeholders.
The PRS process involves doing a comprehensive diagnosis of the country’s development challenges and poverty situation, keeping a long term perspective on poverty reduction and overall development strategy, and emphasis on results-orientation. The PRSP should summarise the priority public actions over a three-year horizon including presentation of the country’s macroeconomic framework, summary of the overall public expenditure programme and its allocation among key area, and a matrix of key policy actions and institutional reforms and target dates for their implementation.
The expected content of the PRSP has four core elements that include a) a description of the country’s participatory process, b) a poverty diagnosis, c) priority public actions and a monitoring and evaluation system with clear targets, and d) performance indicators which provide a basis for assessing progress in implementation of the PRSP.
The PRSP ‘process’ begins with the preparation of an Interim PRSP (I-PRSP) as an initial condition for reaching the HIPC Decision Point and a signal for the release of debt relief. This is followed by preparation of a full PRSP involving broad consultation with national stakeholders which, together with the preparation of Annual Progress Reports (APRs) and monitoring of specific HIPC ‘triggers’, marks the transition towards HIPC Completion Point and the effective de-linking of the PRSP from the condition of debt relief.
The introduction of the PRSP concept was aimed at addressing the weaknesses identified in the way of providing and managing development financing, both within recipient countries and in the international community. The PRSP concept therefore introduced some principles to guide the process. These principles include:
- The PRS is a country-led process in which government engages in dialogue with other national stakeholders to ensure broad-based ‘consensus’ and ownership of the strategy and policies selected.
- The strategy should be results or outcome oriented, starting from a strong poverty diagnosis clearly highlighting the causes and dynamics of poverty and working back to the design of appropriate pro-poor policies.
- The approach should be comprehensive in its coverage of different macroeconomic, sectoral and cross-sectoral issues affecting poverty.
- The strategy and related process should be the basis of a new form of partnership with development partners, and civil society to ensure better coordination, alignment and harmonization of external assistance around the PRSP under the leadership of the national government.
- The PRSP should take a medium to long term perspective, implying the need for forward-looking commitments from both government and development partners to ensure full implementation of the strategy.
Over the last few years, the PRSP has expanded beyond HIPC-eligible countries to include all low-income countries receiving concessional assistance. The PRSP approach has also assumed wider significance in terms of its impact on policy, planning and budgeting for poverty reduction in low income countries and the way international support to poverty reduction is framed and delivered.
In Rwanda, the PRS process started with the launching of the National Poverty Reduction Programme by HE the President of the Republic of Rwanda in June 2000. The Interim PRSP was finalized in November 2001. The final Poverty Reduction Strategy Paper was published in June 2002 and was endorsed by the Boards of the IMF and World Bank in July 2002. Since then the Government of Rwanda has produced three Annual Progress Reports covering the periods of PRSP implementation 2002, 2003 and 2004. Overall the Rwandan PRSP was commended as a high quality short – medium poverty reduction strategy and the overall PRS process was applauded for being largely participatory. This assessment is aimed at highlighting the experience that Rwanda has had in the management of the PRS process, emerging issues, key lessons learnt and the way forward.
The Poverty Reduction Strategy in Rwanda is grounded in the Poverty Reduction Strategy Paper commonly referred to as PRSP. The PRSP of Rwanda, like that of any other poor country, was drawn as a policy prescription recommended by the World Bank and International Monetary Fund. However, in relation to the evolution of poverty conditions in Rwanda it was a response to crises that had evolved over two decades and subsequently broadened and deepened levels of poverty in the country.
Crisis started to emerge in late 1970s through 1980s. The oil crisis and economic shocks that hit the Third World in mid 1970s did not spare Rwanda. The shocks were responsible for the escalation in prices of intermediate and final goods imported from outside and the resulting imported inflation. The external sector became excessively vulnerable and both the balance of payments and terms became even more unfavourable (Kade and Musahara 2005).
The structural problems that the Rwanda economy experienced were not solely due to rise in oil prices and external shocks of the 1970s. One of the most proximate causes of crisis was the collapse in the price coffee and other commodities in late 1980s. Rwanda had always depended on coffee and tea as principal exports. The two constituted 65% of all export earnings. The collapse of the coffee market in 1989 adversely affected the whole economy (Waller 1996). In reality it was not coffee alone.
Coffee prices fell in real terms by 72 %, tin by 35 %, and tea by 66 %. The result was a decline in real purchasing power of export earnings by 59 %. Agriculture was also in crisis and one in six people were threatened by famine in 1989. While average percentage growth rate of GDP between 1975 and 1989 was 6.8 %, it was 2.9 % between 1985 and 1989.
Due to economic crisis, Rwanda was forced into undertaking structural adjustment. The latter policy did not succeed either because of the war or because of its weaknesses (Uvin 1998). However, structural adjustment has been alleged to being responsible for the emergence of the ‘new poor’ (Chossudovsky 1998; Marysse, Herdt and Ndayambaje 1993). However in reality it is not completely true to attribute Rwandan economic crisis to the effects of adjustment. In October 1990 a few weeks after signing with the Bretton Woods Institutions, to adopt a Structural Adjustment Programme, Rwanda was involved in a war that was to last four years, culminating in a genocide in early 1994. In fact there is evidence that the first proceeds of the agreement may have been used to finance the war instead of carrying out adjustment1. Adjustment was resumed in 19942.
By mid 1990s, during the second phase of adjustment, one major prerequisite for support, just like under any SAP programme, was drawing up of a Policy Framework Paper (PFP)3. Rwanda’s last PFP spanned from 1996 to 1999. Meanwhile towards the end of the 1990s the IMF and the World Bank started shifting towards a new paradigm involving poverty reduction. In 1999 they agreed to increase debt relief to eligible low-income countries through the Highly Indebted Poor Countries (HIPC) initiative. The condition was that a country develops a Poverty Reduction Strategy Paper (PRSP) and in the short run writes an Interim PRSP. However it was also required of all other poor countries not on HIPC to improve the quality of the poverty reduction strategy before getting support from IMF and the World Bank. By 1999 there were 77 such countries that had per capita GNP below USD 885. PRSPs then replaced the PFPs. In this new framework, PFPs were no longer the condition. Rwanda became one of the countries required to prepare a PRSP.
In June 2000 a National Poverty Reduction Programme was set up. The first task of the programme was to draw an Interim PRSP, which was presented to the donor community and approved by the BWIs by the end of the same year. Writing a full PRSP followed thereafter and involved a number of activities usually referred to as the PRSP process.
A nationwide consultation process to inform the PRSP was initiated. It was carried out through a survey named Participatory Poverty Assessment (GoR 2002a). The aims of the survey were described as generating an accurate profile and diagnosis of what poverty is in Rwanda, evaluating the policies proposed in the I-PRSP and starting a longer-term process in which poor people would generate and implement their own solutions (GoR 2002a).
On a lower scale, covering a third4 of the country was a survey carried out by independent researchers of OSSREA Rwanda Chapter to assess the relevance of policies in Interim PRSP to poverty reduction (GoR 2002b). The study focused on the inclusiveness of polices, participation and ability to offer solutions to problems that the poor face in Rwanda.
Meanwhile several studies had been programmed to provide inputs to the full PRSP. The most important was the Household Living Conditions Survey completed in 2001 and published in 2002 (GoR 2002c). Another was a World Bank designed Core Welfare Indicators, which assembled a number of indicators generated to assess the levels of well being (GoR 2002d). To track the expenditure on poverty, a Public Expenditure Tracking Survey was carried out in the health and education sectors and it was published in 2002 (GoR 2002e). From results of the household living survey was drawn a Poverty Profile which was also published in 2002 (GoR 2002f).
With data and information collected, PRSP was finalised and adopted in June 2002. Rwanda started to be subject to constant supervision and reviews in order to access the Poverty Reduction and Growth Facility (PRGF) that had replaced the ESAF. As provided in the HIPC conditionality the first annual review was carried out in June 2003 and a second was completed in June 2004. In May 2005 Rwanda qualified for debt relief after reaching the Completion Point. The detailed implications of the latter are provided under fifth item of the core elements of this assessment. What is important to note is that the first round PRSP will be wound up this year, 2005. A second Household Living Conditions Survey will also be concluded, a second Core Welfare Indicators Questionnaire was published in 2004 and a new PRSP will be drawn probably by next year, 2006 or later. To Rwanda an assessment sponsored by OSSREA is timely and locks in the second round of the Rwandan PRSP process.
The assessment is being carried out in five other countries: Kenya, Ethiopia, Uganda, Zambia and Malawi. It aims at assessing core elements of poverty reduction strategies in these countries. This study constitutes a second step in the regional projects. The first was a planning workshop that took place in July 2004. This step is carrying out the assessment, after which there will be national workshops and a regional conference before the dissemination phase. This study is one of the three being carried by three researchers with different academic and professional backgrounds and will therefore constitute a country assessment which is part of a wider regional project.
The rest of this report is arranged as follows: Section 2 is the statement of the problem, Section 3 objectives, and Section 4 the literature review. In Section 5 we present the scope and significance, Section 6 is on limitations of the study, while Section 7 provides the conceptual framework. Section 8 elaborates the methodology used in the assessment. Section 9 presents the data collected followed by an interpretation and critical analysis of the data in Section 10. Section 11 is a set of conclusions and recommendations, followed by references and appendixes.