Country strategy framework and lessons

Lessons learned: previous and ongoing IFAD projects

IFAD’s assistance in Rwanda currently totals about SDR 59 million in highly concessional loans for seven projects including:

• Maize Development Project (loan 150 RW); status: closed;
• Gikongoro Agricultural Development Project (loan 232-RW); status: closed;
• Byumba Rural Development Project (loan 264-RW); status: closed;
• Buberuka Land Intensification Project (loan 314-RW); status: ongoing
• Rural Small and Micro-Enterprise Promotion Project, PPPMER (loan 411-RW); status: ongoing
• Umutara Community Resource and Infrastructure Development Project, UCRIDP (loan 537 RW); status: ongoing and
• Umutara Community Resource and Infrastructure Development Twin Project, UCRIDTP (loan 573 RW); status: effective since October 2002.

In addition, grant assistance under the joint IFAD/BSF/JP and IFAD TAG programme totals about USD 6.8 million, namely:

• Socio-Health Programme (Grant BSF-BG-019/022); and
• Rwanda Returnees Rehabilitation Programme (Grant 377RW).

The first three projects were started in the early 1990s and their implementation was severely disrupted during the 1994 war, when IFAD operations were suspended. In 1996 IFAD portfolio was reactivated after being completely reformulated. Both the Gikongoro Project and the Rwanda Returnees Rehabilitation Programme (which was an emergency rehabilitation operation) closed in June 2001. Project Completion Reports for the above projects have been prepared and finalized. By December 2001, Byumba project and the Socio-Health Programme will be closed, whereas the Buberuka and PPPMER projects will be extended to 30 June 2004 and the end of 2003 respectively. The UCRIDP became effective in December 2000, and its twin project became effective since October 2002.

The main lessons learned since the reactivation of IFAD operations in 1996 are summarized as follows:

• project “beneficiaries” do not participate in activities planned by project designers and project managers in a top-down manner: participation requires effective beneficiaries empowerment to plan development activities based on their own felt needs and priorities;
• the government decentralization process is progressing rapidly, providing new opportunities to the lower layers of the local government and to Civil Society Organizations (CSOs) at community level, and for associating NGOs and private enterprise to the development process through outsourcing contracts;
• rapid increase in population in already heavily populated areas and related accelerating urbanization calls for particular attention to measures that would facilitate the development of agriculture-related off-farm income generating activities;
• this in turns raises the issue of credit and adequate linkages to market opportunities;
• flexibility in demand driven project design (emphasis on processes rather than on blueprints) is a necessary condition of “designing for success”;
• this requires the application of lending mechanisms with more unallocated amounts in project budgets to enable rapid responses to changes in project circumstances, closer supervision and support to project implementation, and new ways of handling the project reporting systems, including ways to link the reports on the performance in the provision of goods and services with its impact at beneficiary level, and with ongoing beneficiary assessments of the pertinence and quality of the services they receive in response to their effective demand;
• there is a real gap between opportunities to invest in small rural enterprises that can exploit new market opportunities in crop livestock and non-farm products, and the financial resources available to these enterprises.
• the gap originates in the structure of rural financial markets. Filling the gap requires a well-conceived effort to promote the development of viable microfinance institutions of different types, with emphasis on local savings mobilizations and product diversification based on effective demand, and of their potential linkages with the formal banking sector;
• projects must pay more attention to issues of asymmetric information in markets and technology, to the infrastructure required to reduce farm to market transport cost with a view to increasing competition among traders in purchasing farmers’ surplus products, and to measures that may increase farmers bargaining power vis-à-vis traders;
• this requires, inter alia, new ways to support market intelligence in favour of small producers of crops and non-farm products (SMEs), and to farmers’ marketing organizations, linkages to micro-finance institutions that may extend short term credit against products in stock at village level, possibly discounting their assets with the formal banking system, as well as other appropriate measures;
• appropriate technology development (production, processing and marketing technologies) is still lagging behind the requirements of both crop and livestock farmers, and of rural entrepreneurs interested in developing off-farm generating activities;
• this requires the introduction of a new approach to technology generation and transfer, based on participatory diagnosis of problems, identification of farmer innovators, close working relationships of provincial and district MINAGRI technicians and research officers, and more demand driven research;
• projects are slow to start, and are not always started in the most effective way: a strong back-up from IFAD is required during the first 1 to 2 years of operations; innovative projects involving institutional development and/or changes in conventional project management practices must be followed-up very closely in the early stages to assist project coordinators and service providers to start-up with the correct approach. This assistance must go well beyond the current practice and scope of Project Start-up Workshops, and of formal supervision by Cooperating Institutions; and
• recruitment of national NGOs as service providers is handicapped by complicated procurement procedures, failure to pre-qualify a short number of competent organizations and to issue-related limited invitations to bid for contracts, unwillingness to recognize that NGOs must be allowed to make a reasonable profit, and sometimes difficulties in drafting the tender documents with respect to the description of the special jobs that bidders are asked to perform.