The Rwandan economy has fallen into its first recession due to the COVID-19 (coronavirus) pandemic and could potentially compromise years of gains in poverty reduction.
Released today, the 16th edition of the World Bank Rwanda Economic Update, Protect and Promote Human Capital in a post-COVID-19 World, says the country’s gross domestic product (GDP) is estimated to have dropped by 0.2 percent in 2020, compared to a projected expansion of 8 percent before the COVID-19 outbreak.
This dire economic effect has severely adverse implications for households, as thousands are facing unemployment, revenue losses and increased consumption prices are pushed into poverty. The Economic Update estimates that, because of the lockdown, social distancing, and increased costs associated with the pandemic, the poverty headcount is likely to rise by 5.1 percentage points (more than 550,000 people) in 2021, with more than 80 percent of the new poor in rural areas.
“The severity of the effect is due at least in part to the fact that the crisis hit where it hurt the most, travel and hospitality services, which are the sectors for which the country has invested massively in recent years through its the MICE (Meetings, International Conferences, and Events) strategy. The crisis calls for the rebalancing of the growth strategy, with more emphasis on rural related activities and greater emphasis on regional integration to reduce vulnerability to international shocks,” said Calvin Djiofack, the World Bank Senior Economist.
The report notes that the Government of Rwanda initiated a swift and robust response to the pandemic, with the adoption of the Economic Recovery Plan (ERP) estimated at US$900 million over the two fiscal years 2019/20 and 2020/21.The recovery plan aims to scale up social safety net programs for the most vulnerable, build key infrastructures, and support strategic enterprises, including small- and medium-size enterprises.
Social safety nets programs have already reduced poverty by 1.2 percentage point in 2020, the report says, and could reduce poverty by 1.7 percentage points in 2021 if the government undertakes the expansion planned in the ERP.
The report points out that, in the absence of decisive actions, the adverse effects on education and health, have the potential to reduce long-term productivity and slow down the country’s long-term growth potential. The long closure of schools and lower household income are likely to reduce school enrollment, as many students seek employment. An estimated 3.5 million students have been out of school, and statistics indicate that the share of students in total employment increased from 3.4 percent in February 2020 to 8.8 percent in August 2020.
The report acknowledges that the government’s swift and efficient response to the pandemic has largely mitigated the potentially significant negative impact on essential health and nutrition services. Rwanda has experienced some disruptions in the delivery of health services, but, the report notes, these appear to be largely transitory. However, continued efforts to ensure coverage of nutrition and health services to vulnerable households are essential to avoid a deterioration in the productivity of future workers.
The 16th edition of the Rwanda Economic Update also recognizes that the impact of the pandemic disproportionately affects women, in part because (according to the recent labor market survey) women are more likely to be seasonal workers (44 percent versus 31 percent of men) and are more likely to be taking care of a sick relative (4 percent versus 1 percent).
“The unprecedented impact of the crisis heightens the urgency of ensuring the availability of strong and adaptable programs and policies to mitigate poverty, and to safeguard the health, schooling, and employment of the population,” said Rolande Pryce, the World Bank Country Manager for Rwanda. “By further expanding the coverage of well targeted safety net interventions and prioritizing investments in human capital, Rwanda can quickly and effectively mitigate the effects of the shock and lay the groundwork for future resilience.”
Some of the actions proposed by the Rwanda Economic Update to protect and improve human capital in Rwanda include accelerating deployment of COVID-19 vaccines to contain the pandemic, combating the poverty impact of the pandemic by expanding coverage of social safety nets, improving targeting accuracy to make social safety nets more cost-effective, and expanding social insurance to the informal sector, and reducing learning losses through optimization of remote education due to the COVID19 disruptions, improving skills and strengthening accountability in education.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.
Ethiopia’s Ministry of Industry, UNIDO sign €2m agreement
Ethiopia’s Ministry of Industry and the United Nations Industrial Development Organization (UNIDO) have signed a €2m agreement to support Integrated Agro-Industrial Parks (IAIPs), funded by the Italian Agency for Development and Cooperation. Thes agreement will contribute to the development of the agro-industrial sector and the creation of decent jobs and economic opportunities in the rural areas of Ethiopia. The objective of the new project is to support the inclusive and sustainable development of four pilot IAIPs. Project activities will concentrate on increasing private sector involvement in agro-industry, improving food quality, safety and traceability, and promoting social inclusion and environmental sustainability.
With the support of UNIDO, the Government of Ethiopia has prioritized the establishment of the IAIPs as a primary tool to achieve agricultural modernization and rural industrialization in the country. To this end, the Government of Ethiopia has mobilized various funding sources and development partners for the implementation of IAIPs. The current project is for the development of the four pilot IAIPs, located in Oromia (Bulbula), Sidama (Yirgalem), Amhara (Bure) and Tigray (Beaker). The project is funded by the Italian Agency for Development and Cooperation, in alignment with the Italian strategy outlined in the Ethio-Italian country framework 2017 – 2019 which encourages sustainable and inclusive economic growth to ensure full employment and decent work for all, especially in rural areas, as well as promoting partnerships between Italian and Ethiopian institutions to ensure continuity of investment and transfer of technologies.
The signature ceremony was attended by Shisema Gebreselassie, State Minister of the Ministry of Industry, Aurelia Patrizia Calabrò, UNIDO Representative and Director of the Regional Office Hub, and Isabella Lucaferri, Head of the AICS Addis Ababa Office.
Sudan: Looting in Darfur, leaves 730,000 without enough to eat
The UN chief condemned on Wednesday the looting and attacks against United Nations facilities, equipment and supplies gifted to the Sudanese authorities for civilian in El Fasher, Darfur.
Last Tuesday evening, a World Food Programme (WFP) warehouse located in the Borsa area of El Fasher town, the capital of North Darfur State, came under attack from unknown armed groups.
Over 1,900 metric tons of food commodities that were meant to feed 730,000 vulnerable people for a month were stolen.
The incident followed the looting and reported violence last week at the former UN-African Union Hybrid Operation (UNAMID) base in El Fasher.
The UN chief also asked the Sudanese authorities to facilitate the safe working environment and passage for remaining UN operations in the region.
He concluded by thanking the UN civilian and uniformed personnel who remain on the ground under “challenging” circumstances.
WFP cuts off aid
WFP chief David Beasley tweeted his outrage over the “senseless attacks” in El Fasher and strongly condemned the continued looting and destruction of the agency’s assets.
“As a result, we have been forced to suspend WFP operations in North Darfur, effective immediately”, said Mr. Beasly.
The theft has robbed nearly two million Sudanese of the food and nutritional support they so desperately need.
“Not only is this a tremendous setback to WFP operations, but it endangers our staff and jeopardizes our ability to meet the needs of the most vulnerable families”, he added.
The Humanitarian Coordinator in Sudan, Khardiata Lo N’diaye, also condemned the looting.
“This was food assistance meant for Sudan’s most vulnerable people. Humanitarian assistance should never be a target”, she underscored.
Currently, one in three people in Sudan needs humanitarian assistance – equivalent to an estimated 14.3 million individuals.
According to the 2022 Humanitarian Response Plan, 25 per cent of those people require food security and livelihoods support.
An attack like this, the coordinator explained, severely impedes the ability to deliver to the people who need it the most.
“We urgently ask all parties to adhere to humanitarian principles and allow the safe delivery of life-saving assistance”, Ms. N’diaye stated.
WFP currently faces “unprecedented” funding shortfalls, estimated at $358 million.
Earlier in the month, thousands of people took to the streets to mark the third anniversary of the uprising that led to the April 2019 overthrow of President Omar al-Bashir, who had ruled for three decades.
Demonstrators who made for the presidential palace were also protesting October’s military coup and the political agreement signed later on 21 November.
UN officials and agencies expressed deep concern at the time over credible reports of serious human rights violations, including the use of rape and gang rape of women and girls, employed to disperse protesters.
As of 29 December, the security situation had been restored, according to State authorities.
Ms. N’diaye thanked the local authorities for preventing the situation from worsening but called upon the Government to step up efforts to protect and safeguard humanitarian premises and assets.
Thousands head home voluntarily from Zambia to DR Congo
Nearly 5,000 refugees who fled violence in the Democratic Republic of the Congo (DRC) four years ago, are opting to head home voluntarily from Zambia over the coming months, with the first 100 people setting out on Tuesday.
The UN refugee agency, UNHCR, said that security had improved sufficiently in DR Congo’s Pweto territory, Haut-Katanga province, for them to go home “in safety and dignity”.
Inter-ethnic clashes as well as fighting between Congolese security forces and militia groups in parts of southeastern DRC in 2017, have uprooted communities.
Through intention surveys carried out in October by UNHCR, some 4,774 refugees expressed their aim to voluntarily return to DRC.
The voluntary repatriation, which will continue into 2022, is part of the ongoing 2006 tripartite agreement between UNHCR and the Governments of Zambia and DR Congo.
Partners are supporting the returning refugees by providing voluntary repatriation documents, expedited immigration clearance, health screening and school certificates to allow children to resume their education in the DRC.
“As security has improved in some areas of Haut-Katanga, an estimated 20,000 refugees have spontaneously left Zambia since 2018 to return to their areas of origin – mainly to Pweto territory”, UNHCR spokesperson Babar Baloch told journalists in Geneva.
Meanwhile, the UN refugee agency is working with authorities and development partners – such as Catholic aid confederation CARITAS – in DRC to advance reintegration projects, including education, health and agriculture, and to ensure conditions for safe and dignified returns.
Currently, some 18,000 Congolese refugees farm at Mantapala settlement – established in early 2018 to accommodate displaced people – alongside 5,000 Zambians, across 11 integrated villages.
As Zambia continues to host 103,000 refugees, asylum seekers, and former refugees, including more than 63,000 from DR Congo, over the past three years around 20,000 Congolese have left to return home.
The two agencies have provided buses and trucks to help transport refugees, their belongings and food for the journey, Families will receive a cash grant to help them pick up their lives again in the DRC.
“UNHCR will disinfect the buses, provide face masks, hand sanitizers and, together with the authorities, ensure that COVID-19 prevention measures are observed, including loading of buses to half the capacity”, Mr. Baloch said.
UNICEF has improved water and sanitation facilities at the reception centre in Chiengi district, where returning refugees are being housed for the night to process immigration documents, before embarking on the final leg of their journey home.
And Zambian authorities are providing rapid COVID-19 tests for the returning refugees, at the Mantapala Rural Health Centre.
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