The World Bank’s Board of Directors on December 16, 2020 approved $150 million (about Rwf145 billion) in International Development Association (IDA) financing for a programme of policy and institutional reforms intended to accelerate human capital development for inclusive economic growth in Rwanda.
Of this financing, $75 million is a grant while $75 million is a credit, shows the statement from the World Bank.
Aligned with the objectives of the country’s National Strategy for Transformation (2017-24), the Bank said, the facility marks the start of a series of three operations to be delivered between 2020 and 2022.
According to the World Bank, human capital consists of knowledge, skills, and health that people accumulate throughout their lives, enabling them to realise their potential as productive members of society.
The Bank says that the country can end extreme poverty and create more inclusive societies by developing human capital, something that requires investing in people through nutrition, healthcare, quality education, jobs and skills.
It will support the Government-led multi-sectoral reform programme that includes mutually supportive policy and institutional reform actions for effectively delivering social sector services to families across the lifecycle.
The Future Drivers of Growth in Rwanda, a 2020 report by the World Bank Group and the Government of Rwanda, identified four essential drivers of growth—innovation, integration, agglomeration, and competition—and reforms in six priority areas: human capital development, export dynamism and regional integration, well-managed urbanisation, competitive domestic enterprises, agricultural modernisation, and capable and accountable public institutions.
The Bank said that the above-mentioned operation will help the government of Rwanda in strengthening the resilience of families, supporting a promising start for young children, enabling a better learning environment for students in school, promoting equitable access to health services, and enhancing the delivery of human capital focused social protection benefits and services to the poor and vulnerable.
"I am thrilled about this operation, which supports Rwanda’s strong commitment to investing in people and accelerating progress on human capital development.
It supports policy reforms that promote close collaboration among various ministries and agencies across different sectors to better serve families, women, and children in order to unleash the full potential of all Rwandan citizens,” said Rolande Pryce, World Bank Country Manager for Rwanda.
"This is one of the first such efforts in Africa sharply focusing on human capital and acknowledging its important role in the inclusive economic growth agenda,” Pryce observed.
The programme promotes Rwanda’s long-term fiscal sustainability and enhances local capacity and accountability for social services delivery. It recognises women’s empowerment as a fundamental condition to boost the human capital of future generations and to leveraging untapped potential for increased productivity.
Iftikhar Malik, World Bank Senior Human Development Specialist and the Task Team Leader for this operation said that the programme represents an important step forward as Rwanda strives to ensure a level playing field for all citizens and strengthens the quality and availability of social services.
He noted that it advances the Government’s commitment to unlock policy and institutional bottlenecks in maximising the returns on investments in education, health, and social protection.
"The program design ensures that poor and vulnerable families are not left behind and receive due support for their welfare as well as enhanced nutrition and learning to ensure a better future for their children,” he said.
Expected outcomes
At the end of this three-year reform programme, it is expected that emergency cash transfers will be delivered to 100,000 households to help them cope with the impact of Covid-19-related shocks and that the coverage and share of low-income beneficiaries receiving support from human capital-focused social protection programs and from the community-based health insurance scheme will increase.
It is also expected that there will be a greater share of qualified teachers in primary and secondary schools, and the presence of doctors and nurses in the public sector health facilities will be improved.
Rwanda is an early adopter of the World Bank’s Human Capital Project, a growing global network of 78 countries of all income levels that focuses on more and better investments in people for greater equity and growth.
Finance ministers from these countries meet regularly to report progress and discuss human capital related issues. Government officials also work together across the country network to exchange ideas and knowledge.