Summary of Rwanda Case StudyBrokeri

Summary of Rwanda Case Study



















Brokering Development: Enabling Factors for Public-Private-Producer Partnerships in Agricultural Value Chains
Summary of Rwanda case study
This is a summary of the Rwanda Country Report, which was written by Jean-Marie Byakweli and Felix Nzeyimana, based on research carried out in 2014 in association with the Institute of Development Studies (IDS) and the International Institute for Environment and Development (IIED) as part of an IFAD-funded programme on the role of PPPs in agriculture.
It is one of the four IFAD project-supported Public-Private-Producer Partnerships analysed for the research report ‘Brokering Development: Enabling Factors for Public-Private-Producer Partnerships in Agricultural Value Chains’. The report syntheses the four case studies and discuss the findings on how PPPPs in agricultural value chains can be designed and implemented to achieve more sustained increases in income for smallholder farmers and broader rural development.







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Design: Lance Bellers and Gary Edwards.






Contents
Executive summary 2
Introduction and overview 3 Objectives of the case study 3 Methodology 3 Country context 3 Overview of the PPP 4
Analysis 7 Key elements of the PPP 7 Development outcomes 10 Linking the PPP and development outcomes 13 Challenges 13
Capturing learning from the PPP 14
References 16
Endnotes 17

























Executive summary
Developing country governments and donors are increasingly looking to public–private partnerships (PPPs) to deliver growth and positive development outcomes in agriculture. Capturing learning from the experiences of two PPPs in Rwanda involving tea estates in two areas of the Southern province (Nshili and Mushubi) provides important lessons for other programmes with PPP arrangements.
Eager to put the 1994 genocide and its many destabilising legacies behind it, the Rwandan government looked to the private sector for muchneeded finance to drive economic growth. The government, with strong input from IFAD, aimed to reach the most vulnerable people (particularly female-headed households living in poverty) in some of the poorest areas of the country, with a strategy to develop certain crops (in this case, tea). The two PPPs were designed and implemented as part of the government’s privatisation policy, from 2003. It aimed to secure substantial public and private sector investment to drive an increase in smallholder incomes and generate new employment opportunities. Increased household incomes would contribute to poverty reduction and improve food security in tea-growing regions.
The model used for the PPPs at Nshili and Mushubi was broadly similar:
• The private investor (in both cases a consortium) leased land from the government to manage a tea plantation and build and operate a tea factory.
• The government provided infrastructure improvements (roads and electricity) to support the factory.
• The private investor bought 85 per cent of shares in the factory, with the government granting the remaining 15 per cent to the cooperative (purchased by IFAD).
The two tea PPPs enabled smallholder tea growers to increase household incomes, which have helped people to acquire livelihood assets, improve the family diet, and pay for health insurance, among other important changes. They also generated new employment opportunities and brought improvements in road and energy infrastructure, providing a much-needed boost to the local economy.
But they have also faced some important constraints, not least around productivity and financing. As they move forward, the key challenges lie in:
• risk sharing between the private investor and smallholder farmers, where farmers are bearing high risks around production, financing, and other key aspects of the PPP
• building viable, community-owned businesses
• consultation, voice and empowerment
• reaching the poorest smallholders
Overall, the experience of the two PPPs studied here suggests that development of the tea sector should be viewed as a long-term venture that needs careful planning, a sound financing model, and strong risk-mitigation strategies. Such partnerships require appropriate legal instruments to ensure that they function effectively, with clearly defined responsibilities and lines of accountability. The deliverables expected from each party should be clearly outlined, and arrangements should include conflict-resolution processes





Introduction and overview
Objectives of the case study
This report forms part of a series of case studies that seek to identify key success factors for public– private partnerships (PPPs) in rural development, based on learning from IFAD’s experiences with PPPs in four countries (Ghana, Indonesia, Rwanda and Uganda). The aim of this series is to support policy and decision-makers in government, business, donor agencies and farmers’ organisations to build more effective PPPs that bring about positive development outcomes sustainably and at scale. The study identifies key elements of PPP design and implementation that lead to positive (or negative) development outcomes for smallholders and rural communities, by exploring four questions:
• What constraints was the PPP set up to overcome, and what was its theory of change?
• What were the key features of how the PPP was brokered, designed and implemented?
• What have been the development outcomes for smallholders and rural communities to date?
• How have these outcomes been influenced by the PPP brokering, design and implementation?
Methodology
The research team conducted a desk review in Kigali examining key policy documents, reports and other data from government departments, IFAD, and other organisations. Fieldwork was carried out between June and August 2014 in Nshili (Nyaruguru district) and Mushubi (Nyamagabe district), both in Rwanda’s Southern province. It involved meetings with district government officers, cooperative leaders and members, smallholder tea growers, tea factory and tea plantation managers, and pluckers.
Data were collected through a mixture of key informant interviews, stakeholder meetings (one before and one after fieldwork, to share preliminary findings), field visits and focus group discussions (with beneficiary and non-beneficiary smallholders). The limitations of the study include the risk of bias from using small sample sizes. Also, the interviews were held at only one point in time, and may not therefore have reflected seasonal factors. Data collection was also a challenge, mainly because there was a lack of clearly written assumptions underlying the theory of change and, there were no specific PPP indicators in the baseline study for IFAD’s Smallholder Cash and Export Crops Development Project (PDCRE) (2003–2011) (described below).
Indeed, PPP arrangements – although considered an important innovation in the tea sector – were introduced by the government in the course of the tea privatisation process, not as a policy instrument to guide the process but rather as a tool for implementing privatisation. It was not until 2014 that the Rwandan government drafted its first PPP Policy and Regulations guidelines.
Country context
Rwanda’s population is predominantly rural (90 per cent) and young (45 per cent under 14 years old). Its economy, which had experienced rapid growth in the 1960s and 1970s on the back of strong global markets for tea and coffee exports, had stagnated by the mid-1980s. A poverty rate of 70 per cent and a big increase in the proportion of female-headed households were among the many legacies of the 1994 genocide.1 As at 2011, the national poverty rate stood at 44.9 per cent.2
Political and economic context With the restoration of peace in 1994 and the return of the refugees in 1995/96, the new government initiated policy reforms to stimulate economic recovery and decentralise services and budgets to district level, emphasising community participation in the planning and implementation of development programmes. The government’s Poverty Reduction Strategy Paper (2001) aimed to address major challenges constraining economic growth. It aimed to raise export earnings, increase agricultural production, support non-farming activities in rural areas, and diversify the economy. As part of its Vision 2020, the Rwandan government saw PPP arrangements as a vehicle for securing the country’s transition from a post-confl