Natural resources for sustainable development
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For Rwanda to progress, grow and manage our economy wisely, we need good measures to evaluate our economic status and performance. Gross Domestic Product is a standard or traditional measure of economic performance, focused on income, the value of goods and services.
But it does not give us insight about the underlying wealth and the assets that sustain our income, or the trends in their use or performance.
For some time now, we have been keen to evaluate and measure natural assets’ contribution to ensure sustainability and the purpose of the just ended National Workshop on Natural Capital Accounting in Rwanda will help us address this challenge.
Natural capital accounting gives us an approach and tools that will help us analyse the trends in our underlying natural assets.
This tool can inform our efforts to sustain performance through sound management of natural assets.
I am pleased to see that our economic and statistical departments recognise the value of natural capital accounting as an extension of the System of National Accounts.
This approach will help us integrate natural resources into our economic analyses. It can give us a broader view of development progress.
Natural capital accounting can add value in Rwanda’s national development planning process by raising attention on economically important natural resource sectors.
The NCA approach requires that we work together across sectors and institutions to produce consistent, reliable data to support economic assessments and sound policy formation. The NCA approach can help to identify trade-offs or potential constraints as Rwanda grows.
At the workshop, we heard about progress in developing natural capital accounts for land, water and minerals. These sectors were strategically selected when the work began in 2015 as critical sectors for our economy and our livelihoods.
Land is the basis for our agriculture and rural livelihoods. But there are pressures on land from population growth, and rapid urbanization.
Also, our steep terrain, dense population and traditional rain-fed agriculture present challenges both for agricultural development and for reducing vulnerability to changes in climate and rainfall patterns.
We expect that the results on Natural Capital Accounts for land can add value in our planning for sustainable development by providing indicators and trend analysis to track performance.
Land accounts can provide information about land use change, land availability and productivity, as well as potential constraints to agricultural growth, a key pillar of Rwanda’s development agenda.
Land trend information can also provide insights about potential effects on water use or food production.
Water is also a vital and cross-cutting natural resource. If water availability declines, it could constrain growth in key sectors such as agriculture and urban development.
Water resources, like land, are under pressure from population growth and rapid economic development. Intensification of agriculture and increasing urbanization and industrialization are placing further demands on the water resource.
Proper water management is a national development imperative and we need to put in place the frameworks and policies for optimal utilization of the water resources of the country.
We expect that these water accounts can help us increase the quality, credibility and consistency of the statistics and analyses that support national development plans and targets for the water sector.
Water Accounts can help to clarify and compare the economic values of water in competing uses and how it is changing over time. Water accounts could also help to improve quality of data used for management, pricing and allocation and to address questions of cost recovery and investment needs.
Rwanda’s mining sector is among those sectors which generate high export revenues. Economic planners hope for more growth and increasing investment and production, but we need to also understand and plan for the environmental implications of higher growth and investment in the sector.
Natural Capital Accounting can help us to better understand the sector’s potential, trends, efficiencies, while also understanding the cross-sectoral issues and implications for land and water use and value.
Through this process of developing the accounts, we have learned a lot, built inter-agency collaboration through the technical working groups, and established systems for sharing data across institutions and sectors.
Though we have made great strides, of course, more can be done to harmonize data sharing systems, improving compatibility and streamlining data collection systems.
Achieving our national economic growth goals will require the wise use of our land, water and mineral resources. Natural Capital Accounting is a tool that can inform our Third Economic Development and Poverty Reduction Strategy (EDPRS3) planning process, as well as our national climate change strategies and plans.
Natural Capital Accounts will be a relevant and important source for developing indicators and tracking progress against baselines under many of these initiatives.
This preparation process is building our capacity and providing a space for improving data exchange, institutional coordination, and measures for dealing with inter-sectoral trade-offs.
This article was derived from a speech by the Minister for Natural Resources, Dr Vincent Biruta, at the National Workshop on Natural Capital Accounting in Rwanda held in Kigali on Thursday.