LANGUAGE: ENGLISH

Original: English

AFRICAN DEVELOPMENT FUND

PROJECT : SUPPORT FOR POLICY AND STRATEGY DEVELOPMENT

PROJECT

COUNTRY: RWANDA

PROJECT APPRAISAL REPORT

DATE: JANUARY 2009

Team Leader: Mr. L. BARROW, Principal Country Program Officer, RWFO

Team Members: Mr. C.OBIDEGWU, Consultant Economist, RWFO
Mr. C. AHOSSI, Principal Procurement Specialist, ORPF
Appraisal Team
Sector Manager: Mrs. M. KANGA, OSGE
Country Manager: Mr. J. MUKETE, Resident Representative, RWFO
Sector Director: Mr. G. NEGATU, OSGE
Regional Director: Mrs. D.GAYE, OREA

Mr. K. MLAMBO, Lead Economist, EDRE

Mr. J ANYANWU, Lead Research Economist, EDRE
Peer Reviewers
Mr. J. BAFFOE, Principal Planning Economist, ORPC
Mr. T. HOUENINVO, Senior Macroeconomist, OSGE
 TABLE OF CONTENTS

Acronyms and Abbreviations, Grant information, Project summary, Performance-based logical

framework, Project timeframe ....................................................................................................i-vi

I  STRATEGIC THRUST & RATIONALE

1
1.1       Project linkages with country strategy and objectives 1 
1.2  Rationale for Bank’s involvement 2 
1.3  Donor Coordination 3 
II.  PROJECT DESCRIPTION 3 
2.1  Project components 3 
2.2  Technical solution retained and other alternatives explored 4 
2.3  Project type 4 
2.4  Project cost and financing arrangements 5 
2.5  Project’s target area and population 6 
2.6  Participatory process for project identification, design and implementation 6 
2.7  Bank Group experience, lessons reflected in project design 6
2.8  Key performance indicators 7 
III  PROJECT FEASIBILITY 7
  3.1 Environmental and Social impacts 7 
IV  IMPLEMENTATION 8 
4.1  Implementation arrangements 8 
4.2  Monitoring 9 
4.3  Governance 10 
4.4  Sustainability 11 
4.5  Risk Management 10 
4.6  Knowledge building 11 
V  LEGAL INSTRUMENT AND AUTHORITY 11 
5.1  Legal instrument 11  
5.2  Conditions associated with Bank’s intervention 11 
5.3  Compliance with Bank Policies 11 
VI.  RECOMMENDATION 11 

APPENDICES 

Appendices

Appendix I Rwanda - Key Development Indicators

Appendix II Table of ADB’s portfolio in Rwanda
Appendix III Key related projects financed by the other development
partners in the country
Appendix IV Map of the Project Area

Outcome of Negotiations

Resolution
 Currency Equivalents
As of January, 2009

1 Unit of Account (UA) = 821.825 FRW

1 Unit of Account (UA) = USD 1.54027
I USD = 533.56 FRW

Fiscal Year
July 1 - June 30

Weights and Measures

1metric tonne = 2204 pounds (lbs)

1 kilogramme (kg) = 2.200 lbs
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres

i
 Acronyms and Abbreviations

ACBF = African Capacity Building Foundation

ADB = African Development Bank
ADF = African Development Fund
APRM = African Peer Review Mechanism
BDS = Business Development Services
BNR = Banque Nationale du Rwanda (also National Bank of Rwanda)
CEPEX = Central Public Investments and External Finance Bureau
CEDP = Competitiveness and Enterprise Development Project
CFP = Country Financing Parameters
COMESA = Common Market for Eastern and Southern Africa
CPAF = Common Performance Assessment Framework
CSP = Country Strategy Paper
DFID = Department for International Development
DG = Director General
DPCG = Development Partners Coordination Group
EAC = East African Community
EC = European Commission
ED = Executive Director
EDPRS = Economic Development and Poverty Reduction Strategy
ESW = Economic and Sector Work
GDP = Gross Domestic Product
GoR = Government of Rwanda
HIDA = Human Resources Institutional Development Authority
ICT = Information and Communications Technology
IFC = International Financial Corporation
IMF = International Monetary Fund
IPAR = Institute for Policy Analysis of Rwanda
LIP = Learning and Innovation Program
MDAs = Ministries, Departments and Agencies
MDG = Millennium Development Goals
MIFOTRA = Ministry of Public Service and Labor
MINECOFIN = Ministry of Finance and Economic Planning
MOU = Memorandum of Understanding
MSCBP = Multi Sector Capacity Building Program
MTR = Medium Term Review
ODA = Overseas Development Assistance
OECD-DAC = Organization of Economic Cooperation and
Development-Development Assistance Committee
PAC = President’s Advisory Council
PEFA = Public Expenditure and Financial Accountability
PFM = Public Financial Management
PSCBS = Public Sector Capacity Building Secretariat
PSF = Rwanda Private Sector Federation
QPR = Quarterly Progress Report
RDB = Rwanda Development Board
RWFO = Rwanda Field Office
SMSEs = Small and Medium Scaled Enterprises
SPSD = Support for Policy and Strategy Development
SPU = Strategy and Policy Unit
SWAp = Sector Wide Approach
UA = Unit of Account
UN = United Nations
UNDB = United Nations Development Business
UNDP = United Nations Development Program

ii
 Grant Information
CLIENT’S INFORMATION

RECIPIENT: Republic of Rwanda

EXECUTING AGENCY: Public Sector Capacity Building

Secretariat (PSCBS)

Financing plan

Source Amount Instrument

(million UA)

ADF 1.00 Grant

GoR 0.00 -
TOTAL COST 1.00

ADB’s key financing information

Loan / grant currency UA

Interest type* N/A
Interest rate spread* N/A
Commitment fee* N/A
Other fees* N/A
Tenor N/A
Grace period N/A
FIRR, NPV (base case) N/A
EIRR (base case) N/A
*if applicable

Timeframe - Main Milestones (expected)

Concept Note approval March 2009

Project approval July 2009
Effectiveness Aug 2009
Last Disbursement December 2012
Completion December 2011
Last repayment N/A

iii
 Project Summary

Project Overview: Rwanda’s long-term goal articulated in the Vision 2020 is aimed at rapid economic
transformation through application of knowledge and technology for wealth creation. GoR’s priority is
to improve policy analysis and oversight, which is necessary to effectively align the strategies and
plans with Rwanda’s development goals. The development objective of the Support for Policy and
Strategy Development Project (SPSD) is to contribute to improved competitiveness through an
efficient and effective public sector while the project objective is to strengthen strategic leadership
capability in Rwanda. The project will support capacity building activities for policy analysis and
oversight at Strategy and Policy Unit (SPU), Office of The President and the Institute for Policy
Analysis and Research (IPAR), an independent research institution. This support will leverage key
initiatives deriving from the National Leadership Retreat and Presidential Advisory Council, with a
view to catalyzing strategic actions to enhance competitiveness. Total project cost is UA 1.00 million,
and it will be implemented over a period of 30 months, with Public Sector Capacity Building
Secretariat (MSCBP) - HIDA as Executing Agency.

Project Outputs: The broad outputs of the project are effectively functioning SPU and IPAR, reflected
in (i) staff trained in policy analysis and advocacy; (ii) policy briefs prepared for senior decision
makers in Government; and (iii) private sector operators trained and action plan prepared for cluster
development. For IPAR, the outputs include (i) 5 year research program prepared; (ii) networks and
partnerships established with other research bodies; and (ii) publications- policy notes/papers prepared
and disseminated.

Project Outcomes and Beneficiaries: SPDP’s expected outcomes include: (i) knowledge management
institutionalized; (ii) effective economic management; and (iii) an improved business environment
conducive to growth and competitiveness. These will be achieved largely through production and
dissemination of knowledge/analytic products mainly targeting Rwanda’s senior policy makers; as
well as the effective alignment of strategies and plans with Rwanda’s development objectives. The
primary beneficiaries of the project are the senior policy makers and professional staff of SPU and
IPAR. Investors will also benefit from transparent and well coordinated government policies and good
governance practices.

Needs Assessment: In its EDPRS, GoR recognizes that poverty reduction efforts will be driven by
transformation of the economy through sustained investment in infrastructure, private sector
development and knowledge application. However, to meet the challenge of creating new drivers of
growth and improve international competitiveness, Rwanda faces an acute skills shortage, lacks
established “think-and-do-tanks” and a strong tradition of open public policy dialogue. To foster new
drivers of growth, there is need to develop strategic leadership capability and enhance evidence based
policymaking. As apex institution championing these causes as well as providing leadership in the
coordination of GoR’s policies and plans, SPU requires the intellectual capacity and resources to
effectively discharge its mandate.

Bank’s Added Value: The project is programmed in the Bank’s current CSP for Rwanda (2008-2011),
and is aligned to the CSP’s second pillar. Bank’s support for the project is within the broad context of
its assistance strategy to improve Rwanda’s economic performance for poverty reduction. SPSD is
consistent with the Bank’s knowledge related activities, as it will contribute to Rwanda’s capacity
development efforts in knowledge generation and sharing. It also leverages the Bank’s considerable
experience in institutional support and complements the Private Sector Strategy.

Knowledge Management: The Bank will capture knowledge learned from this project through careful
monitoring of the implementation progress, and impacts of SPU, IPAR and cluster development.
Knowledge products generated from this project will also be widely shared with key stakeholders,
including the senior policy makers and the private sector.

iv
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 Logical Framework Based on Anticipated Results
Rwanda-Support for Policy and Strategy Development Project
Hierarchy of Expected Results Reach Performance Indicators Indicative Targets and Timeframe Assumptions/Risks
Objectives (Target
Population)
Sector Goal Long-Term Impact Beneficiaries Impact Indicators 1.1.1 GDP growth rate maintained from Assumptions/Risks
Contribute to improved 1. Growth in GDP. Rwandan households 1.1 GDP growth rate. 11.2% in 2008 to 7.2% in 2020. Rapid global
competitiveness through 2. Improved business environment. and businesses. 2.1 Increased private and public 2.1.1 Gross investment ratio increases from economic recovery
an efficient and effective investment. 19.4% in 2008 to 30% in 2020. and sustained growth
public sector. Sources: National Accounts, EDPRS 2.1.2 Rwanda’s ranking in “Doing Business of Rwandan economy.
Progress Reports. index” improves from 139 out of 181 in
2008 to 82 in 2012.
Project Objective Outcomes Beneficiaries Outcome Indicators Progress Anticipated in Long Term Assumptions/Risk
To improve strategic 1. Knowledge management Public Sector agencies; 1. No. of “quick wins” proposed, 1.1.1. At least 6 major strategic initiatives Products generated
leadership capability in institutionalised. Private Sector approved and implemented. launched by 2011based on “quick wins” are not used by
Rwanda. 2. Better alignment of strategies Operators. 2.1 % of MDAs achieving improved proposed. government decision
with development objectives. utilisation of resources in the budget 2.1.1 % of sectors with at least 80% CPAF makers.
scores.
Activities/inputs 1. Effectively functioning SPU. SPU Staff 1.1 High quality policy papers/briefs 1.1.1 At least15 policy papers/briefs Risks
Component 1: SPU 2. Staff training in policy analysis prepared. prepared from 2009 to 2011. Government is able to
Support. implemented. 2.1 No. of staff trained. 2.1.1 All counterpart professional staff attract and retain staff
i. Recruit consultants trained from 2009 to 2011. in SPU.
ii. Procure goods
1.1 Action Plan for cluster
1. Strategy for cluster development development. 1.1.1 Action Plan approved by 2010. Private sector ready to
2. Learning and Private sector agents
prepared. 2.1 No. of training modules approved. 1.1.2 Start implementation of at least 1 implement cluster
Innovation Program development strategy.
i. Recruit consultants. 2. Training modules prepared. 3.1 No. of persons trained cluster investment program in 2011.
3. Training sessions conducted. 2.1.1 All entrepreneurs selected for cluster
ii. Training. Sources: PSCBP, SPU& PSF Reports;
QPRs; supervision reports. development trained from 2009 to 2011.
Activities/inputs 1. IPAR 5 year research program IPAR staff 1.1 Adoption of IPAR’s 5 year 1.1.1 IPAR’s research program approved Risk
Component 2: Support prepared. research program. by Board by March 2010.
to IPAR 2. Effective networks established. 2.1 No. of networks established. 2.1.1 Partnership agreements signed and/or IPAR ability to avoid
i. Recruit consultants. 3. Publications -prepare and 3.1 No. of publications disseminated. research networks joined increase from 2 high staff turnover.
ii. Workshops and disseminate policy papers. Source: IPAR Annual Report; QPRs (2009) to 7 in 2011.
Publications. 3.1.1 Major research papers published
increase from zero (2009) to 5 by 2011.
Activities/inputs Outputs PSCBS, SPU, IPAR, 1.1 Processing of procurement and 1.1.1 Timely submission of requests for Poor coordination
Component 3: Project 1. Capacity of SPU for effective PSF disbursement requests. Bank’s ‘no-objection’. between PSCBS and
Coordination project coordination enhanced. 1.2 Disbursement ratio. 1.2.1 Fully disbursed by Q1-2012. the Implementing
Budget: ADF-UA 1 1.3 Regular QPRs and audit reports. 1.3.1 QPRs and Audit provided timely. Agencies.
million.
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 REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP
TO THE BOARD OF DIRECTORS ON A PROPOSED GRANT TO RWANDA
FOR THE SUPPORT TO POLICY AND STRATEGY DEVELOPMENT PROJECT

Management submits the following Report and Recommendation on a proposed grant for UA 1.0
million to finance the Support for Policy and Strategy Development Project for Rwanda.

I STRATEGIC THRUST & RATIONALE

1.1 PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES

1.1.1 The Government of Rwanda (GoR) recognizes that achieving its Vision of reaching
middle-income status by 2020, and the MDG targets and EDPRS (2008-2012) objectives will
require creating new drivers of economic growth and fostering entrepreneurship for enhanced
competitiveness. In this regard, strengthening institutional capacity for policy analysis and
developing strategic leadership capability in Ministries, Departments and Agencies (MDAs) is
crucial.Without any established “think-and-do-tanks”, tertiary research institutions, independent
policy entrepreneurs or even a strong tradition of open public policy dialogue; these types of
capabilities have to be nurtured in Rwanda. To this end, one of the key challenges Rwanda faces is
to rapidly increase strategic capabilities that would enable MDAs to constantly adjust their
organizational resources to affect positive and rapid change. This imperative has become even more
critical in the wake of the global financial crisis, which threatens to reverse the economic gains
achieved since 1994.

1.1.2 Over the past 15 years, Rwanda has steadily moved out of its post-conflict phase and
implemented sound macro-economic policies and ambitious public sector reforms. Significant
progress has been made in laying the foundations of a private sector led economy, and to position
Rwanda as an emerging services and logistics hub in the region. However, the challenges for
poverty reduction remain daunting, with a Human Poverty Index estimated at 37% of the
population. Rwanda’s capacity building efforts are underpinned by a Multi Sector Capacity
Building Program (MSCBP) prepared by the Government in 2005 to provide a programmatic
approach for design and implementation of capacity building activities. The program also provides
a strategic framework for defining, monitoring and evaluating results. The Human Resources and
Institutional Capacity Development Agency (HIDA) was established in 20041 as a “one-stop shop”
under MIFOTRA to, inter alia, provide strategic leadership, facilitate, coordinate, monitor and
evaluate capacity building interventions. It also coordinates the implementation of all capacity
building initiatives under the MSCBP.

1.1.3 The Office of the President provides strategic leadership in overseeing the implementation
of GoR’s policies and plans. In 2007, a Strategy and Policy Unit (SPU) was established within the
Presidency with special remit to take a broad overview of government interventions to ensure
consistency in implementation. SPU was also tasked to derive best practices in the use of aid and
other scarce resources. SPU requires capacity building support to effectively discharge its mandate
and champion the transformation of MDAs’ strategic capabilities that will enable them to deliver
improved services. IPAR’s establishment in 2008 also responds to Rwanda’s need for independent
“think tanks” that could offer unbiased policy analysis and strategic advice to the government and
business community on issues vital to Rwanda’s economic transformation and competitiveness.

1
HIDA – MSCBP is currently under restructuring. On 19 June 2009, the Cabinet approved a new institutional
framework with the PSCBS retaining the responsibility for coordination of public sector capacity building activities
while Rwanda Development Board (RDB) assumes responsibility for private sector capacity building. RDB was
established in September 2008, and amalgamates 7 public institutions essentially to fast track private sector
development.

1
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1.1.4 Largely spearheaded by the Presidency, GoR has launched several initiatives to build
strategic capabilities in MDAs and other cross sections of Rwandan society. For instance, a
National Leadership Retreat is institutionalized whereby one week every year, governmental and
business leaders pool their competencies together to reflect on how development strategies can be
realigned to achieve more tangible results in reducing poverty. Another platform is provided by the
President’s Advisory Council (PAC), a forum that brings together high level talent and skills in
diverse fields; both Rwandan and friends of Rwanda, to brainstorm on thematic issues and proffer
creative solutions to advance the development agenda. The PAC includes some influential global
leaders, and acts as a network of strategic advisers to the Presidency and Rwandan institutions.
However, a key challenge is how to effectively leverage ideas and recommendations emanating
from the Leadership Retreat and PAC to assist MDAs in mainstreaming concepts and models
derived from these exercises into concrete policy actions and strategy execution.

1.2 RATIONALE FOR BANK’S INVOLVEMENT

1.2.1 SPDP derives from Government’s request for Bank’s assistance to build in Rwanda
strategic leadership capability and robust framework for sound policy development. The project is
programmed in the Bank’s Country Strategy Paper (CSP) for Rwanda covering the period 2008-
2011. While the CSP has noted many obstacles such as landlockedness and being located in a
volatile neighborhood, a low infrastructure base and weak human resource capacity in its
assessment of Rwanda’s development prospects, it also acknowledged that with determined
leadership, these constraints could be overcome particularly through adequate planning,
prioritization and effective resource mobilization. The CSP advocated for strengthening national
capacities, deepening policy reforms and investment in infrastructure- both national and regional
links. Bank’s support to Rwanda EDPRS focuses mainly on the first flagship, essentially through
two pillars: (i) Economic infrastructure; and (ii) Competitiveness and enterprise development. The
proposed SPSD, therefore, is aligned to the second pillar of the CSP, as this requires actions to build
institutional capacity and support skills development for enhanced competitiveness. In this regard,
the CSP envisaged support to SPU and IPAR among the menu of proposed Bank interventions.

1.2.2 Generally, the Bank’s support can be placed within the broader context of the support for
Rwanda’s efforts to improve economic performance and competitiveness. SPSD complements the
Bank’s Private Sector Strategy, which emphasize creating “Enabling Environment Programs” as
priority. Consistent with the Bank’s knowledge related activities, the SPSD will also build capacity
for knowledge generation and sharing in Rwanda.

1.2.3 The Bank has accumulated significant experience in providing capacity building support to
RMCs, particularly in economic management, promotion of good governance, public sector reform,
and decentralisation. Therefore, the project will leverage the Bank’s considerable experience in
institutional support. By building capacity in government, the non-government knowledge sector
and private sector, SPSD will also contribute to improved economic management through better
alignment of policies and strategies with EDPRS goals. While SPU and IPAR will continue their
traditional activities in policy analysis, their greater contribution would entail moving into more
strategic preoccupations to champion Rwanda’s development efforts. It also complements the
projects recently approved by the Bank in Rwanda. Specifically, the Support for Skills Development
in Science and Technology seeks to enhance technical and vocational skills base needed by the
private sector while Competitiveness and Enterprise Development Project and Poverty Reduction
Strategy Support III are anchored on creating an enabling environment for private sector led
growth.
 3

1.3 DONOR COORDINATION

1.3.1 Rwanda’s Aid Policy articulated a clear framework for coordination of development
assistance, and the policy dialogue between GoR and donors is frank and regular. Several platforms
exist to promote effective dialogue between government and the donor community. Development
partners participated actively in the preparation of Rwanda’s poverty reduction strategies, and in
the mechanisms to monitor its implementation. A Development Partners Forum, held annually,
provides high level platform to discuss economic developments, aid coordination as well as
progress in the implementation of GoR’s development plans. The Development Partners
Coordination Group (DPCG); comprised of representatives of government and the development
partners, meets every two months to discuss routine aid coordination matters. GoR, jointly with
Budget Support Partners Budget Support Partners, has developed a Common Performance
Assessment Framework (CPAF) based on EDPRS indicators, which also provide the triggers for
review and assessment of budget support operations. The Bank plays an active role in the policy
dialogue with GoR. Currently, RWFO co-chaired the Budget Support Harmonisation Group from
January to June 2008, and currently serves as co-chair of the Water and Sanitation Sector Working
Group. A mapping of donor presence by sector and division of labor is presented in annex III.

1.3.2 The Bank’s assistance to SPDP will complement support currently provided by World Bank
and African Capacity Building Foundation (ACBF) to SPU and IPAR respectively. Through the
Public Sector Capacity Building Project (PSCBP), World Bank is funding three senior policy
advisor positions at SPU while ACBF is supporting a portion of IPAR’s start up costs. SPU also
receives technical assistance support from the Blair Foundation, whose principal is also a member
of PAC. Donor support over the medium term that will complement Bank’s assistance include:
World Bank’s additional financing of US$6.0 million for CEDP-I; DFID’s US$20 million to
support rollout of the land reform program; EC’s 10th EDF (Euro 6.5 million) covering trade,
private sector development and regional integration; IFC’s Investment Climate Program supported
by Netherlands and DFID; and UNDP’s proposed support to strengthen the strategic planning units
in some Line Ministries.

II. PROJECT DESCRIPTION

2.1 PROJECT OBJECTIVE AND COMPONENTS

2.1.1 The development objective is to contribute to improved competitiveness through an efficient
and effective public sector while the specific objective of the project is to improve strategic
leadership capability in Rwanda. The project components are presented in Table 2.1 below;
Table 2.1: Project Components

Nr. Component Component description

1. Support to This component entails support for the position of Strategic Adviser
Strategy and to SPU (terms of reference and profile attached in Annex 1). It will
Policy Unit also fund short-term consultants to provide policy advisory services
and mentor SPU professional staff. The consultants will work with
SPU staff to prepare policy briefs/papers and analytic products for
the National Leadership Retreat organised annually under the
auspices of the Presidency; as well as special studies/investigations
to follow-up ideas and recommendations of the Presidential
Advisory Council. Some equipment support will also be provided to
SPU. Key outputs include trained SPU staff, policy briefs and
special studies prepared.
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Learning and Innovation Program (LIP): This sub-component
entails support to Rwanda’s Private Sector Federation (PSF) for
institutionalising a cluster development program. Leading
development thinkers and experts will be engaged to work with
private sector in selected sectors; building on opportunities
identified by RDB in mining services, niche tourism services,
business process outsourcing; agri-business and manufacturing.
Main outputs include: strategic action plan for cluster development
prepared; private sector operators trained; and at least one cluster
investment program started in 2011.
2. Support to This entails the services of a Senior Research Fellow and four short
Institute of term consultants to assist in developing IPAR’s 5 year research
Policy Analysis program and strengthening research capacity through
and Research mentoring/coaching for Institute’s staff. It will also support IPAR to
establish and join research networks, organise workshops and
publish IPAR’s flagship analytic products. Key outputs include
IPAR’s research program prepared and approved, staff trained on
research techniques/policy advocacy; networks established/joined
and research papers published.
3. Project Support for PSCBS incremental operating costs related to project
Coordination coordination and implementation; Monitoring and Evaluation; and
audit of the project accounts and financial statements.

2.2 TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED

2.2.1 The proposed project supports capacity development for policy analysis and developing
strategic capability to foster private sector innovation and enhanced competitiveness.
Implementation of the proposed project will require leveraging the institutional arrangements
already put in place by Government for a more effective coordination of all capacity building
efforts in order to reduce transaction costs and strengthen synergies with ongoing and planned
initiatives. It will also require building on the extensive international contacts that have been
established by Rwanda’s high leadership. For instance, Professor Michael Porter, an eminent
industrial economist at Harvard Business School and member of the PAC, has started working with
the Presidency and PSF on cluster development. This entails cluster mapping, cost and productivity
analysis, cluster specific business environment, and attracting investment to the cluster and
facilitating market linkages.

2.2.2 The Bank’s support could have been provided by other projects such as Competitiveness
and Enterprise Development Project Phase II (CEDP II) or the 3rd Budget Support operation.
However, CEDP II focuses on broader private sector development issues and continues the
activities of an earlier project while PRSS III is a general budget support operation for the
implementation of policy actions. Hence, it might not be a robust instrument for delivery of
capacity building assistance. In view of the project’s high level strategic orientation, it was deemed
essential to keep it more narrowly focused in order to ensure coherence, effective coordination and
rapid implementation.

2.3 PROJECT TYPE

2.3.1 This project is designed as a stand-alone institutional support, aimed at strengthening the
capacity for policy analysis and strategic leadership to advance Rwanda’s private sector led
development.
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2.4 PROJECT COST AND FINANCING ARRANGEMENTS
2.4.1 The cost of the project is estimated at UA 1.0 million (equivalent to US $ 1.54 million),
of which UA 0.852 million is foreign currency cost and UA 0.148 million in local currency costs.
Consistent with the new policy on expenditures eligible for Bank Group financing, ADF will
finance 100% of cost of the project. Sub-section 4.2.2 of the new policy on counterpart funds states
that “the adequate percentage of total costs financed by the Bank will be assessed on a case-by-case
basis according to the following criteria: (i) the country’s commitment to implement its overall
development program; (ii) the financing allocated by the country to sectors targeted by the Bank
assistance; and (iii) country’s budget situation and debt level”.

2.4.2 The policy indicates that the Bank will use Country Financing Parameters (CFPs) already
developed for 38 countries by World Bank. The CFPs for Rwanda specify that World Bank can
finance up to 100% of total project cost on a case-by-case basis. The CFPs further indicate a very
strong commitment of GoR to its development programme but is constrained by limited budgetary
resources. Donors finance about 55% of the total budget and 75% of the development budget.
Furthermore, Rwanda has been categorized as an “all-grant” country in view of its debt
sustainability level. Thus, the proposal that ADF finances 100% of the total cost of this project is
justified both by the new Bank policy and the CFPs for Rwanda. Moreover, the UA 1.0 million is
earmarked in the ADF-XI country allocation.

2.4.3 Tables 2.2, 2.3 and 2.4 show project cost by component, financing source and category of
expenditure while Table 2.5 provides the expenditure schedule by component. These costs
estimated have been prepared on the basis of information obtained from recently approved Bank
supported projects, and from discussions with SPU and IPAR. They include 10% physical
contingency and 3% annual price contingency. Annex B1 provides the detailed cost estimates.

Table 2.2: Project cost estimates by component

USD (‘000) UA (‘000)
Component FC LC TC FC LC TC % of FC % of
Base Cost

A Support to SPU 963.00 0.00 963.00 625.21 0.00 625.21 100.0 73.35%

B Support to IPAR 129.50 25.00 154.50 84.08 16.23 100.31 83.82 10.03%

C Project Coordination 25.50 169.87 195.37 16.55 110.29 126.84 13.05 12.68%
Base Cost 1,118.00 194.87 1,312.87 725.85 126.52 725.85
Physical Cont. (10%) 118.85 19.49 131.29 72.59 12.65 85.24
Price Cont. (3%) 81.57 14.54 96.11 52.96 9.44 62.40
Total Cost 1,311.37 228.90 1,540.27 851.39 148.61 1,000.00

Table 2.3: Project cost by source of financing [UA’000]

Source FC LC Total Cost % total
ADF Grant 851.39 148.61 1,000.00 100.00
GoR 0.00 0.00 0.00 0.00
Total project cost 851.39 148.61 1,000.00 100.00

Table 2.4: Project cost by category of expenditure

( USD ’ 000) (UA ‘000)
FC LC TC FC LC TC % FC
a. Consultancy Services 1,071.00 127.20 1,198.20 695.33 82.58 777.91 89.38
b. Goods 47.00 25.00 72.00 30.52 16.23 46.75 65.28
c. Operating Costs 0.00 42.67 42.67 0.00 27.70 27.70 0.00
Total Base Cost 1,118.00 194.87 1,312.87 725.85 126.51 852.36 85.16
Physical Contingency 111.80 19.49 131.29 72.58 12.65 85.24 85.16
Price Contingency 81.57 14.54 96.11 52.96 9.44 62.40 84.87
Total Cost 1,311.37 228.90 1,540.27 851.39 148.61 1,000.00 85.14
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Table 2.5: Expenditure schedule by component [UA ‘000 equivalents]

Components 2009 2010 2011 Total
Support to SPU 154.62 285.18 293.74 733.54
Support to IPAR 20.89 55.20 41.56 117.64
Project Coordination 31,24 57.92 59.66 148.82
Total project cost 206.75 398.30 394.95 1,000.00

2.5 PROJECT’S TARGET AREA AND POPULATION

2.5.1 The project targets knowledge development efforts in the public, non-government not-for
profit and private sectors, aimed to improve overall public sector effectiveness and private sector
competitiveness. Thus, the target population includes professional staff of SPU, IPAR and private
sector operators.

2.6 PARTICIPATORY PROCESS FOR PROJECT IDENTIFICATION, DESIGN AND IMPLEMENTATION

2.6.1 The CSP Dialogue provided an opportunity for consultations with stakeholders in civil
society, private sector and the donor community on the broad orientations of the Bank’s proposed
lending program, including the proposed project. SPU is supporting the realization of a broadly
shared vision (Vision 2020) and EDPRS, both developed through participatory processes. The LIP
is borne from consultations between government and the PSF, which is the umbrella body
representing Rwanda’s private sector. IPAR’s establishment followed wide consultations with
stakeholders in government, private sector and civil society.

2.6.2 The preparation process for this project entailed regular interaction and close consultation
with management and staff of the SPU, IPAR and PSCBS. Key finding include the need to keep
project design simple, and focused on a few beneficiary institutions deemed to be critical for policy
analysis/advocacy, and improving strategic leadership capability in Rwanda. Also, in view of PSCBS
current work load and certain weaknesses noted in coordination and financial management, the project
makes provision for a project management specialist to coordinate all technical aspects related to the
project implementation (including preparation of TORs, and quarterly progress reports, monitoring &
evaluation) and for close liaison with the two beneficiary institutions. An accountant will also be
recruited to prepare and manage the project accounts and records. Proposed salaries take into account
the need to attract and retain competent staff, and are consistent with proposals made by CEPEX and
MIFOTRA; which have already been approved for implementation by GoR to address the problems of
high staff turnover in public sector projects. The launching workshop will provide another
opportunity for stakeholders to review the activity plans and have a shared understanding of the
focus, scope and implementation arrangements.

2.7. BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN

2.7.1 The design of SPSD incorporated lessons learnt during the implementation of similar Bank
financed projects in Rwanda. In the past, the Bank has provided support to MINECOFIN for the
elaboration and management of the Public Investment Program, and an institutional support project
to strengthen environmental management in Rwanda. Key lessons learned and taken into account in
the proposed project are: (i) importance of a participatory approach in the project design and need
for flexibility regarding implementation arrangements; (ii) critical dependence of project success on
the quality of technical assistance personnel recruited; and (iii) need for effective project
management on the part of both the beneficiary and the Bank.

2.7.2 In recent years, performance of the Bank’s portfolio in Rwanda has improved
significantly, as reflected in a sharp increase in the disbursement rate, which stood at 61% in
December 2008, compared to 12.1% in November 2005 when the Rwanda Field Office (RWFO)
was established (see Appendix II). A Country Portfolio Review conducted as part of the CSP
preparation revealed that lack of project readiness for implementation (poor quality at entry) as the
 7
main shortcoming in the Bank’s portfolio in Rwanda. To address this problem, GoR and the Bank
have adopted a “readiness filter” for projects entering the lending pipeline. Enhanced ownership
deriving from this approach will help ensure early start up of project activities, and their
implementation within schedule.

2.8 KEY PERFORMANCE INDICATORS

2.8.1 Project impact will be assessed by progress in the following outcomes:
™ Knowledge management institutionalised, reflected in the implementation of at least
6 “quick wins” major strategic initiatives by 2011 based on the policy briefs and
analytic products prepared.
™ Better alignment of strategies with the EDPRS objectives; reflected in
investment/GDP ratio increased from 19.2% in 2008 to 23.4% by 2011, and % of
sectors that achieved a CPAF score of at least 80%.
™ New investments and businesses generated for cluster development: Action Plan
approved by end 2010; and at least one major cluster investment program started in
2011.

An effectively functioning IPAR:

™ The 5 Year research program approved by March 2010 and the preparation of at
least 5 analytic products/research papers to influence public policy.
™ Networks and partnerships established with five research institutions.

III PROJECT FEASIBILITY

3.1 ENVIRONMENTAL AND SOCIAL IMPACTS

Environment

3.1.1 The environmental categorisation of the project is 3. The project therefore has no potential
direct negative environmental and social impacts.

Climate Change

3.1.2 The project has no potential direct negative impact on climate change.

Gender

3.1.3 Both the SPU and IPAR are working in compliance with the National Employment Policy
(2005), which seeks to promote employment among women and youths. Women play a major role in
Rwanda’s economy, as they account for 55% of the economically active population. Many of them are
engaged in SMSEs and dominate the retail trade, handicrafts and food processing sub-sectors. Women
dominate the association based micro and small scale enterprise where they account for 63% of the
membership. Therefore in improving the business environment of SMSEs, the project will have a
positive impact on women. IPAR is headed by a woman, and it is envisaged that some of its research
products will relate to gender analysis and gender mainstreaming issues.

Social

3.1.3 No direct negative social impact is expected since the institutional capacity building activities
will not lead to redundancies. Rather, there will be positive social impact on poverty reduction, vis-à-vis
increased private sector employment which the expected improved business environment will generate.
 8
Involuntary resettlement

3.1.4 The project will not involve any involuntary resettlement.

IV IMPLEMENTATION

4.1 IMPLEMENTATION ARRANGEMENTS

4.1.1 Implementation Structure: Project implementation will be mainstreamed within existing
institutions and structures, in line with GoR’s programmatic approach to capacity building, and the
efforts to generalize the use of national systems of project management, in compliance with the
Paris Declaration. Hence, there will be no standalone project implementation unit. PSCBS under
MIFOTRA will serve as the Executing Agency, with the responsibility for overall coordination of
project implementation activities. The Director General (DG) of PSCBS will coordinate day to day
activities in close liaison with Director of Cabinet (Office of The President) and Executive Director
of IPAR. To this end, Memoranda of Understanding (MOU) will be executed between PSCBS and
each of (i) the Strategy and Policy Unit (SPU) and (ii) the Institute for Policy Analysis of Rwanda
(IPAR).These MOUs shall provide a clear framework for cooperation, enhance commitment and
sustain the partnerships. The MoUs shall spell out the list of activities to be implemented;
obligations of each party; measures to safeguard implementation; provisions for modification and
duration. The execution of the MOUs will be a condition for first disbursement of the ADF grant.

4.1.2 The DG for PSCBS will be supported by a project management specialist and accountant
engaged on a full time basis to support project implementation. Complementary support will also
be provided by PSCBS financial management, procurement, internal audit, and monitoring and
evaluation units. This arrangement is in line with the Secretariat’s mandate to coordinate all
capacity building support projects in Rwanda. In consultation with SPU and IPAR, the PSCBS
shall be responsible for procurement activities under the project. All procurement of consulting
services and goods financed by ADF will be in accordance with Bank Group Rules and Procedures
for Procurement of Goods and Services.

4.1.3 The DG of PSCBP shall also put in place financial management arrangements for the
project in accordance with ADF fiduciary requirements. Disbursement methods to be used for this
project include (i) Direct Payment, and (ii) Special Account methods. A Special Account will be
opened at National Bank of Rwanda (BNR) for purposes of depositing ADF grant proceeds.
Subsequent replenishments of the account will be subject to PSCBS providing sufficient
justification for the use of at least 50% of the most recent deposit and 100% of the other older
advances. The opening of a Special Account at the National Bank of Rwanda will be a condition
for first disbursement of the ADF grant.

4.1.4 The MSCBP has demonstrated adequate capacity in effectively coordinating three ongoing
capacity building projects funded by World Bank, the ACBF and Belgian Technical Cooperation,
and implemented by various GoR agencies. PSCBS will have primary responsibility for all aspects
of project management, including procurement and financial management, monitoring and
evaluation. PSCBS will also provide support to the beneficiary institutions; namely SPU and IPAR,
through the project management specialist and accountant.

4.1.5 Procurement: All procurement of goods and works and acquisition of consulting services
financed by ADF will be in accordance with Bank's Rules and Procedures for Procurement of Goods
and Works or, as appropriate, Rules and Procedures for the Use of Consultants, using the relevant
Bank Standard Bidding Documents. The DG of PSCBS will be responsible for procurement of
goods/works/service contracts, consulting services, training and miscellaneous items as detailed in
 9
Annex B4, and the specific responsibilities of Implementing Agencies shall be detailed in the
MOUs. The resources, capacity, expertise and experience of PSCBS are described in Annex B3.

4.1.6 Particular Arrangements: Post Review procedure has been authorized in the conditions
specified in Annex B4. Single Source Selection will be required for the services of Professor Michael
Porter and Associates for the LIP related to cluster development. Professor Porter is a renowned
figure recognised globally for his special expertise in the field of competitiveness. He is a member of
the President’s Advisory Council (PAC) established by the President of Rwanda to advise him on
development matters. The LIP is a continuation of work carried out by this firm on not-for-profit basis.

4.1.7 Financial Management: An assessment of PSCBS financial management arrangement for

the implementation of the project concluded that although they do not have prior experience in
managing Bank financed projects, they have experience in managing similar projects under World
Bank financing, whose resources are satisfactorily managed. Moreover, with the proposed addition
of a project management specialist and accountant to provide dedicated services for the project,
PSCBS has in place requisite staffing and systems to ensure satisfactory management of project
resources. The detailed financial management assessment is attached in Annex B3.

4.1.8 Project Audit: Project financial statements audited by independent auditors will be
prepared and sent to the Bank in accordance with the Bank’s guidelines stated in Annexe B5.

4.2 MONITORING AND EVALUATION

4.2.1 Monitoring and Evaluation mechanisms will be coordinated by Director General of
PSCBS, in close collaboration with SPU, IPAR and the PSF. Under the World Bank funded
PSCBP, the Secretariat has put in place an M&E framework that captures key information on
ongoing and planned capacity building initiatives as they relate to the MSCBP. As it was
envisioned that PSCBP will become the focal point for donors’ capacity building interventions, the
same system will be used to provide the basic data for M&E for all activities and results for the
proposed project. While PSCBS shall coordinate the preparation of QPRs and synthesising results
of all activities under the project, its work will depend on contributions by SPU and IPAR. The
M&E framework is linked to the national M&E system for EDPRS.

4.2.2 The Bank’s Rwanda Field Office (RWFO) will be closely involved in project supervision
and monitoring. This will include review of QPRs, vetting of procurement documents and
disbursement applications. In addition to Quarterly Progress Reports and Supervision reports, a
Mid-term Review (MTR) report will be prepared by the Bank and the Recipient 15 months after
effectiveness of the ADF grant. Specific monitoring milestones are indicated in Table 4.1 below.

Table 4.1: Specific Monitoring Milestones

Timeframe Milestone Monitoring process/ feedback loop

July 2009 Grant approval by the Board Summary of Board decisions; Letter
to the government
July 2009 General Procurement Notice UNDB AfDB website
Specific Procurement Notice National/Regional News papers
July 2009-Dec. 2011 Implementation of activities QPR and supervision reports
Dec. 2010 Mid-term Review MTR Report
Aug 2010, 2011 & Annual project audit reports Annual audit reports
Jan. 2012
December 2011 Project Closed Project Completion Report
December 2012 Last disbursement Disbursement ledger
 10
4.3 GOVERNANCE
4.3.1 GoR has adopted a strong policy stance for good governance, characterised by zero
tolerance for corruption in order to promote transparency and accountability in the management of
public resources. Corruption allegations against public officials are routinely investigated and
brought to the courts for prosecution. Good governance also constitutes the third flagship of
EDPRS. Transparency International’s Corruption Perception Index for 2008 rated Rwanda as the
least corrupt country in East Africa while Rwanda also ranked 18 out of 48 countries in the 2008
Ibrahim Index of African Governance.

4.3.2 A Public Expenditure and Financial Accountability (PEFA) assessment completed by the
World Bank in 2007 and Fiduciary Risk Assessment conducted jointly by DFID and the Bank in
2008 found many aspects of Rwanda’s public financial management (PFM) system to be sound,
and the overall level of fiduciary risk moderate. Building on these gains, GoR is implementing an
Action Plan for PFM reform, focusing mainly on strengthening institutional capacity, especially in
financial management and reporting, budget execution and oversight. As governance constitutes a
core thematic area within the remit of SPU, the proposed project will reinforce the Presidency’s
strategic leadership role in championing good governance practices.

4.4 SUSTAINABILITY
4.4.1 Knowledge development to drive evidenced based policy making, private sector
innovation and enhance strategic capability is a high priority for GoR. Institutional sustainability
for SPU and IPAR will be enhanced by the measures being put in place to ensure staff retention and
motivation. These include transparent mechanisms for peer recognition, clear career paths and
continuous staff exposure to cutting edge analytical tools and knowledge products. For its part,
IPAR is preparing a policy guideline that will provide a clear framework for providing consultancy
services commissioned by clients in Government, donor community and Non-Governmental
Organisations. A key aspect of the proposed policy will be providing financial incentives for
research staff.

4.4.2 As domestic capacity improves, and both the SPU and IPAR demonstrate that knowledge
products generated are relevant for policymakers, donor community and private sector, their
funding bases are likely to improve. In this regard, SPU would be fully financed from the national
budget, and over time, IPAR could be funded largely through earnings from research and
consulting services, in addition to donations and contributions from expanding membership. The
Learning and Innovation Program, once it gets firmly established, could be funded through cost–
recovery mechanisms built into the program.

4.5 RISK MANAGEMENT

4.5.1 The risks to project success stem primarily from (i) possibility that products generated by
SPU and IPAR are not used by government decision makers; (ii) ability of SPU and IPAR to attract
and retain the professional staff; (iii) sustaining private sector interest in the cluster development
program; and (iv) implementation risks that may arise from poor coordination between the PSCBS,
SPU and IPAR. Mainstreaming this project in existing government structures and its strategic
location in an apex agency partially mitigate the risk that decision makers may not use outputs
generated by the project. Moreover, the analytic products for the National Leadership Retreat and
PAC will be provided mainly on a demand responsive basis, which enhance prospects for their
utilisation by senior policy makers and the MDAs. Strong government ownership of the project and
active participation in the project design is also a strong mitigating factor.

4.5.2 As regards the risk of staff turnover, although this is recognised as a generic problem in
Rwanda’s public sector, the risk is partially mitigated by (i) the increasing pool of potential recruits
from higher institutions of learning in Rwanda, which are expanding their graduate programs; and
 11
(ii) the drive to attract the Rwandan Diaspora and extend the field of recruitment to the wider EAC
region. These will help ease the current supply constraints, at least for the short-term. Additionally
for the SPU, the high profile nature of the staff positions and career development prospects they
offer could provide a strong mitigating factor in attracting and retaining talent. With regard to the
risk of limited private sector interest in cluster development, this will be partially assuaged by
recruiting experts with requisite experience and track record of solid performance that can inspire
the confidence of participants in the program. Finally, coordination risks will be minimised due to
limited number of beneficiary institutions, execution of MOUs that clearly delineate roles and
responsibilities of each party, as well as the reinforcement of PSCBS capacity in the areas of
project and financial management.

4.6 KNOWLEDGE BUILDING

4.6.1 The project will contribute to capacity building for knowledge generation and sharing,
institutionalise knowledge management as well as develop strategic capability in Rwanda,
underpinned by strong links between policy research and industry. It also seeks to enhance
innovation, productivity growth and competitiveness by bringing expert knowledge of best business
practices in cluster development directly to private sector operators.

V. FINANCING INSTRUMENT AND CONDITION

5.1 FINANCING INSTRUMENT

5.1.1 The financing instrument proposed is a grant of UA 1.0 million to the Republic of
Rwanda.

5.2 CONDITIONS
5.2.1 Conditions precedent to Entry into force of the Grant Agreement: The grant protocol of
agreement shall enter into force on the date of signature by the Recipient and by the Fund.

5.2.2 Conditions precedent to First Disbursement: The obligations of the Fund to make the
first disbursement shall be conditional upon the fulfilment of the following conditions:

• Provide evidence, in form and substance satisfactory to the Fund, of the execution of
Memoranda of Understanding between PSCBS and each of (i) the Strategy and Policy
Unit (SPU) and (ii) the Institute for Policy Analysis of Rwanda (IPAR). (para. 4.1.1);

• Provide evidence, in form and substance satisfactory to the Fund, of the opening of one
(1) Special Account to deposit the ADF grant proceeds. (para. 4.1.3).

5.3 COMPLIANCE WITH BANK POLICIES

5.3.1 This project complies with all applicable Bank policies.

VI. RECOMMENDATION

Management recommends that the Board of Directors approve the proposed grant of UA 1.0
million to the Republic of Rwanda for the purposes and subject to the conditions stipulated in this
report.
 APPENDICES
Appendix I: RWANDA – KEY DEVELOPMENT INDICATORS

1990 2008 *
Area ( '000 Km²) 30,323 80,976
Total Population (millions) 7.3 10.0 985.7 5,523.4
Population growth (annual %) -0.1 2.9 2.3 1.4
Life expectancy at birth, total (years) 32 47 55 66
Mortality rate, infant (per 1,000 live births) 127.3 111.0 83.9 53.1
Physicians per 100,000 People … 2.7 39.6 78.0
Births attended by skilled health staff (% of total) 28.0 38.7 51.2 59.0
Immunization, measles (% of children ages 12-23 months) 55.0 99.0 83.1 81.0
School enrollment, primary (% gross) 69.6 147.4 99.6 106.0
Ratio of girls to boys in primary education (%) 98 101 92 100.0
Illiteracy rate, adult total (% of people ages 15 and above) … … 33.2 26.6
Access to Safe Water (% of Population) 65.0 65.0 64.3 84.0
Access to Sanitation (% of Population) 29.0 23.0 37.6 53.0
Human Develop. (HDI) Rank (Over 179 Countries) … 165 … …
Human Poverty Index (% of Population) … 37.3 38.7 …

Economy 2000 2007 2008 2009**

GNI per capita, Atlas method (current US$) 250 320 … …
GDP (current Million US$) 1,735 3,339 3,816 4,330
GDP growth (annual %) 8.1 7.9 8.5 6.6
Per capita GDP growth (annual %) 1.5 5.0 5.5 3.6
Gross Domestic Investment (% of GDP) 18.3 21.2 21.0 19.2
Inflation (annual %) 3.9 9.1 14.4 8.8
Budget surplus/deficit (% of GDP) 0.8 -1.7 -0.3 -0.1
Trade, External Debt & Financial Flows 2000 2007 2008 2009**
Export Growth, volume (%) -1.8 6.2 22.8 15.4
Import Growth, volume (%) -14.6 31.0 17.7 5.6
Terms of Trade (% change from previous year) 6.1 13.7 -10.7 5.9
Trade Balance ( mn US$) -159 -404 -488 -444
Trade balance (% of GDP) -9.2 -12.1 -12.8 -10.3
Current Account ( mn US$) -45 -168 -303 -254
Current Account (% of GDP) -2.6 -5.0 -7.9 -5.9
Debt Service (% of Exports) 28.9 3.0 1.9 1.8
External Debt (% of GDP) 81.8 17.4 17.3 21.0
Net Total Inflows ( mn US$) 318.2 724.8 … …
Net Total Official Development Assistance (mn US$) 321.5 712.6 … …
Foreign Direct Investment Inflows (mn US$) 8.1 67.2 … …
External reserves (in month of imports of goods & services) 5.1 7.0 6.6 …

Private Sector Development & Infrastructure 2000 2006 2007 2008

Time required to start a business (days)
 APPENDIX II: ADB Portfolio in Rwanda
Amount Approval Effectiveness Closing Disbursement
Project Sector (UA) date date date Rate (%)
Forestry Management Project (PAFOR) Agriculture 8,900,000 14.11.2001 01.07.2002 31.12.2009 66.50
Dairy Cattle Development Support Project
(PADEBL) Agriculture 13,500,000 31.10.2000 04.07.2001 30.06.2009 82.6
Integrated Development & Management of In-land
Lakes –PAIGELAC Agriculture 13,760,000 06.10.2004 10.05.2005 30.06.2011 15.6
Integrated Development & Management of In-land
Lakes –PAIGELAC Agriculture 1,000,000 06.10.2004 10.05.2005 30.06.2011 10.4
Institutional Support for Environmental
Management (PAIGER) Environment 1,000,000 09.07.2003 02.06.2004 30.12.2008 75.2
Roads Infrastructure Project (PIR) Transport 13,500,000 08.10.2003 12.10.2004 30.12.2009 67.7
Roads Infrastructure Project (PIR) Transport 1,500,000 08.10.2003 06.11.2003 30.12.2009 39.2
Gitarama-Ngororero-Mukamira Road Project Transport 15,200,000 20.12.2004 08.09.2005 31.12.2009 46.67
Water
Rural Water Supply & Sanitation Project (AEPA) Sup/Sanitation 4,000,000 17.12.2003 30.03.2005 31.12.2009 88.0
Water
Rural Water Supply & Sanitation Project (AEPA) Sup/Sanitation 9,000,000 17.12.2003 30.03.2005 31.12.2009 79.8
Rehabilitation/Construction of Primary Schools and
KIST Social 20,780,000 02.12.1998 20.07.2000 31.12.2008 75.5
Support to Education Sector Strategic Plan Social 15,000,000 21.06.2006 11.10.2006 31.12.2011 53.3
Support to National AIDS Program Social 2,000,000 22.07.2003 01.06.2004 31.12.2010 99.5
Budget Support - Poverty Reduction Program Multi-Sector 33,000,000 18.07.2007 12.11.2007 31.12.2009 99.9
Urban Water & Electricity Supply Project (AEPE) Multi-Sector 11,770,000 09.07.2003 30.08.2004 30.12.2009 23.1
Urban Water & Electricity Supply Project (AEPE) Multi-Sector 1,000,000 09.07.2003 30.08.2004 30.12.2009 35.6

Recent Approvals
Board Effectiveness Closing
Project Sector Approval Date Date Amount (UA)
Support to Skills Development in Science
and Technology Social 11.11.2008 06.03.2009 31.12.2015 6,000,000
Competitiveness and Enterprise
Development Multi-Sector 29.12.2008 06.03.2009 31.12.2012 5,000,000

Poverty Reduction Strategy Support III Multi-Sector 29.12.2008 13.05.2009 31.12.2010 30,300,000
Total 41,300,000
 APPENDIX III

Related Projects Financed by the other Development Partners in Rwanda

Donor Project Amount
US$
World Bank CEDP-I 47.8
World Bank PSCBP 20.0
ACBF Three Capacity Building projects in public and 8.7
private sectors
Belgian Technical Cooperation Support to Capacity Development 7.0

APPENDIX IIIB: DEVELOPMENT PARTNERS’ SECTOR PRESENCE

European Commission

World Bank
US (USAID)
Netherlands

Switzerland
Luxemburg

UK (DFID)
UN System
Germany
Australia

Belgium
BADEA

Norway
Canada

Sweden
France

Japan
China
AfDB

Italy
IMF
Sector Group

Agriculture, Livestock, and Forestry ● ● ● ● ● ● ● ● ● ● ● ● ● ◙

Economic Governance and

◙ ● ● ● ◙ ● ● ● ● ● ●
Budget Support

Education ● ● ● ● ● ● ● ● ● ● ● ◙ ● ●

Energy ● ● ● ● ● ● ● ◙

Environment and Climate Change ● ● ● ● ● ◙ ●

Health and HIV/AIDS ● ● ◙ ● ● ● ● ● ● ● ● ● ● ● ●

ICT/ Science and Technology ● ● ◙

Public Administration and

● ● ● ● ● ◙
Capacity Building

Political Governance ● ● ● ● ● ● ● ● ●

Private Sector Development ● ● ● ● ◙ ●

Reintegration/Community
● ● ● ● ◙ ●
Development

Roads and Transportation ● ● ● ◙ ● ● ● ● ● ●

Water and Sanitation ◙ ● ● ● ● ● ● ● ●

◙ Current Lead Donor/Chair

● Active Donor
Source: AfDB - Rwanda 2008-2012 Country Strategy Paper for Rwanda
Appendix IV: Map of the Project Area
 TECHNICAL ANNEXES

A. Rwanda’s development agenda, sector brief and donor support

B. Terms of Reference for the Consultants
c.: Procurement Arrangements
D: Audit arrangements
E: Project preparation and supervision

Technical Annexes

Annex A. Country Development Agenda, Sector Brief and Donor’s Support

Annex A1. Country Development Agenda
Annex A2. Sector Brief: Rwanda’s Competitiveness, Investment Climate Profile and
Doing Business Indicators
Annex A3. Donor Support
Annex B1. Project Costs
Annex B2. Implementation Arrangements
Annex B3. Financial Management and Disbursement
Annex B4. Procurement Arrangements
Annex B5. Audit Arrangements
Annex B6. Environmental And Social Analysis
Annex C1. Strategy and Policy Unit
Annex C2. Institute for Policy Analysis and Research
Annex C3. Leaning and Innovation Program
Annex C4. Terms of Reference
 TECHNICAL ANNEXES

ANNEX A

A. RWANDA’S DEVELOPMENT AGENDA, SECTOR BRIEF AND DONOR

SUPPORT

A.1 DEVELOPMENT AGENDA

The main thrusts of Rwanda’s development agenda are articulated in Vision 2020, and the EDPRS
covering the period 2008-2012. The Vision envisages Rwanda as a middle income economy with a
healthier and better educated population, life expectancy increasing to 55 years, full literacy, and
per capita income of US$ 900 by 2020. The EDPRS aims to make Rwanda the most competitive
country in the region by 2012.

VISION 2020

Vision 2020 was completed in 2000 after wide-ranging consultations with the various stakeholders.
The strategic objectives, pillars, and selected performance and key outcome targets of the Vision is
summarized in Box 1.

Box 1. Thrusts and Targets of Rwanda’s Vision 2020

Strategic Objectives
(i) Maintenance of macroeconomic stability; (ii) Trans-formation from agrarian to a knowledge-based
economy; (ii) Fostering entrepreneurship and creating a productive middle class; (iii) Wealth creation and
reduction of aid dependency.

Pillars
(i) Good Governance and a capable state; (ii) Human resource development, with emphasis on science and
technology; (iii) Private sector innovation with private sector-led development; (iv) Infrastructure
development; (v) Productive high value and market-oriented agriculture; and (vi) Regional and international
integration.

Selected Performance Targets

(i) Annual growth rate of 8 percent; (ii) Population growth of 2 percent; and (ii) Investment rate of 30 percent
of GDP, with 20 percent of GDP by the private sector.

Key Outcome Targets

(i) 100 percent literacy by 2020; (ii) Infant mortality halved (50 per 1000 births) by 2020; (iii) Life
expectancy increased by 6 years to 55 by 2020; and (iv) Income inequality (measured by Gini coefficient)
reduced by 25% to 0.35 by 2020.

Source: Government of Rwanda, Vision 2020.

EDPRS

The EDPRS is a medium-term strategy for 2008-2012 aimed at putting Rwanda on the path to
meeting the MDGs and the Vision 2020 targets as well as making it the most competitive country
in the region. It comprises three “flagship” themes: (i) Sustainable Growth for Jobs and Exports;
(ii) Vision 2020 Umurenge; and (iii) Good Governance.

1
Flagship 1- Sustainable Growth for Jobs and Exports: This flagship aims to boost growth by
enhancing competitiveness, private sector investment and innovation, agricultural productivity,
exports, and ICT competences. These require measures to lower the cost of doing business,
including promotion of technical education to alleviate the shortage of skilled labor and enhance
private sector innovation, and capacity building programs in science, technology, and innovation.
Other measures include improving economic infrastructure, adopting modern technologies to
enhance productivity, and strengthening the financial sector.

Flagship 2 - Vision 2020 Umurenge: This flagship aims to address extreme poverty and
vulnerability, particularly in the rural areas. It has three components: (i) public works aimed at
creating off-farm employment and building community assets; (ii) development of cooperative and
small and medium-sized enterprises (SMEs), with access to credit to foster entrepreneurship; and
(iii) provision of social services and assistance to landless families that are unable to participate in
public works programs.

Flagship 3 - Good Governance: This flagship focuses on maintenance of peace and security;
improved relations with all countries; promotion of national unity and reconciliation; justice,
human rights and the rule of law; and decentralization, public financial management and service
delivery. It complements ongoing programs aimed at creating well-defined property rights,
business friendly regulations, efficient public administration, and the elimination of corruption.

A.2 Sector Brief: Rwanda’s Competitiveness, Investment Climate Profile and Doing
Business Indicators

(i) Competitiveness1

Rwanda has achieved some of the basic requirements for “factor driven” economies to be
competitive vis-à-vis similar countries in the region. It has created and reformed its public
institutions. Macroeconomic stability was achieved in the past decade, and increased social
spending has raised human capital through better healthcare and provision of primary education.2
However, economic infrastructure remains a binding constraint on further improvement.
Industrial and household demand for electricity is not met and there is little surplus in the region for
import. The cost of electricity is about US 0.21 cents per kilowatt hour, compared to US 0.08 cents
in Kenya and Uganda, and US 0.06 cents in Tanzania. Rwanda’s landlocked status coupled with
poor roads in transit countries and inefficient port services in Mombasa and Dar es Salaam have
raised costs for Rwandan traders. The cost of transporting a 40-foot container from Kigali to
Mombasa is around US$ 4,000, but without insurance. This is comparable to transporting the
container from the US to Mombasa. Rwanda’s entry into the East African Community and its
support to regional transport and energy infrastructure are targeted at increasing its
competitiveness.
To compete at the level of efficiency–driven economy, Rwanda will require “efficiency enhancers”
in a range of other areas. The country’s emphasis on education in science and technology is a step
in the right direction. It has reached a level of “technological readiness” comparable to, or better,
than that of her neighbours. The domestic market is small, however, and other attributes of an

1
Rwanda was not included in the recent GCI reports by the World Economic Forum/WB/AfDB. Consequently, lack of
data on the overall competitiveness index (and its components) poses a great challenge and leaves a gap in the analysis
of Rwanda’s global and regional competitiveness. This section draws on the analysis of competitiveness contained in
the 2008-2012 Bank Group CSP for Rwanda.
2
See World Economic Forum (2008)—other levels are “efficiency-driven” and “innovation-driven”.

2
efficiency-driven economy, labor and goods market efficiency, will likely take time to achieve.
Even here, membership of the East African Community is a good complement.
With regard to the role of the financial sector, Rwanda has prepared a Financial Sector Reform
Program and recent policies have sought to accelerate the development of microfinance institutions,
promotion of long-term savings and investment, and modernization of the payment system. The
Banque Populaire de Rwanda (UBPR), a cooperative bank, which holds over 50 percent of all
personal accounts, has been restructured and the holdings of other commercial banks have been
strengthened. In 2008, a Capital Markets Authority and a Stock Exchange were established.

(ii) Investment Climate Profile (2006)

Investment Climate Profiles are based on the World Bank’s Enterprise Surveys, which are
establishment level surveys designed to analyse the investment climate of the participating
countries. The surveys capture firms’ experience in a range of areas, including infrastructure,
access to finance, governance, regulation, tax policy, labour relations, conflict resolution,
infrastructural services, supplies and marketing technology and training. Every year, surveys cover
15-30 countries, with updates for each country every 3-5 years. Rwanda was included in the 2006
Survey. The survey reveals the top 10 factors perceived by entrepreneurs as constraints and the
percentage of firms identifying each factor as major or severe constraint. The results for Rwanda,
presented Fig.1 below, show that in all but three areas (tax rates, transportation and
telecommunications) Rwanda performed equal or better than the African average. The weak points
are again largely in the area of infrastructural deficiency, which has been identified as a critical
factor in Rwanda’s global and regional competitiveness and the high cost of doing business in the
country.

60

50

40

Rwanda
30
Africa

20

10

0
A B C D E F G H I J

Fig. 1: Top 10 constraints perceived by entrepreneurs

3
 Factor Rwanda’s Rating (%) Africa (%)

A: Electricity 55 55
B: Tax Rates 46 43
C: Access to Finance 34 46
(availability and Cost)
D: Transportation 26 17
E: Tax administration 21 25
F: Access to land 18 19
G: Macroeconomic Instability 18 32
H: Customs and trade regulation 13 15
I: Telecommunications 13 9
J: Anti-competitive or 13 32
informal practices

% = Percentage of firms identifying the factor as a major of very severe constraint.

(iii) Ease of Doing Business Indicators (2009)

Rwanda’s Doing Business indicators, though improving, are still weak in a number of areas.
Rwanda was ranked 139 out of 181 countries on the World Bank 2009 Ease of Doing Business
index compared with its ranking of 150 out of 178 countries in 2008 (or the revised figure of 148
for the year). Three of the other four countries in the region: Kenya (82), Uganda (111) and
Tanzania (127), ranked better than Rwanda in the 2009 survey, with only Burundi (177) trailing
behind Rwanda. Furthermore, Rwanda needs to improve its ranking in some specific indicators
including: dealing with licenses, employing workers, getting credit, protecting investors and trading
across borders. Low scores in these indicators have a particular negative impact on attracting
investors and growing exports. Rankings for Rwanda and other EAC countries are presented in
tables 1 and 2 below.
The Government is putting a lot of emphasis on improving the business environment to be able to
achieve the EDPRS objective of making Rwanda the most competitive country in the region by
2012. The Government has more than halved the number of procedures, now 8 on average, required
to process land acquisition, exports and imports. In addition, the Rwanda Development Board is
being established to consolidate the operations of 6 existing agencies, with a view to streamlining
investment and export promotion services offered to investors. The 2009 World Bank’s Doing
Business report recognized this effort and placed Rwanda as among the most active reformers of
business regulations worldwide this decade. In 2001 Rwanda introduced a new labour law as part
of the national reconstruction program. In 2002 it started property titling reform. In 2004 it
simplified customs, improved the credit registry and undertook court reforms and in 2007, it
continued with property registration and customs reforms.

4
 Table 1 : Rwanda’s Ease of Doing Business Rankings (2007-2009)

Selected Indicators 2007 2008 2009

Ease of Doing Business 150 150 139
1. Starting a business 55 63 60
2. Dealing with licenses 132 124 90
3. Employing Workers 95 95 93
4. Registering property 134 137 60
5. Getting credit 156 158 145
6. Protecting investors 165 165 170
7. Paying taxes 52 50 56
8. Trading across borders 178 166 168
9. Enforcing contracts 44 44 48
10. Closing a business 178 178 181
Source: Ease of Doing Business, World Bank 2009.

Table 2 : Rwanda’s Ease of Doing Business Rankings Relative to EAC countries (2009)
Regional
Selected Indicators Rwanda Kenya Tanzania Uganda Burundi Average

Ease of Doing Business 139 82 127 111 177 127

11. Starting a business 60 104 109 129 138 80

12. Dealing with 90
licenses 9 172 81 173 105
13. Employing 93
Workers 68 140 11 70 76
14. Registering 60
property 119 142 167 125 123
15. Getting credit 145 5 84 109 163 101
16. Protecting 170
investors 88 88 126 150 124
17. Paying taxes 56 158 109 70 114 101
18. Trading across 168
borders 148 103 145 170 147
19. Enforcing 48
contracts 107 33 117 170 95
20. Closing a business 181 76 111 51 181 120

Source: Ease of Doing Business, World Bank 2009.

A.3 DONOR SUPPORT

Development assistance to Rwanda has increased steadily since 2002, and was estimated at US$
695 million in 2007, about US$ 65 per capita. During 2005-2007, ODA contributed about 50
percent of the budget. The 10 main donors accounted for about 85% of total ODA while the
multilateral agencies among them, accounted for nearly 50 percent. Annex IIIB presents the lead
and active donors by sector in Rwanda. Donor coordination, led by the GoR, and has continued to
strengthen; dialogue between the GoR and the development partners is strong and regular and
several formal instruments have been established to foster dialogue, including an annual
Development Partners Forum in Kigali. Rwanda has elaborated an Aid Policy paper that provides a

5
framework for role and modalities of ODA and in particular, makes the case for budget support as
the preferred modality of assistance and for the use of country systems in the delivery of assistance.

Increasingly, aid is in the form of general or sector budget support. There are now ongoing SWAps
in the education and health sectors and SWAps in the energy, transport and agriculture sectors are
at planning stages. These SWAps are financed through general or sector budget support operations.
Development partners participate actively in sector working groups that support the development of
sector strategies and monitoring of sector issues and performance. The Bank is the lead donor for
the Water and Sanitation sector and was the lead donor for the Budget Support Group from January
to June 2008. It also plays an active role in eight other areas. Donors also consult closely in the
preparation of their assistance strategies, and increasingly share analytical and economic and sector
work (ESW). The Bank has collaborated with DFID’s on a Fiduciary Risk Assessment, and at the
request of the Government, is working with DFID’s and World Bank on growth analytics for
Rwanda.

6
ANNEX B1: DETAILED COST ESTIMATES

7
B2. IMPLEMENTATION ARRANGEMENTS

The Public Sector Capacity Building Secretariat (PSCBS) under MIFOTRA will serve as Executing
Agency, responsible for coordination of all project activities, in close collaboration with the
Implementing Agencies namely, the SPU and IPAR. Administratively, the Director General of
PSCBS reports to the Minister of MIFOTRA. PSCBS will have overall responsibility for
procurement of goods, consulting and training services, as well as the financial management
responsibilities for this project. Two separate Memoranda of Understanding (MOU) will be
executed between PSCBS and their clients (SPU and IPAR), which provide the framework of
cooperation, enhance commitment and sustain the partnerships. The MoUs shall spell
out the list of activities to be implemented; obligations of each party; measures to
safeguard implementation; provisions for modification and duration. The resources,
capacity, expertise and experience of the PSCBS have been reviewed on the basis of assessment of
past performance in the management of the World Bank funded Public Sector Capacity Building
Project.

On this basis, these are determined to be adequate to carry out the fiduciary responsibilities related
to procurement, reporting, accounting and financial management activities required for the project.
However, the Mid-Term Review of PSCBP, highlighted weaknesses in project coordination (given
the many beneficiary/implementing entities involved-17 for PSCBP, 12 for ACBF funded project
and more than 100 for the BTC funded project), and in financial management. These weaknesses
have affected the pace of project implementation, and will largely be mitigated under the proposed
SPSD project through the provision of a dedicated project management specialist and accountant.
The DG of PSCBS will have primary responsibility to coordinate and oversee the day to day
project management activities, supported on full time basis by a Project Management Specialist and
Accountant.

B3. FINANCIAL MANAGEMENT AND DISBURSEMENT

Financial Management

a) Implementing Entity: Financial management will be carried out by the Financial

Management Unit of MSCBP, which shall maintain project accounts and records, and shall prepare
the relevant financial reports, using TOMPRO accounting software. An Accountant will be
recruited to specifically manage the accounts and records of the project. Therefore, overall potential
risk for accounts keeping and financial reporting is low and the financial management system in
place can be relied upon to ensure that the project funds are used properly.

b) Disbursement and Flow of Fund: Project management will preferably open one
convertible currency Special Account into which the ADF grant proceeds will be deposited. An
initial deposit for an amount corresponding to six (6) months of activities as justified by an
estimated budget of activities will be made into the Special Account. The budget will be based on
the annual work program previously approved by the Bank. Subsequent replenishments of the
account will be subject to the MSCBP Secretariat providing sufficient justifications for the use of at
least 50% of the most recent deposit and 100% of the other older advances. The replenishment
request should also be accompanied by an estimated budget of activities for the next six months.
Direct payments to consultants will be effected during the course of project implementation as per
the Bank’s rules of procedure. Even though PSCBS personnel are experienced in the World Bank’s
disbursement procedures, which are similar to Bank’s procedures, the Project Management should
familiarise themselves adequately with ADF procedures to ensure smooth disbursements.

8
c) Staffing: The project’s accounts and records will be maintained by the Finance
Management Specialist of PSCBS with the help of the project accountant. The PSCBS is fairly
adequately staffed and has well defined job profiles and terms of reference for each post. The staff
are reasonably qualified and holders of degrees in accounting and management. PSCBS staff have
also benefited from World Bank organized training on its procedures, which are similar to those of
African Development Bank Group.

c) Accounting Policies and Procedures: Similar to other government Ministries and

departments, PSCBS utilises an accounting manual - Accounting Regulations (Volumes I, II and
III), which describes inter alia financial and accounting policies and procedures. The Manual also
covers internal audit function, monitoring and evaluation, personnel management and procurement.

d) Internal and External Audit: The PSCBS has a well functioning internal audit unit. The
Internal auditor will ensure that the project management system is efficient and that all operations
are carried out with professionalism, and comply with Bank’s fiduciary requirements. The internal
auditor reports directly to the Director General. The internal auditor will provide reports based on
the review of the project internal control systems and follow up of the recommendations of the
external audit. External audits will be carried out each fiscal year by an independent auditor.

e) Reporting and Monitoring: PSCBS has a Monitoring & Evaluation Specialist who will be
responsible for monitoring and reporting on the performance of the overall project
activities/objectives and to work closely with the beneficiary institutions (SPU and IPAR) to ensure
that the results are efficiently and effectively monitored. Each year, the M&E section prepares a
report. There is a need to define benchmark indicators at the beginning of the project in order to
serve as baseline to monitor progress and project objectives.

f) Information Systems: PSCBS currently uses TOMPRO accounting software and conducts
in house backups for its financial data. Although the software permits the production of reports
directly, its programming has limitations because it is not integrating the budgeting and accounting
functionalities. The Government is also piloting PublicBooks accounting software, under the
Integrated Financial management System, which if successful, is expected to be rolled out during
the new budget year starting July 2009. While GoR is upgrading its information systems, the
project will utilise the TOMPRO, which can provide reports in line with the Bank’s requirements.

Country Financial Systems

In the recent past years, GoR has undertaken many studies and assessments of its PFM system. The
following assessments have been conducted: Country Financial Accountability Assessment
(CFAA) in June 2005, Public Expenditure and Financial Management Assessment (PEFA) in
November 2007 and the Fiduciary Risk Assessment (FRA) in June 2008. The FRA, which is based
on the PEFA scores, found that the overall level of fiduciary risk is moderate but the system is still
vulnerable. The Government has also adopted a PFM action plan to guide reforms in modernizing
PFM at central and local government levels. However, retention of staff in ministries, including the
Ministry of Finance and Economic Development and other public financial management functions
continues to pose a major handicap. High staff turnover rate jeopardizes the implementation and
sustainability of reforms. The Government recognizes this problem and is considering various
options for dealing with it.

9
B4. Procurement Arrangements
Summary of Procurement Arrangements

Project Categories
NCB Other* Short List Non- Total
Bank-
Funded
1. Goods
2.1 Office Equipment (for SPU) [0.00 ] [0.014] [0.00] [0.014]
2.2 Workshop materials &
Publications (IPAR) [0.00] [0.035] [0.00] [0.035]

3. Service Contracts
3.1 Project Mgt Specialist [0.00] [0.00] [0.048] [0.048]
3.2 Accountant [ 0.00] [0.00] [ 0.048 [0.048]

4. Consulting Services
4.1 Management Support to SPU [0.00] [0.00] [0.481] [0.481]
4.2 IPAR Research Program [0.00] [0.00] [0.080] [0.080]
4.3 Audit Services [0.00] [0.00] [0.019] [0.019]

5. Training
5.1 LIP (Cluster Devt. Program) [0.00] [0.236] [0.00] [0.236]

6. Miscellaneous
6.1Operating Costs [0.00] [0.029] [ 0.00] [0.029]

TOTAL [0.00] [0.314] [0.676] [ 0.990]

* Other may be LIC, International or National Shopping, Direct Purchase or Force Account.
+Figures in brackets [ ] are amounts financed by the Bank Group.

CONSULTING SERVICES

Procurement of consulting services related to Technical Assistance to SPU and IPAR, and studies
will be carried out by consulting firms or individual consultants, through contracts valued at UA
0.561 million. The process for selecting firms shall be through Short List and the method for
evaluation shall be Quality Based Selection (QBS). For individual consultants, the selection method
shall be based on the Consultants’ Qualifications (CQS), in accordance with Bank’s procedures set
out in the Rules and Procedures for Use of Consultants (2008 Edition). For contract amounts valued
at less than UA 200,000 the Borrower may limit advertisement for the procurement to national or
regional newspapers. However, any eligible consultant who wishes to provide the requested
services may express his/her desire to be short-listed. For contract amounts valued at more than UA
200,000 for consultancy services, advertisement for the procurement must be placed in the UN
Development Business Journal and the Bank’s website. .

10
GOODS

Contracts for goods such as computer and office equipment for SPU, and workshop materials and
publications for IPAR totalling UA 49,000, estimated to cost less than UA 20,000 per contract and
not more than UA 49,000 in aggregate, will be procured through Shopping procedures in
accordance with the Bank’s Rules and Procedures for the Procurement of Goods and Works (2008
Edition). These constitute mainly off the shelf items that are fairly standard and generally available
in Rwanda and the region. Domestic and regional preferences or Advance Procurement Action
(APA) will not apply.

TRAINING
Procurement of training related to Cluster Development will be carried out by the SPU through
contract(s) valued at UA 236,000. The selection method chosen is direct contracting with Professor
Michael Porter and Associates of Harvard University. The selection method chosen is Single
Source Selection (SSS) as this is a continuation of previous work carried out by the consultants. For
contract amounts valued at less than UA 200,000 for consultancy services, the Recipient may limit
advertisement of the procurement to national or regional newspapers. However, any eligible
consultant who wishes to provide the requested services may express his/her desire to be short-
listed. Prequalification and Advance Actions for the Acquisition of Consultancy Services will not
apply.

MISCELLANEOUS

Procurement of miscellaneous items [office supplies, printing services and communications] for a
total amount estimated at UA 29,000 will be carried out by PSCBS through shopping procedures.

GENERAL PROCUREMENT NOTICE

The text of a General Procurement Notice (GPN) will be agreed with the PSCBS and it will be
issued for publication in UN Development Business Journal and the Bank’s website, upon approval
by the Board of Directors of the Grant Proposal.

REVIEW PROCEDURES

The following documents are subject to review and approval by the Bank before promulgation: (i)
Specific Procurement Notices, (ii) Tender Documents or Requests for Proposals from Consultants,
(iii) Tender Evaluation Reports or Reports on Evaluation of Consultants' Proposals, including
recommendations for Contract Award, and (iv) Draft contracts, if these have been amended from
the drafts included in the tender invitation documents.

POST REVIEW

Contracts for goods and services up to an amount of RWF 100 million (UA 121,680) will be
approved by PSCBS, within the thresholds authorised by RPPA, and shall be subject to post review
by ADF. Procurement documents, including solicitations of price quotations, evaluation sheets and
contract awards will be kept at PSCBS for periodic review by ADF supervision missions. The
procurement post review audits on the correctness of the procurement activities will be carried out
before submission of the disbursement application or during the first supervision mission after the
procurement activities are completed. However, the Bank reserves the right to conduct its
procurement audit at any time during project implementation. This review will determine the need
for modifications and improvement of the procurement arrangements. Information on procurement

11
processing will be collected by PSCBS quarterly and shall be included in detail in the Project
Quarterly Progress Report to be submitted to ADF.

PROCUREMENT PLAN
The Bank shall review the procurement arrangements proposed by the Recipient in the
Procurement Plan for its conformity with the Grant Protocol of Agreement and its Rules. The
Procurement Plan shall cover an initial period of at least 18 months. The Recipient shall update the
Procurement Plan on an annual basis or as needed always covering the next 18 months period of
project implementation. Any revisions proposed to the Procurement Plan shall be furnished to the
Bank for its prior approval.

NATIONAL LAW AND REGULATIONS

The national procurement laws and regulation governing public procurement in Rwanda have been
reviewed by the Government using the OECD/DAC Methodology for Assessment of the National
Procurement System (similar to CPAR exercise) in 2007. In May 2008, a World Bank procurement
mission reviewed and updated the assessment. The procurement regulations as well as the standard
bidding documents (SBDs) have been adopted at the beginning of 2008 and published. The legal
text establishing the Rwanda Public Procurement Authority (RPPA) which is generally in line with
international best practice and the COMESA directives and includes all functions that belong to a
modern procurement regulatory and oversight body has been adopted and gazetted in February
2008. RPPA’s Board of Directors and Director have also been appointed. Independent review
panels have been set up at the national and district levels according to the provision of the Law, and
bidders on public procurement contracts now have access to independent recourse to appeal
contract awards. The RPPA conducted procurement audits on sixty six procuring (66) entities in
FY07 and audits of eighty (80) procuring entities was scheduled for FY08. Some capacity building
activities related to training and staffing have been undertaken to strengthen the capacity of the
public procurement system.

The overall assessment carried out using OECD/DAC benchmark assessment indicated that 56% of
the foundations of the system are now in place, compared to 41% in 2007. The future challenges
remain the full functioning of RPPA, the development and implementation of a sustainable capacity
building strategy, the integration of public procurement in budget preparation, and the improvement
of transparency and efficiency in the procurement process. Pursuant to the harmonisation and
alignment agenda of the Paris Declaration, and the Accra Agenda for Action, the Bank is currently
working with the World Bank to initiate piloting the use of the country procurement systems in
Rwanda.

B5. AUDIT ARRANGEMENTS

Project financial statements audited by an independent auditor would be sent to the Bank within six
(6) months of the end of the respective fiscal year. The project audit will be carried out in
accordance with a Terms of Reference (TOR) to be submitted to the Bank for approval and should
include specific opinions on the project financial statements, including specific areas such as
Statements of Expenditures on the use of the Special Account, internal control systems,
procurement arrangements etc. The first audited project financial statements and audit report is
expected by 31st December 2010 and will cover the period from project start up until 30 June 2010.

12
E: PROJECT PREPARATION AND SUPERVISION

Main activities Date Participants

Identification December 2008 Resident Representative (1), Country Program Officer

(1), Consultant Economist (1).
Preparation Dec. 2008/Jan. 2009 Country Program Officer (1), Consultant Economist (1).
Appraisal December 2008- J. Mukete, Resident Representative, RWFO
January 2009 L. Barrow, Principal Country Program Officer, RWFO
C. Obidegwu, Consultant, RWFO
Report preparation Country Program Officer (1), Consultant Economist (1),
Procurement Specialist (1)
Peer review March, 2009 K. Mlambo, Lead Economist, EDRE
J. Anyanwu, Chief Research Economist, EDRE
J. Baffoe, Principal Planning Economist, ORPC
T. Houeninvo, Senior Macroeconomist, OSGE
Country team meeting April 6, 2009 Country Team
Readiness Review April 23, 2009 ORQR Department
OpsCom meeting June 10, 2009 Management
Negotiations July 3, 2009 Bank and Government
Translation CLSU
Board approval Executive Directors
Effectiveness date Bank Senior Management and Government
Mid-term Review Task Manager, Country Program Officer (RWFO),
Macroeconomist, Procurement Specialist (ORPF)
Closing date December 2012 Management

C1. Strengthening the Capacity of Strategy and Policy Unit

The Strategy and Policy Unit (SPU) in the Office of The President is responsible for: (i) advising
the President of the Republic on policy matters, (ii) providing support to other government
institutions, including the strategic planning units in Ministries, agencies and local government; (iii)
identifying and disseminating new perspectives on emerging development issues facing the
government and country; and (iv) engaging with research institutions and development partners to
find sustainable solutions to address Rwanda’s development challenges.

SPU consists of three sub-units or clusters– economic, social and legal/governance, with each
cluster led by an internationally recruited Senior Policy Advisor/coach. The position of the
Strategic Adviser to SPU will also be subject to competitive recruitment, with the proviso that it
must be someone who can operate effectively within the political system in Rwanda. The SPU is
piloting a capacity development program as part of an initiative to strengthen policy formulation
and coordination in the government, starting with the Presidency and Office of the Prime Minister.
The program involves young Rwandan talent working closely and learning from experienced
international experts to enable them eventually fill SPU professional positions or responsible
positions in other government entities. Consequently, capacity building and the coaching of the
young talent is a crucial part of the responsibilities of the policy advisors to SPU. The World Bank
is already providing support for these capacity building efforts in SPU, through the services of three
Senior Advisors. Based on the lessons learned from SPU, this approach to capacity building will be
used in other Ministries/agencies.

The Director of Cabinet provides leadership and strategic direction to Strategic Adviser, three
Policy Advisors and the other professional staff in the Unit. In particular, he/she oversees the
capacity development efforts of the advisors and the development of the junior staff. The Head of
SPU will also assist the Presidency in attracting top development thinkers and people with special

13
expertise to come to Rwanda for short engagements on knowledge building and innovation
exercises. The proposed project will support the services of the Strategic Adviser (terms of
reference and profile attached in Annex 1) and short term consultants for SPU, provide necessary
equipment, and support the implementation of the cluster development program.

C2. Capacity Building at Institute for Policy Analysis and Research (IPAR): IPAR was
established by Statute in 2008 as an independent, not-for profit non governmental research
institution, and charged with the responsibility of undertaking research and analysis in the public
policy sphere. Membership of IPAR is open to institutions and individuals who pay membership
dues. The governance structure consists of an Annual General Assembly of all members; Board of
Directors appointed by the General Assembly; a Technical Advisory Committee; and a Secretariat
headed by an Executive Director. Board composition is diverse and ensures broad stakeholder
representation, including government officials, civil society, the private sector, development
partners, academic institutions, the national assembly and financial institutions. IPAR is funded by
the government, private sector sponsors, individuals, donor agencies and through the sale of its
products and services such as contract research. IPAR statute require that the Institute’s financial
accounts and reports are audited by an independent auditing firm designated by the Board and
approved by the Annual General Assembly. The specific objectives of IPAR include:-
• Building and strengthening local strategic capacities in public policy research and
analysis;

• Conduct policy research in strategic socio-economic areas such as macro-economic

issues, trade and industry, investment, private sector development, competitiveness, and
productivity, public finance, human resources development, social welfare, environment
and natural resources, agriculture and rural development;

• Build an information resource base on socio-economic issues on Rwanda;

• Provide training in relevant research areas; and

• Organize discussion fora and inform the public on relevant policy issues.

IPAR became operational in May 2008 with financial support from the ACBF, the GoR and the
private sector. It has already contracted an Executive Director, a senior research fellow and four
research fellows. IPAR has been holding wide consultations with the different groups, including the
academic community, to formulate its research program. The project will support the services of an
experienced internationally recruited Senior Research Fellow (terms of reference attached in Annex
B.2) to spearhead the formulation and implementation of its research program and
mentorship/coaching for research fellows; support four other short term consultants, fund
workshops and publications of IPAR.

C3. Learning and Innovation Program (LIP): Developing a vibrant private sector that acts as the
principal growth engine for the economy is a critical element of Rwanda’s Vision 2020. The
competitiveness of all companies in Rwanda-- in agriculture, services and industry, depends not
just on each company’s own strategy, but also on the quality of the business environment, and
strategic coordination within each “cluster” of economic activity.3 Building on work initiated by the
3
A cluster is a geographically proximate group of interconnected companies and associated institutions in a
particular field linked by commonalities and complementarities. A cluster is different from simply an industry or a
sector. A cluster includes an end-product industry or industries, downstream or channel industries, specialized
suppliers, specialized service providers, related industries (including those with shared activities, labour,
technologies, channels, or common customers), and supporting institutions (such as trade associations, government

14
Rwanda Investment and Export Promotion Agency (now under the Rwanda Development Board),
the Private Sector Federation (PSF) is in the process of institutionalizing development of clusters in
Rwanda – and SPU seeks to actively support this work.
The cluster approach seeks to increase the productivity of companies in each cluster, increase
investment in existing and new companies in strategic parts of the cluster, and develop private
sector leadership in the dialogue with government about strategic improvements in the business
environment affecting each cluster. Several initiatives have been taken in recent years to develop
strategies for several clusters including in the Coffee, Tea, Tourism, industry and Mining sectors.
Other clusters which figure prominently in Vision 2020 include Agribusiness, ICT, Transportation
and Logistics, Finance and Banking. PSF intends to be a leading resource in the development of
these and other potential clusters.

The PSF has designed a three year Cluster Development Assistance Program that puts primary
responsibility for results on Rwanda’s cluster leaders. This program to be supported by the project
focuses on training and implementation. The PSF will host an annual training session with
Professor Michael Porter of Harvard University, in which selected clusters will present their
analysis, strategies and action plans for coaching and further development. The analysis would
include cluster mapping, cost and productivity analysis, cluster specific business environment,
attracting investment to the cluster and facilitating market linkages. A team of cluster advisors will
follow up on the training session and work with PSF staff to support the cluster leaders refine the
analysis and strategies, and implement the action plans. The project will finance the services of
these advisors. Performance metrics over the two year life of the program will include overall
cluster productivity, new innovations, new markets, new investments into existing or new
companies, as well as tangible and strategic improvements in the business environment for each
cluster.

agencies, and financial, training, standard setting, and research institutions). Well-functioning clusters increase
efficiency and productivity for all participating companies, stimulate and enable innovations, and facilitate
commercialization and new business development (Michael E. Porter, Institute for Strategy and Competitiveness,
Harvard University)

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C4. TERMS OF REFERENCE FOR CONSULTANTS

1. STRATEGIC ADVISER TO THE SPU

Objectives and Scope of Services:

The Strategic Adviser will work under the supervision of the Director of Cabinet in managing the work
performed by Strategy & Policy Unit (SPU) in the Economic, Legal and Governance, and Social
thematic areas. The consultancy has three objectives: as Strategic Adviser, to fulfil the responsibilities
as detailed below; (i) Provide advisory support to SPU, making it a fully fledged and operational unit
advising the Presidency; (ii) Provide strategic interface with Ministries, Departments and Agencies
(MDAs) in strategic policy development across government; and (iii) provide leadership and
mentorship to the SPU professional staff to build their capacity on the job with the aim of having all of
them qualified to take on leadership in analytical and strategic tasks in the SPU within twenty-four
months. In line with the strategic and executive role of the Office of the President, the main
responsibilities of the Strategic Adviser will be as follows:

• Mentoring and supporting the SPU in providing quality assurance for all policy advice
given to the President of the Republic of Rwanda by the SPU staff and other agencies, and
ensure that the SPU reviews and briefs the President on proposals for government strategies
and policies;
• Provide intellectual and strategic leadership to the SPU’s work to enhance its credibility
and ensure it responds promptly to the President with high quality and dependable advice;
• Advising on and helping define the Presidency’s key strategic priorities for Rwanda,
communicating this to relevant stakeholders and helping drive the process from policy
conception to delivery across government;

• Coordinate the preparation of work programs and action plans for the SPU; assist in the
discussions to reach agreement with Director of Cabinet of the Office of the President on
these plans, and ensure the implementation in a timely manner. Assist the Head of SPU in
preparing Monthly and Quarterly Progress Reports on the assignment to be submitted to the
Director of Cabinet and the Bank.

• Assist in convening the Presidential Advisory Council (PAC) and development of strategic
development policy issues for discussion in the PAC;
• Support the SPU to engage with government and non-government institutions to ensure that
(i) government policies, programs, budgets reflect Rwanda’s priorities; (ii) consistent
assessment of the impact of economic, social, legal and governance policies and challenges
facing in the country; and (iii) the identification and dissemination of strategic perspectives
on emerging economic, social, legal and governance issues facing the government and
country at large;
• Assist SPU to monitor the implementation of some of the key priorities of the Government
and regularly briefs the President on progress.
• Ensure that SPU provides support to strategic planning units at Ministries, Agencies and
Local Government in developing their line of strategic thinking, including helping them to
build their line strategic capabilities and assist them with occasional strategic audits;

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 • Support SPU efforts to works closely with research institutions in the country to support
evidence – based policymaking in Rwanda;
• Support the SPU to strengthen its working relationships with Rwanda’s development
partners, in line with the President’s priorities.

The assignment will extend over a period of 24 months. There will be a performance review after
twelve months and a final evaluation upon completion of the assignment.

Consultant’s Qualifications

• Post graduate degree in Economics, Political Science or a related field with over 10 years of
relevant work experience related to strategy and policy review and development, involving
the interpretation of economic, socio-political and governance trends and integration of
these trends into specific strategy and policy proposals.

• An analytic mind and strategic thinker, with strong policy analysis, review and synthesis
skills, able to write policy papers and reports.

• Proven leadership skills, ability to set priorities, work independently, and meet tight
deadlines. Skills to monitor and evaluate the work of policy advisors and analysts.

• Skills and the patience to delegate work and provide coaching to the staff analysts of SPU.

• Ability to operate at very high levels of Government, strong interpersonal and political and
diplomatic skills and cultural sensitivity; ability to work with people from different
professional and cultural backgrounds and institutions, particularly government agencies,
development partners, academia, the private sector and non-government organizations.

• Excellent oral and written communication skills and advanced computer skills

• Experience working in a developing country context, preferably in Africa and Rwanda.

• Fluency in English (and knowledge of French would be an advantage).

2. SENIOR RESEARCH FELLOW (IPAR)

Objectives and Scope of Services

The Senior Research Fellow at IPAR will lead the research program and will be answerable to
Executive Director (ED). Among other duties, he/she shall be responsible for:

• Work with the management and the staff of IPAR to formulate a research program approval
by the Board;

• Have overall responsibility for research program and capacity building, with oversight from
the ED;

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 • Assist the ED to recruit additional research staff with the objective of building a highly
motivated, multi-disciplinary team of researchers and other support staff in the medium-
term;

• Prepare and implement programs for the professional development of technical research
staff with a view to strengthening local capacity for research and policy analysis;

• Work with the ED and IPAR staff to organize workshops/seminars and conferences to
discuss public policy issues and developments as well as disseminate the organization’s
research findings ; and

• Assist IPAR to establish partnerships and networks with other relevant institutions
(academic and non-academic) within and outside Rwanda for exchange of experiences, and
to attract experienced researchers to visit and work at IPAR for short-term research
pursuits.

• Ensure that the organization’s research documents and publications are of high and
improving quality.

Consultants Qualifications

• A postgraduate degree, preferably a PhD degree in Economics, Political Science,

Sociology, Public Administration or related discipline;
• At least 10 years hands-on experience in public policy research, with at least 4 years in
senior research management position/s, supervising the work of other researchers, in
reputable public policy research institution;
• A record of research publications, particularly on public policy issues relating to
development developing countries such as public finance, trade and industrial policies,
knowledge development and management, technology and development, and the
management of external assistance;
• Good leadership, communication and team and capacity building skills, Ability and
willingness to supervise and coach and mentor less experienced colleagues, and provide
quality control on the work of others;
• Fluency in English or French. Having a working knowledge of the other language is an
advantage.
3. PROJECT MANAGEMENT SPECIALIST - PSCBS

Objectives and Scope of Services

The Project Management Specialist (PMS) will support the Public Sector Capacity Building Secretariat
(PSCBS) in implementing the Support for Policy and Strategy Development Project (SPSD). He/She
shall be based at the PSCBS and shall support the Director General in the coordination of project
activities. The PMS will serve as liaison with the Beneficiary/Implementing institutions; namely
Strategy & Policy Unit, Office of The President, and the Institute for Policy Analysis and Research.
The PMS shall identify their implementation and disbursement challenges and chart together a
common strategy for coordination and information sharing aimed at improving standards and ensuring

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smooth implementation of the project. The Project Management Specialist will perform the following
specific tasks:
• Support the beneficiary institutions to develop their project activity and work plans for capacity
building;
• Facilitate full ownership of roles and responsibilities within beneficiary institutions and if
necessary, revisit working procedures, processes and reporting lines based on existing
documentation and aimed at improving and speeding up the implementation process;
• Ensure the timely implementation of the planned activities as identified in individual
institutional work plans;
• Support the development of terms of reference for procurement of technical assistance and
consultancy services required by the beneficiary institutions;
• Assist in supervising, review and management of the contracted consultants ensuring that work
outputs satisfy the expected deliverables;
• Define assessment methodologies according to the Government and ADF guidelines for the
planned capacity building initiatives at beneficiary institution levels;
• Prepare briefing documents, develop and update information materials to ensure that all
stakeholders have a common understanding of the project;
• Monitor and evaluate the implementation of activities in beneficiary institutions every quarter
and provide Quarterly Progress Reports (QPRs) to the Director of PSCBS and ADF, indicating
successes achieved and challenges faced during implementation with recommendations to
resolve the challenges; and
• Facilitate working relations between PSCBS expert staff in technical units and the project
beneficiary institutions, fostering a sense of ownership by beneficiaries and installing a strong
client-orientation by PSCBS staff aimed at effective implementation of activities;

Profile of the Candidate:

• Post graduate degree in Economics, Finance, Engineering or a related field with hands on
project management experience of not less than 5 years;
• Relevant experience in (i) coordination of donor funded programs and projects; and (ii) project
management;
• Strong communication and interpersonal skills;
• Ability to work in teams and collaborate with client institutions;
• Fluent in either English or French and a working knowledge of the other language.

Deliverables:

• Timely preparation of QPRs and other management reports detailing the implementation
progress of the project to the Director General of PSCBS.
• Regular and detailed Performance review reports.

Supervision and Reporting Arrangements:

The Project Management Specialist reports directly to the Director General of PSCBS.

Duration of the assignment:

The assignment will be for a period of 24 months and is renewable.

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4. ACCOUNTANT
Objectives and Scope of Services
The Accountant will work in the Financial Management Unit of the PSCBS and shall maintain the
accounts and records of the project in accordance with ADF fiduciary requirements.
Tasks to be accomplished by the Accountant:
The Accountant will report to the Financial Management Specialist and through the latter, to the
Director General of PSCBS. He/She shall be responsible for:
• Preparation of annual budgets and annual accounts in liaison with the Beneficiary Institutions
(SPU and IPAR);
• Manage cash flows;
• Make payments on behalf of the SPSD Project;
• Banking and Bank reconciliation;
• Ensure consolidation of budget and cash flow forecasts;
• Ensure that adequate financial controls are in place to maintain propriety and proper
accountability of expenditures;
• Maintain suitable management information system to allow for recording and reporting of
project expenditures;
• Ensure that financial transactions are recorded, have adequate supporting documentation and
can be easily extracted for the purpose of preparing financial statements;
• Maintaining registers for all the project assets;
• Any other duty that may be assigned from time to time by the FMS and the Director General.
Expected Outputs (Deliverables):
The Accountant shall deliver the following outputs;

- Regularly kept and updated accounts of the project

- Monthly and Quarterly cash flow statements
- Monthly Bank reconciliation statements
- Annual accounts statements ready for audit.

Qualification and Experience:

The minimum qualifications and experience required for the Accountant is as follows:
- A Bachelors degree in Commerce (Accounting option) or equivalent with full professional
accounting qualifications such as CPA, ACCA or equivalent (with evidence of likelihood of
full qualification soon);
- At least 5 years relevant continuous work experience in a busy Finance Department;
- Demonstrated experience in preparation of financial reports and budget variance analysis;
- Hands on experience with a multi-user accounting package including data capturing and
extraction of ledger balances there from;
- High integrity, strong result orientation, drive for excellence and takes initiative;
- Good communication skills; and
- Fluency in English or French, with working knowledge of the other language

Supervision and Reporting Arrangements

The Accountant reports directly to the FMS and the Director General of PSCBS.

Duration of Assignment
The assignment will be for a period of 24 months.

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