World Bank regional boss optimistic about Rwanda’s path to economic recovery | New times
After a recession of 3.4% in 2020, the economy is expected to grow by more than 10% in 2021, characterized by the recovery of disrupted sectors. It will also mean making up for lost progress in aspects such as education, social protection and entrepreneurship, among others.
New times Collins mwai spoke to Keith Hansen, World Bank Country Director for Kenya, Rwanda, Somalia and Uganda on the Bank of Rwanda’s assessment of the recovery journey, key opportunities and milestones to date.
The education sector has been cited as one of the most affected by the pandemic, especially with regard to learning outcomes and time lost out of school. What are the best chances of catching up?
Education has been one of the biggest and most damaging shocks of the pandemic. It will take some time to assess the extent of the damage, what needs to be done and address the shortfall. There are a few things to take into account. We have to make up for lost time. This is a country-level approach to determining what has been lost, what resources are available, and what may work best. This is something that we are working with the government to establish and find a way out of.
The answer also lies in completing the ultimate immunization work, because without it nothing else can flow. This is the only way to get the kids back to school and get things going again. Rwanda has been very successful in the rapid deployment.
The learning challenges that existed in many countries even before Covid-19 have been highlighted and need to be addressed urgently.
The Rwandan government has built over 22,000 classrooms during the pandemic, which will be a big step forward in the quality and outcomes of learning in Rwanda. The country has turned the crisis into an opportunity. I know the government is very keen to finish the job and move on.
In 2020, there were concerns that there would be a need to strengthen social safety nets to prevent people from sliding into poverty. Where is the country now?
One of the things Covid-19 revealed was the weaknesses of social protection programs such as social safety nets, especially those that respond to crises. It was a great opportunity. He demonstrated the cost of not having this in place. There is a wealth of experience around the world with sustainable and appropriate social protection systems. The countries that had it in place were able to respond on time and as they exit the covid, they are in a better position. This is something that we are working on with Rwanda.
The SMEs that would be the biggest employer of all economies and the engine of growth have suffered considerably and some have had to close their doors, what is the World Bank’s advice to ensure the survival of SMEs?
All of these lessons are general and not just for Rwanda. SMEs are crucial, especially in countries where large companies can establish themselves. It is an important source of employment as countries shift from dependence on agriculture to manufacturing and services. These businesses need easy access to financial services and support. It is also a source of innovation and entrepreneurship.
Rwanda’s economy set to grow by more than 10% in 2021, marking a way out of recession, what are the best chances of sustaining recovery and growth amid global turmoil?
The only answer that applies to everyone is vaccination. This is the way to reconnect with growth. It is ideal that Rwanda has a history of growth over the past few years. Certainly, part of the growth is rebounding, but its scale is encouraging. We are optimistic that Rwanda will be able to resume the path of growth. The government has presented a national strategy, the economy will need to undergo continuous transformation to move on to the next phase as it moves to a middle income state. This means that there is a growing need to guarantee access to infrastructure, boost human capital and productivity, among others. To be fair to Rwanda and other emerging countries, a lot of what happens to them depends on what happens to the global economy.
Considering the World Bank’s investments in multiple sectors, what are your general expectations from the various stakeholders?
Rwanda has a delivery and performance record. It is not for the World Bank to set expectations for the country, we serve the country and work with them to find the best way and support them.
I would expect that, based on past performance, most of the goals would be met, including the provision of services to a large majority of the population and the progression of the value chain in sectors such as agriculture. . Rwanda has also made a huge commitment in human capital backed by resources and we have a number of financial support systems and look forward to seeing the targets. We are also sure to see the gains from the immunization efforts because Rwanda has been very effective.
For the private sector, we would like to see them play a bigger role in government strategy as it is the ultimate engine of sustainable growth and poised to become a middle income country.
We hope that the measures taken by the government to modernize infrastructure and open up the environment will help induce greater response from the private sector. It will take time and not right away.
Rwanda is one of the countries that have embarked on efforts to tackle climate change and some of the resilience lessons from Covid-19 will also be useful in dealing with climate change. One of the things that sets those who are able to thrive apart from others is resilience to shocks.