The sub-sector context

PIP 2001-2003, other donors investment in agriculture, PIP status of the IFAD cash crop project

The principal donors who are supporting development in Rwanda during the 3-year period 2001-2003 have pledged a total of about USD 421 million of development assistance. The main donors are, in order of importance: the European Union (118 M USD); the World Bank (108 M USD); the African Development Bank (53 M USD), IFAD (46 M USD), and the UNDP (18 M USD), followed by Germany, Belgium, the United States, and China (between 14 and 11 M USD each). From a total of USD 421 million, the rural sector would receive a little more than USD 100 million. This availability of funds does not mean yet effective commitment, as this will depend on specific project agreements. It is difficult to ascertain the share which would support poverty alleviation, because all foreign and national partners claim that most of their contribution is made with that objective in mind, whereas an adequate design and an effective implementation of projects with that objective is difficult, and in practice does not always clearly emerge from the text of available documents.

Prospects for collaboration between the IFAD smallholder cash and export crop and other ongoing donors’ projects are good. Among the projects that are undertaking similar or complementary activities, the USAID coffee development project based in Butare is of particular interest. The ongoing National Agricultural Services Project of the World Bank has an allocation of USD 49 million for crop support activities, which will be spent on activities that will be decided by MINAGRI during implementation. Disbursement under this loan is very slow, and the GoR has not yet clearly indicated to which extent they are prepared to draw resource for the coffee or tea sector from this loan. The EU has signed a general agreement with the GoR that includes up to USD 9 million for the coffee sector. This amount includes the development of a unit for in vitro reproduction of agricultural planting material (tissue culture laboratory), which can supply the nurseries of the IFAD project cash crop planting programme. In addition, the EU programme includes the rehabilitation of the road from Nshili to Mata, a project that is essential for the evacuation of the tea produced in South Gikongoro province. There is no specific allocation of donors’ funds to support the tea sector, except for a sum of about USD 100,000 for a study of tea development, included in the approved EU programme. All donors are waiting to see concrete progress in the implementation of the privatization policy before they consider extending financial support to projects in the tea sub-sector.