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Report No.: 126893 PROJECT PERFORMANCE ASSESSMENT REPORT RWANDA QUALITY OF DECENTRALIZED SERVICE DELIVERY SUPPORT DEVELOPMENT POLICY OPERATION (IDA H8530) September 4, 2018 Human Development and Economic Management Independent Evaluation Group Currency Equivalents (annual averages) Currency Unit = Rwanda Franc (RF) 2013 $1.00 RF 634 2014 $1.00 RF 680 2015 $1.00 RF 690 2016 $1.00 RF 747 2017 $1.00 RF 840 Abbreviations DPO development policy operation EDPRS Economic Development and Poverty Reduction Strategy IDA International Development Association IEG Independent Evaluation Group IFMIS Integrated Financial Management Information System IMF International Monetary Fund MINECOFIN Ministry of Finance and Economic Planning M&E monitoring and evaluation ODA official development assistance PEFA Public Expenditure and Financial Accountability PDO program development objectives PFM public financial management PPAR Project Performance Assessment Report QDS DPO Quality of Decentralized Service Delivery Support Development Policy Operation SEAS Subsidiary Entity Accounting System SWG Sector Working Group All dollar amounts are U.S. dollars unless otherwise indicated. Fiscal Year Government: July 1 – June 30 (since July 2009) Director-General, Independent Evaluation Ms. Caroline Heider Director, Human Development and Economic Management Mr. Auguste Kouame Acting Manager, Country Programs and Economic Management Mr. Ismail Arslan Task Manager Ms. Yumeka Hirano ii Contents Preface ................................................................................................................................................................vii Summary .......................................................................................................................................................... viii 1. Background and Context ..........................................................................................................................1 2. Relevance of the Objectives and Design............................................................................................5 Objectives .......................................................................................................................................................5 Relevance of the Objectives .....................................................................................................................5 Design ..............................................................................................................................................................6 Policy Content and Results Framework .............................................................................................................. 6 Implementation Arrangements ............................................................................................................................. 7 Monitoring and Evaluation Design ...................................................................................................................... 7 Relevance of the Design .......................................................................................................................................... 7 3. Implementation ........................................................................................................................................ 11 Planned versus Actual Expenditure .......................................................................................................11 Implementation Experience .....................................................................................................................11 Safeguards Compliance .......................................................................................................................................... 11 Financial Management and Procurement ........................................................................................................ 11 Monitoring and Evaluation ......................................................................................................................11 4. Achievement of the Objectives ........................................................................................................... 12 Objective 1 .................................................................................................................................................... 12 Objective 2 ................................................................................................................................................... 15 The Operation’s Role in Financing and Sustaining Policy Dialogue ......................................... 21 5. Ratings ......................................................................................................................................................... 22 Outcome ...................................................................................................................................................... 22 Risk to Development Outcome ............................................................................................................ 23 Bank Performance .................................................................................................................................... 23 Quality at Entry ........................................................................................................................................................ 23 Quality of Supervision ........................................................................................................................................... 24 Borrower Performance ............................................................................................................................ 25 Government Performance.................................................................................................................................... 25 Implementing Agency Performance................................................................................................................. 25 iii 6. Lessons......................................................................................................................................................... 25 Bibliography..................................................................................................................................................... 27 Figures Figure 4.1. Overall Satisfaction with Services Rendered by Local Government........................... 15 Figure 4.2. Satisfaction of Citizens with Their Participation in Government Programs by Program or Activity, 2016 ........................................................................................................ 20 Tables Table 1.1. Rwanda Key Economic Indicators..............................................................................................2 Table 2.1. Prior Actions, Outcome Indicators, and Program Development Objectives ............ 10 Table 4.1. Staff Positions Filled in Revised Organizational Structures, by District ...................... 14 Table 4.2. Collection of Fees and Charges, by District ........................................................................ 15 Table 4.3. Sectors Using the Subsidiary Entity Accounting System ................................................ 16 Table 4.4. Rwanda Public Expenditure and Financial Accountability Scores for Selected Indicators ....................................................................................................................................... 18 Table 4.5. Citizens’ Participation in District Administration (percent) ............................................ 19 Table 4.6. Overall Satisfaction of Citizens with Their Participation in Government Programs (percent) ....................................................................................................................................... 20 Table 4.7. Status of Implementation of Previous Audit Recommendations by Local Governments, Districts and City of Kigali ........................................................................... 21 Table 4.8. Intergovernmental Transfers................................................................................................... 22 Appendixes Appendix A. Basic Data Sheet ................................................................................................................... 35 Appendix B. Statistics and Key Indicators ............................................................................................ 38 Appendix C. Policy Matrix........................................................................................................................... 49 Appendix D. List of Persons Met.............................................................................................................. 51 This report was prepared by Yumeka Hirano with support from Ali Khadr, and Florence Charlier. The program was assessed in February 2018. The report was peer reviewed by Zeljko Bogetic and panel reviewed by Robert Lacey. Carla F. Coles provided administrative support. iv Principal Ratings Indicator ICR ICR Review PPAR Outcome Satisfactory Moderately satisfactory Satisfactory Risk to development Moderate Moderate Moderate outcome Bank performance Highly satisfactory Moderately satisfactory Satisfactory Borrower performance Highly satisfactory Satisfactory Satisfactory Note: The Implementation Completion and Results Report (ICR) is a self-evaluation by the responsible Global Practice. The ICR Review is an intermediate Independent Evaluation Group product that seeks to independently validate the findings of the ICR. PPAR = Project Performance Assessment Report. Key Staff Responsible Project Task Team Leader Sector Manager Country Director Appraisal Yoichiro Ishihara/ Pablo Fajnzylber Johannes Zutt Tessa MacArthur/ Alex Kamurase Completion Yoichiro Ishihara Guenter Heidenhof Diarietou Gaye v IEG Mission: Improving World Bank Group development results through excellence in independent evaluation. About This Report The Independent Evaluation Group (IEG) assesses the programs and activities of the World Bank for two purposes: first, to ensure the integrity of the World Bank’s self-evaluation process and to verify that the World Bank’s work is producing the expected results, and second, to help develop improved directions, policies, and procedures through the dissemination of lessons drawn from experience. As part of this work, IEG annually assesses 20–25 percent of the World Bank’s lending operations through fieldwork. In selecting operations for assessment, preference is given to those that are innovative, large, or complex; those that are relevant to upcoming studies or country evaluations; those for which Executive Directors or World Bank management have requested assessments; and those that are likely to generate important lessons. To prepare a Project Performance Assessment Report (PPAR), IEG staff examine project files and other documents, visit the borrowing country to discuss the operation with the government, and other in-country stakeholders, interview World Bank staff and other donor agency staff both at headquarters and in local offices as appropriate, and apply other evaluative methods as needed. Each PPAR is subject to technical peer review, internal IEG panel review, and management approval. Once cleared internally, the PPAR is commented on by the responsible World Bank Country Management Unit. The PPAR is also sent to the borrower for review. IEG incorporates both World Bank and borrower comments as appropriate, and the borrowers’ comments are attached to the document that is sent to the World Bank’s Board of Executive Directors. After an assessment report has been sent to the Board, it is disclosed to the public. About the IEG Rating System for Public Sector Evaluations IEG’s use of multiple evaluation methods offers both rigor and a necessary level of flexibility to adapt to lending instrument, project design, or sectoral approach. IEG evaluators all apply the same basic method to arrive at their project ratings. Following is the definition and rating scale used for each evaluation criterion (additional information is available on the IEG website: http://ieg.worldbankgroup.org). Outcome: The extent to which the operation’s major relevant objectives were achieved, or are expected to be achieved, efficiently. The rating has three dimensions: relevance, efficacy, and efficiency. Relevance includes relevance of objectives and relevance of design. Relevance of objectives is the extent to which the project’s objectives are consistent with the country’s current development priorities and with current World Bank country and sectoral assistance strategies and corporate goals (expressed in Poverty Reduction Strategy Papers, country assistance strategies, sector strategy papers, and operational policies). Relevance of design is the extent to which the project’s design is consistent with the stated objectives. Efficacy is the extent to which the project’s objectives were achieved, or are expected to be achieved, taking into account their relative importance. Efficiency is the extent to which the project achieved, or is expected to achieve, a return higher than the opportunity cost of capital and benefits at least cost compared with alternatives. The efficiency dimension is not applied to development policy operations, which provide general budget support. Possible ratings for outcome: highly satisfactory, satisfactory, moderately satisfactory, moderately unsatisfactory, unsatisfactory, highly unsatisfactory. Risk to development outcome: The risk, at the time of evaluation, that development outcomes (or expected outcomes) will not be maintained (or realized). Possible ratings for risk to development outcome: high, significant, moderate, negligible to low, and not evaluable. Bank performance: The extent to which services provided by the World Bank ensured quality at entry of the operation and supported effective implementation through appropriate supervision (including ensuring adequate transition arrangements for regular operation of supported activities after loan or credit closing, toward the achievement of development outcomes). The rating has two dimensions: quality at entry and quality of supervision. Possible ratings for Bank performance: highly satisfactory, satisfactory, moderately satisfactory, moderately unsatisfactory, unsatisfactory, and highly unsatisfactory. Borrower performance: The extent to which the borrower (including the government and implementing agency or agencies) ensured quality of preparation and implementation, and complied with covenants and agreements, toward the achievement of development outcomes. The rating has two dimensions: government performance and implementing agency(ies) performance. Possible ratings for borrower performance: highly satisfactory, satisfactory, moderately satisfactory, moderately unsatisfactory, unsatisfactory, and highly unsatisfactory. vi Preface This Project Performance Assessment Report (PPAR) assesses the Rwanda Quality of Decentralized Service Delivery Support Development Policy Operation, in the amount of $50 million, which was approved by the Board of Executive Directors on May 14, 2013, and closed as scheduled on June 30, 2014. The purpose of the PPAR is to examine the extent to which this development policy operation achieved its relevant objectives and the sustainability of outcomes after project closure. In addition to its accountability and lesson-learning functions, the PPAR provided input for Country Program Evaluation by the Independent Evaluation Group (IEG) for Rwanda for fiscal years 2009–17. It will also serve the purpose of providing input to an upcoming IEG thematic evaluation on strengthening subnational governments. The report presents findings based on a review of the program document, the Implementation Completion and Results Report, relevant laws of Rwanda, and the government of Rwanda’s budget documents, policies, strategies, action plans, and progress reports. Information was also obtained from stakeholder interviews during an IEG mission in Rwanda in January and February 2018 and from interviews with World Bank staff. IEG acknowledges the cooperation and support provided by staff of the government of Rwanda, especially the Fiscal Decentralization Unit under the Ministry of Finance and Economic Planning; staff of other relevant ministries, government institutions, and district offices; private sector and civil society organizations; and development partners, who provided valuable insights into the World Bank Group’s program in Rwanda. IEG also extends its appreciation to the staff of the World Bank’s country office in Rwanda. The names of interviewees appear in appendix D. Following standard IEG procedures, a copy of the draft report was sent to the relevant government officials and agencies for their review and feedback. No comments were received. vii Summary This Project Performance Assessment Report (PPAR) reviews the Rwanda Quality of Decentralized Service Delivery Support Development Policy Operation (QDS DPO), which was approved by the Board of Executive Directors on May 14, 2013, and became effective on June 4, 2013. The program, which was financed by an International Development Association (IDA) grant of $50 million, closed as scheduled on June 30, 2014. Preparation took place against the background of significant political and economic difficulties for Rwanda that risked undermining achievements in poverty reduction and service delivery. Owing to alleged Rwandan support for rebel activity in the neighboring Democratic Republic of Congo, many development partners suspended or delayed planned budget support to Rwanda. Moreover, the time frame for preparation—two months from the time of preparation of the concept note to Board approval—was highly compressed. The program development objectives (PDOs) were (i) to support the government of Rwanda in clarifying institutional roles and responsibilities for decentralized service delivery and (ii) to enhance public transparency, fiduciary accountability, and local government capacity for improved access to quality services. The PDOs were highly relevant to the country context and well aligned with the government’s and the World Bank Group’s strategies. Relevance of the design is rated substantial, reflecting a generally robust theory of change and a logical causal chain linking activities to expected outcomes, despite some apparent weaknesses in the additionality of the operation and the institutional depth of measures it supported. The choice of instrument was appropriate, providing flexibility to resolve a financing impasse and restore dialogue with external development partners in a context of rapidly changing circumstances. The underlying macroeconomic framework was satisfactory, with monitoring of macrofiscal developments conducted through policy dialogue and analytical work. Efficacy in achieving the two PDOs is rated substantial. The decentralization policy framework was strengthened through the adoption of new legislation and presidential orders, which clarified the roles and responsibilities of central and local governments. Establishment and implementation of the new framework facilitated service provision and, subsequently, collection of local fees. Public transparency, fiduciary accountability, and local government capacity were enhanced. The capacity of local governments was strengthened through the rollout of an Integrated Financial Management Information viii System (IFMIS) at the local level and the implementation of plans for capacity development at the district level. Citizen participation rates, including female participation rates, in government programs were enhanced through the adoption and implementation of the Access to Information Law, which provides the right to public information. Improved capacity and enhanced participation would likely have contributed to service delivery improvements, although direct evidence for the latter is difficult to come by, and perceptions concerning the quality of popular participation in decision making are mixed. In addition, the operation contributed to macroeconomic stability, sustained progress in poverty reduction, and a restoration of dialogue with, and financial support from, other external development partners. Given the high relevance of objectives, substantial relevance of design, and substantial efficacy in the achievement of both objectives, as well as the pertinence of the World Bank’s financial contribution, the outcome is assessed as satisfactory. The risk to development outcome is judged moderate. Resumption of external financial support has reduced macroeconomic risks, and there has been some alleviation of tensions in the region. Risks to the sustainability of the program’s outcomes are mitigated by strong ownership on the part of the government, as evidenced by its continuing capacity building and reform efforts with support from the World Bank and other partners. Bank performance is rated satisfactory. The World Bank demonstrated flexibility and agility in response to the 2012 cutback in external support. The program was well designed and took account of country conditions and implementation capacity. The World Bank team provided timely and well-focused support during implementation, and the authorities were especially appreciative of the team’s contribution to policy dialogue and mobilizing other external partners. Government performance is rated satisfactory. The government demonstrated strong ownership, commitment, and leadership in implementing reforms before, during, and after the operation. The program was able to rely on the government’s own data, results framework, and implementation arrangements. The following lessons are drawn from the design and implementation of the program: • Strong government ownership and leadership of the reform agenda are important drivers of successful development policy financing. Although this appears self-evident, it bears repetition because development policy financing is sometimes used to attempt to leverage reforms even in cases where ownership is unclear. In Rwanda, the reform agenda supported by the QDS DPO derived ix directly from the government’s own well-defined decentralization strategy, the preparation of which was participatory and supported by several development partners, including the World Bank. Implementation of the strategy underwent regular, structured, and in-depth monitoring by the World Bank and other development partners under government leadership, using the government’s own monitoring and evaluation framework. This combination of government ownership and leadership, including its homegrown Imihigo culture of performance and results, is likely to have been decisive in securing progress in the reform agenda, which has been sustained since the QDS DPO closed. • Rollout of an IFMIS at the local government level can serve as a useful catalyst and vehicle for enhancing local capacity. In Rwanda, the structured training programs that accompanied the rollout of the IFMIS to the district and sector levels—with the support of the QDS DPO and other World Bank instruments— served as a rallying point for improving public financial management capacity and practices, notably on financial reporting. Successful implementation of the IFMIS helped local governments more efficiently budget, execute, account for, and report on a rapidly growing volume of fiscal transfers to them. • Flexibility, agility, and strategic acumen on the World Bank’s part can play a valuable role in resolving a financing impasse that threatens to jeopardize development gains. In response to cutbacks in the 2012 official development assistance, the World Bank undertook intensive consultations with its key shareholders and other stakeholders on acceptable modalities for rapidly restoring support to minimize reversals in Rwanda’s development gains. Once a consensus was reached that development policy financing focused on decentralization was an acceptable way forward, the World Bank took the initiative to prepare the QDS DPO in record time. Stakeholders widely credit the operation not only with mitigating the adverse impact of the official development assistance cutbacks but also with helping to restore normality in financing flows, including external financing and transfers to local authorities, while helping to secure continued momentum in a critical area of the country’s reform program. • In designing a DPO, there may be a trade-off between speed of response and value-added in terms of leveraging reforms. In designing the QDS DPO, the choice of instrument and policy content reflected the need to provide quick financial support that could secure the backing of key World Bank shareholders. This meant that many of the measures supported by the operation were ones that the government had already been planning, and in some cases had already x initiated, before the design of the QDS DPO was finalized. However, although the measures would likely have been taken even in the absence of the QDS DPO, the operation is likely to have facilitated their implementation, which would have been slower and more difficult in the continued absence of external financing. Auguste Tano Kouame Director Human Development and Economic Management Independent Evaluation Group xi 1. Background and Context 1.1 Rwanda is a postconflict country that has achieved rapid economic and social development since the 1994 genocide. Economic growth translated into significant poverty reduction and social improvement. Over the past decade, from 2008 to 2017, real growth in gross domestic product averaged 7.4 percent a year. The national poverty rate dropped from 56.7 percent in FY05/06 to 39.1 in FY13/14, accompanied by a modest decline in inequality—the Gini coefficient decreased from 0.52 in FY05/06 to 0.49 in FY10/11 (see appendix B, table B.1). 1.2 Macroeconomic performance was broadly positive in the years leading up to the Quality of Decentralized Service Delivery Support Development Policy Operation (QDS DPO) and remained so during implementation, driven by the government’s strong economic management and effective responses (table 1.1). Quick and appropriate fiscal and monetary responses to the global financial crisis in 2009 and to a short-term aid cutback in FY12/13 illustrate the capacity for effective management of macroeconomic shocks. With the government’s strategic public investments and export promotion, exports of goods and services increased from 11.7 percent (as a percent of gross domestic product) in FY09/10 to 14.7 percent in FY14/15. However, Rwanda’s external current account remained in significant deficit. After FY09/10, inflation stayed relatively low, in the 2–6 percent range. Although the level of public debt has increased in recent years, Rwanda remains rated at a low risk of debt distress (IMF 2017). Improvement of associated institutional capacity is reflected in the Country Policy and Institutional Assessment index for economic management, which increased to 4.0 in FY14/15. 1.3 However, Rwanda remains one of the world’s poorest countries, with large gaps between urban and rural areas and challenges in voice and accountability. Much remains to be done to enhance service delivery and government accountability. Although the poverty rate is relatively low in urban areas at 22 percent, it is 49 percent on average outside the capital, and reaches 73 percent in the rural districts where poverty is highest.1 The average poverty rate declined between 2005/06 and 2013/14, but the gap between the district with the highest poverty rate and the one with the lowest was 46 percentage points in 2013/14. There are significant disparities across districts in access to sector administration and health services, such as health centers and district hospitals (see appendix B, table B.2). Rwanda scores highly on two aspects of governance—government effectiveness and control of corruption—but it performs less well on voice and accountability (see appendix B, figure B.1). 1 Table 1.1. Rwanda Key Economic Indicators Indicator 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 GDP growth (percent) 6.3 7.3 7.8 8.8 4.7 7.6 Inflation (percent) 10.3 2.3 5.7 6.3 4.2 1.8 General government revenue 23.8 24.6 25.3 23.2 25.5 24.2 (percent of GDP) of which: grants — 13.3 10.8 9.3 8.6 7.4 General government total 23.5 25.3 26.2 25.7 26.8 28.3 expenditure (percent of GDP) Fiscal balance (percent of GDP) 0.3 −0.7 −0.9 −2.5 −1.3 −4 General government gross 19.5 20 19.9 20 26.7 29.1 debt (percent of GDP) Exports of goods and services 11.7 12 13.8 12.8 14.1 14.7 (percent of GDP) Imports of goods and services 29.7 30 30.6 31.9 31.9 32.9 (percent of GDP) Current account balance −7.0 −7.2 −7.4 −11.2 −8.7 −11.8 (percent of GDP) Foreign direct investment, net 2.2 4.3 1.8 3.5 3.4 3.9 inflows (percent of GDP) Net ODA received (percent of 17.5 18.0 19.6 12.2 14.5 13.2 GNI) Total reserves in months of — 5.7 5.6 4.1 5.0 4.5 imports CPIA economic management 3.8 3.8 3.8 3.8 3.8 4.0 index IDA resource allocation index 3.5 3.7 3.6 3.6 3.6 3.6 Sources: Rwandan authorities; International Monetary Fund, World Economic Outlook Database; World Development Indicators database; and Organisation for Economic Co-operation and Development statistics. Note: CPIA = Country Policy and Institutional Assessment; GDP = gross domestic product; GNI = gross national income; IDA = International Development Association; ODA = official development assistance. 1.4 The government identified decentralization as a key focus of the efforts to strengthen national unity and reconciliation, promote greater government accountability to citizens, and enhance service delivery. This is reflected in Rwanda’s long-term Vision 2020, which the country prepared in 2000 and revised in 2011, and the medium-term strategies to operationalize it. The second Economic Development and Poverty Reduction Strategy (EDPRS 2; 2013–18), which was launched in September 2013 after a year-long preparation process,2 focused, as an overarching priority, on strengthening accountable governance through promoting greater citizen participation in government and enhancing the quality of decentralized public service delivery. In 2000, the government adopted the initial decentralization policy for Rwanda and initiated a multiphased decentralization program that has progressively decentralized decision making, the provision of some public services, and resources.3 In 2013, the government 2 adopted a new decentralization policy to consolidate achievements and support further increases in local autonomy. Decentralization has developed in three broad phases: • The first phase (2001–06) focused on establishing five levels of government— namely, central government, provinces, districts, subdistricts (known as sectors), and cells—and democratic and community development structures at the local government level. • The second phase (2006–11) saw a significant increase in total transfers to districts, and a concomitant attempt to build more capacity in local government institutions to enhance service delivery implementation and boost local economic development. • The third phase (2011–15) emphasized improvements in the targeting of service provision to meet the needs of the poor by empowering subnational governments, including strengthening their capacity.4 1.5 Districts—the main local government entity—plan, implement, and monitor priorities of their local citizenry through a performance contract system known as Imihigo. In 2006, the government reformed the institutional framework for decentralization and reshaped the local government structure, resulting in (i) four provinces and Kigali City; (ii) 30 districts; (iii) 450 sectors; (iv) 2,148 cells; and (v) 14,744 villages, which are the lowest level of government (see appendix B, table B.3). Districts are provided with autonomy to execute budgets and deliver services in line with local needs and priorities, as long as such decisions are consistent with the national ideals and within the law. Districts also have responsibility for economic development, including agriculture, tourism, and small and medium enterprise development, as well as service delivery, including oversight of hospitals, water, and sanitation.5 The government introduced Imihigo with the aim of building greater capacity of local governments to improve planning and accelerate implementation while focusing on time-bound results and reporting. 1.6 To implement decentralization strategies and policies, legal frameworks for decentralized fiscal and financial management and service delivery have also been strengthened considerably. The Fiscal and Financial Decentralization Policy (2011) states “a fiscal and financial decentralization policy must be designed within a legal framework that clearly defines the functions and responsibilities devolved to the local level as well the decentralized sources of revenue.” The legal framework governing local government revenue was revised in 2011 with the passage of a law establishing the Sources of Revenue and Property of Decentralized Entities and Governing Their Management, and was implemented by a Ministerial Order, which regulates the range, 3 level, and rates of fees and other charges levied by local governments (World Bank 2013a, paras. 23 and 43). 1.7 With the significant increase in fiscal transfers to districts, strengthening local governments’ capacity for fiscal and financial management and service delivery assumed particular importance. The total budget administered by the districts increased ninefold, from RF 49.7 billion ($58 million) in 2006 to RF 440 billion ($514 million) in 2017/18, as the share of central government transfer to districts increased from 9 percent (RF 35.8 billion; $41.8 million) of the total national budget to 17.4 percent (RF 304.4 billion; $355.3 million; see appendix B, table B.5). At the same time, the districts’ own revenues (taxes and fees) also increased from RF 13.9 billion in 2006 to RF 51.5 billion in 2017/18.6 The 2011 Fiscal and Financial Decentralization Policy highlights the important role of local governments in delivering quality services with the autonomy to meet local needs and priorities.7 1.8 Rwanda faced political and economic difficulties in 2012 that risked undermining the progress made in poverty reduction and service delivery. Owing to alleged Rwandan support for rebel activity in the neighboring Democratic Republic of Congo, many development partners suspended or delayed planned budget support to Rwanda, leading to a cutback in official development assistance (ODA) by 7.5 percent of gross national income, from 19.6 percent to 12.2 percent and a loss equivalent to 11 percent of the budget in the first half of FY12/13 (July–December 2012; see appendix B, figure B.3). This included World Bank Poverty Reduction Support Financing of $125 million, originally planned for disbursement in that period.8 The aid shortfall translated into scarcity of resources to finance development.9 1.9 Given the situation, the World Bank began seeking ways to restore financial support to Rwanda. The World Bank had been an important financier of Rwanda’s development, disbursing $157 million (in International Development Association [IDA] financing) on average annually during FY09–13, which accounted for 15.3 percent of ODA disbursement. The World Bank also played a leading role in maintaining policy dialogue with the government and other development partners, and in analytical work.10 1.10 The operation under review was prepared in a compressed time frame and built on previous World Bank lending operations.11 The Concept Review Meeting was held in March 2013. The operation (in the form of an IDA grant of $50 million) was appraised on April 2, 2013, and approved by the Board on May 14, 2013, to provide financing to help Rwanda close out the 2012/13 financial year. The operation closed on June 30, 2014. 4 2. Relevance of the Objectives and Design Objectives 2.1 According to the program document, the program development objectives (PDOs) of the QDS DPO were (i) to support the government in clarifying institutional roles and responsibilities for decentralized service delivery; and (ii) to enhance public transparency, fiduciary accountability, and local government capacity for improved access to quality services. 2.2 The operation also intended to help: (i) mitigate the short-term economic and social impacts of the aid shortfall, (ii) prevent an adverse spillover effect on progress toward poverty reduction and the Millennium Development Goals in the medium/long- term, and (iii) sustain policy dialogue on accountable governance and service delivery during the crucial period of EDPRS 2 preparation (World Bank 2013a, para. 80). Relevance of the Objectives 2.3 The PDOs were highly relevant to the country context. Enhancing decentralized services was a key priority, as there were wide gaps in service quality across regions and districts. In addition, securing development finance had arisen as an urgent issue. Despite the government’s prudent fiscal and monetary policy measures, reducing public expenditures and tightening the monetary stance, the effects of the aid shortfall started to be translated into currency depreciation, higher interest rates, and a decline in international reserves.12 Continued shortfalls in ODA risked precipitating a deceleration in growth and poverty reduction. The financing through the QDS DPO was necessary to mitigate cuts in public expenditures and service delivery in priority areas. Continued support for reforms to secure and sustain continuing decentralization of service provision and enhanced service quality were particularly important in light of the reduced external assistance. 2.4 The PDOs were well aligned with the government’s key strategies and programs and remained so throughout implementation. Rwanda’s long-term Vision 2020 strategy had put forward “good governance and a capable state” as its first key pillar and emphasized the importance of strengthening accountability, transparency, and efficiency in deploying scarce resources. Priorities of the government’s medium-term strategy, EDPRS 2 (2013–18), are strengthening accountability by promoting greater citizen participation in government and enhancing the quality of decentralized public service delivery. The operation’s decentralization objectives were also aligned with the national decentralization policy and the multiphased decentralization program, as well 5 as with the Public Financial Management (PFM) Reform Strategy 2008–12, which highlighted capacity constraints at the subnational government level. 2.5 The PDOs were also consistent with the World Bank Group’s strategy for Rwanda. Although the operation was not originally foreseen in the FY09–13 Country Assistance Strategy, it was nonetheless of direct relevance to two of its strategic pillars: (i) promoting economic transformation and growth; and (ii) reducing social vulnerability. It was particularly well aligned with Country Assistance Strategy outcome 1.4: “Management of public resources at central and local levels strengthened.” The operation remained centrally relevant to one of the three pillars of the FY14–18 Country Partnership Strategy: “Supporting accountable governance through public financial management and decentralization” (World Bank 2014a, vi). 2.6 The relevance of objectives is rated high. Design Policy Content and Results Framework 2.7 The operation supported four policy areas mapped to the PDOs (table 2.1, see also the policy matrix in appendix C). i. Strengthening the policy framework for decentralization: This policy area aimed to support the government’s new decentralization policy, notably adopting local government structures with clear roles, responsibilities, and functions, and issuing prime ministerial instructions on decentralization arrangements in various sectors. It also aimed to improve the regulation of fee collection and other charges by decentralized entities, to facilitate increased access of citizens to the corresponding services. ii. Capacity development for quality service delivery by local governments: This policy area supported the government’s initiatives to strengthen capacity at the district level and improve service delivery, particularly through strengthening PFM.13 The elaboration and implementation of five-year district capacity building plans, and the development and application of a simplified accounting and financial reporting system in subsidiary entities of districts were also supported. iii. Improving government accountability and transparency to citizens: This policy area aimed to support initiatives to improve citizens’ participation in policy formulation, district budgetary processes, and Imihigo activities.14 iv. Enhancing local government fiduciary accountability: This policy area aimed to support the government in improving fiduciary accountability of districts 6 and their subsidiary budgetary entities, including schools and health centers, by establishing the internal and external audit function and following up on implementation of audit recommendations to improve the quality of financial reports. Implementation Arrangements 2.8 At the national level, the Ministry of Finance and Economic Planning (MINECOFIN) was responsible for the overall direction and implementation of the QDS DPO. The Fiscal Decentralization Unit in the National Budget Directorate reported on budgetary expenditure and related outputs. 2.9 Fiduciary responsibility for the implementation of the operation rested with the MINECOFIN as well as other agencies. Since the operation was a DPO, use of its proceeds was subject to country systems, in particular for procurement and financial management, including external audit. The Office of the Auditor General was responsible for independently auditing budget execution. Monitoring and Evaluation Design 2.10 Monitoring and evaluation (M&E) essentially used the policy matrix and results framework, which was based primarily on the government’s own systems to strengthen government M&E capacity.15 The M&E framework for the operation drew on the framework and indicators in the PFM Sector Strategic Plan (2013–18) and the Decentralization Sector Strategic Plan (2013–18) that were used to monitor and evaluate progress on governance, public sector reforms, and decentralization. The implementation arrangements and M&E aspects of design are discussed in the relevant section under section 3. Relevance of the Design 2.11 Prior actions and activities outlined under each of the policy areas were logically linked with expected outcomes in most cases.16 Planned activities for strengthening the policy framework, such as approving and adopting new local government structures and instructions on human resources and revenue collection, were intended to clarify institutional roles and responsibilities for decentralized service delivery and ultimately increase the effectiveness and efficiency of local governments. A prior action to adopt district capacity building plans and planned activities to implement the plans, including support to development and application of a simplified accounting and financial reporting system in subsidiary entities of districts, were designed to strengthen PFM at the local level, an essential step toward enhanced service delivery.17 Planned activities, such as publishing and promoting the Access to Information Law, building the capacity of citizens to participate in policy formulation, and access to information on district 7 development priorities, budgets, and service delivery were intended to improve government accountability and transparency. The operation also aimed to enhance fiduciary accountability by improving the quality of the financial statements through regular reporting and the use of subnational PFM systems. 2.12 Design weaknesses, though not entirely absent, tended to be minor. For example, the choice of outcome indicators did not always fully capture desired progress toward the program objectives. Filling staff positions, for instance, although important, is not in and of itself a reflection of progress unless the staff are adequately qualified. Similarly, increased revenue collection (through fees and charges) does not guarantee that fees are more appropriately proportionate to services rendered, although it does suggest increased use of such services by citizens.18 Increased access to information and participation ratios in the district budgetary process and activities do not necessarily guarantee improvement of government accountability and transparency, although they are important building blocks. 2.13 The QDS DPO facilitated the implementation of reforms, which would have been slower and more difficult in the continued absence of external financing. Nevertheless, the speed of response meant that there were some limitations on the scope of the operation to secure the prior actions it aimed to support. The operation was prepared in a very compressed time frame under difficult and urgent circumstances. It was therefore to be expected that many of the reforms it supported were already under way. For example, the prior action on the publication of a Law on Access to Information (first introduced in 2009, adopted by the Parliament in December 2012, and enacted in March 2013) was likely to contribute positively to decentralization reforms. However, the law was prepared independently of the World Bank’s partnership with the government. 2.14 The strength, and in particular the depth, of the prior actions was relatively high, though not always.19 Some of the measures were process-oriented and would not in and of themselves have brought about significant changes in the institutional environment. For example, a review of district audit committee reports and communication of areas for follow-up (prior action 5 in table 2.1) does not in and of itself accomplish much (unless the follow-up actually occurs). Nevertheless, interviews during the Independent Evaluation Group (IEG) mission, and a review of annual issues of the Report of the Auditor General of State Finances, indicate that results and recommendations of the audits have been taken seriously and have been followed by measures to strengthen local government fiduciary accountability. 2.15 The choice of instrument—a stand-alone DPO focused on decentralization- related policy reform—was appropriate.20 It provided flexibility in a context of rapidly 8 changing circumstances. The policy content benefited from broad-based support both within Rwanda and from key World Bank shareholders. 2.16 When the operation was prepared and approved, Rwanda faced two major macroeconomic challenges: first, in the near term, conducting policy and maintaining stability under highly uncertain prospects for external financing and the global and regional environments; and second, in the medium term, sustaining strong growth and poverty reduction while gradually reducing the country’s high dependence on foreign aid. The authorities responded by aligning expenditures with available financing, strengthening domestic revenue mobilization, enhancing the effectiveness of monetary policy, and ensuring that the exchange rate responded better to market fundamentals. These policies were successful in enabling the economy to recover from the shock induced by reduced aid flows. Growth had bounced back by 2014, with inflation well contained. According to the 2014 International Monetary Fund (IMF) Article IV consultation, Rwanda’s performance under its Policy Support Instrument remained strong: all quantitative assessment criteria were met and all benchmarks observed except one. The DPO played an important role in restoring stability. Since closure, macroeconomic performance has remained sound (appendix B, table B.8). In 2016, the Policy Support Instrument was supplemented by a Standby Credit Facility (appendix B, table B.4 shows the evolution of IMF support to Rwanda since 2002). 2.17 Relevance of design is rated substantial.21 9 Table 2.1. Prior Actions, Outcome Indicators, and Program Development Objectives Program Development Prior Actions Outcome Indicators Objectives Policy Area 1: Strengthened Policy Framework for Decentralization 1) The Recipient has approved a new Percentage of staff positions filled Clarifying decentralization policy which clarifies the roles in revised organizational structures institutional roles and responsibilities of central and local (Target: 70 percent) and government (Met) responsibilities for decentralized 2) The Recipient has published in the Official Fees and charges collected by service delivery Gazette the Presidential Order establishing the districts (Target: 12 percent list of fees and other charges levied by increase from the program baseline decentralized entities and the applicable – RF 134 million in 2012) thresholds (Met) Policy Area 2: Capacity Development for Quality Service Delivery by Local Governments 3) The Recipient has adopted twenty-eight (28) PEFA PI-23 (availability of Enhancing public District capacity building plans approved by the information on resource received transparency, District Councils (Met) by service delivery unit) (Target: C fiduciary rating) accountability, and local Policy Area 3: Improving Government Accountability and Transparency to government Citizens capacity for 4) The Recipient has published in the Official Percent of citizens who participate improved access Gazette a new Access to Information Law which in the district budgetary process (of to quality services provides for the public’s right to information which, women) (Target: 20 percent, (Met) of which, women 19 percent) Percent of citizens who participate in the formulation of Imihigo activities (of which, women) (Target: 30 percent, of which, women 28 percent) Policy Area 4: Enhanced Local Government Fiduciary Accountability 5) The Recipient has reviewed 25 District audit The number of districts with committee reports of 2012 and issued qualified audit (Target: 5 districts) communication to the Districts on the main areas for follow-up (Met) Sources: World Bank 2014b, 2014c, and 2015b. Note: PEFA = Public Expenditure and Financial Accountability. 10 3. Implementation Planned versus Actual Expenditure 3.1 The grant to Rwanda was approved for $50 million. It was disbursed in full ($46.5 million) on coming into effect. The difference between planned and disbursed amounts resulted from exchange rate fluctuations. Implementation Experience 3.2 The grant was appraised on April 2, 2013, and approved on May 14, 2013. It became effective on June 4, 2013. The program was closed as scheduled on June 30, 2014. All five prior actions were met before approval (see prior actions in table 2.1). The PDOs and key indicators were not revised. The policy areas were not revised. Safeguards Compliance 3.3 The policies supported by this operation were not expected to have any adverse effects on the environment. No safeguards policies were triggered. The operation’s social impact was expected to be favorable, as its focus was on improved public service delivery, especially to the poor and vulnerable groups. Financial Management and Procurement 3.4 There were no issues of fiduciary compliance. The proceeds of the grant followed the financing agreement, which prohibited ineligible expenditures (that is, to finance goods and services from the IDA’s standard negative list). Monitoring and Evaluation 3.5 Design. Design of the M&E framework was largely adequate, albeit with some shortcomings. The choice of indicators was generally adequate and fulfilled the “SMART” criteria with clear baselines and targets.22 Some indicators captured intermediate outcomes rather than the ones ultimately of interest (specifically, the indicator on the number of decentralized positions filled and the indicator on collection of fees.) 3.6 Implementation. M&E performance indicators were monitored regularly through the Joint Sector Reviews under the auspices of the relevant Sector Working Groups (SWGs), along with the government and development partners.23 Rwanda offers an environment conducive to M&E, including the regular, in-depth joint monitoring of progress in sector strategy implementation that is undertaken through the SWGs (World 11 Bank 2018b). The IEG mission was informed that the Decentralization SWG undertakes and discloses regular monitoring of progress in implementing sector strategic plans. 3.7 Use. The M&E under this operation was used to select key policy areas in the subsequent Public Sector Governance Program-for-Results operation. Some of the outcome indicators were also used to assess the continuing reforms and their outcomes. 3.8 M&E is rated substantial, considering the adequate design of the M&E framework (minor weaknesses notwithstanding), sound M&E implementation, and effective use of M&E results. 4. Achievement of the Objectives Objective 1 4.1 Objective 1 was supporting the government to clarify institutional roles and responsibilities for decentralized service delivery. 4.2 Strengthening the policy framework for decentralization. With respect to local government structure, new legislation and presidential orders, which clarified the roles and responsibilities of central and local government, were approved during 2013 (prior action 1). Guidance materials were issued by the government to ensure sound implementation of new legislation. The organizational structures and functioning of subnational government entities were improved by eliminating duplication of work and facilitating the allocation of human and financial resources in a way more commensurate with their functions and responsibilities. During FY13/14, the entities started filling staff positions in the revised organizational structures. The reform on organizational structures continued after program closure. Data from the Integrated Payroll and Personnel Information System shows that 79.2 percent of staff positions were filled in FY13/14 (when the Implementation Completion and Results Reports was prepared), exceeding the target (70 percent; PDO indicator 1). The latest Integrated Payroll and Personnel Information System data collected during the IEG mission shows that 94.6 percent of staff positions were filled in FY17/18 (table 4.1). The number of districts reaching close to 85–100 percent of staff positions filled doubled during the period. 4.3 Regarding local fees and other charges, the Official Gazette published a presidential order establishing the list of fees and other charges levied by decentralized entities and the applicable thresholds (prior action 2).24,25 This provided a framework to ensure that fees and other charges levied by decentralized entities are consistent with the quality of services local governments are capable of offering. The operationalization of a one-stop-shop approach supported implementation of the new framework and 12 facilitated service provision and, subsequently, collection of local fees. For example, the new presidential order (n°25/01) included 18 fees and charges collected by districts, such as fees charged on land lease, land used for agriculture and livestock activities, and provision of land and plot related services. A one-stop shop for all services related to construction permits and land management was operationalized. The time needed to procure a construction permit was reduced to fewer than 30 days from more than a hundred (RDB 2017).26 The time and cost of providing services by the districts was reduced, which contributed to improving the local business environment and increasing the fees collected from the population.27 The fees and charges collected by districts (PDO indicator 2) increased by 33 percent, exceeding the original target (12 percent), from RF 13.9 trillion in FY12/13 to RF 18.5 trillion in FY13/14 (table 4.2). The districts’ own revenues (taxes and fees and charges) significantly increased from RF 13.9 trillion in 2006 to RF 51.5 trillion in FY17/18. The increased collection of fees and charges, as well as streamlining and cost reduction, suggest that services were more relevant to the needs of the public. There are, moreover, several channels where citizens can provide feedback on local government services, including Citizen Report Cards, Community Score Cards, and call desks. The Citizen Report Card shows that overall net citizen satisfaction with services delivered by local government institutions increased from 60 percent in 2014 to 75.9 percent in 2016 (figure 4.1). 28 13 Table 4.1. Staff Positions Filled in Revised Organizational Structures, by District Staff Staff Staff in Positions Positions Positions Revised Positions Filled Filled (ICR in Filled (PPAR Organizational Filled (ICR in (PPAR in 2013/14) in 2017/18) Structure 2013/14) 2017/18) District (no.) (no.) (no.) (percent) (percent) Bugesera 303 345 354 85.6 97.5 Burera 283 268 370 76.5 72.4 Gakenke 350 362 448 78.1 80.8 Gasabo 251 267 426 58.9 62.7 Gatsibo 270 443 337 80.1 131.5 Gicumbi 381 476 494 77.1 96.4 Gisagara 240 261 306 78.4 85.3 Huye 260 279 353 73.7 79.0 Kamonyi 234 267 295 79.3 90.5 Karongi 272 214 364 74.7 58.8 Kayonza 216 222 277 78.0 80.1 Kicukiro 243 150 287 84.7 52.3 Kirehe 258 275 297 86.9 92.6 Muhanga 263 328 303 86.8 108.3 Musanze 269 397 346 77.7 114.7 Ngoma 255 285 327 78.0 87.2 Ngororero 272 348 334 81.4 104.2 Nyabihu 266 461 323 82.4 142.7 Nyagatare 342 331 411 83.2 80.5 Nyamagabe 339 396 416 81.5 95.2 Nyamasheke 273 426 346 78.9 123.1 Nyanza 241 329 257 93.8 128.0 Nyarugenge 186 284 299 62.2 95.0 Nyaruguru 295 423 343 86.0 123.3 Rubavu 296 285 337 87.8 84.6 Ruhango 217 263 262 82.8 100.4 Rulindo 302 434 374 80.7 116.0 Rusizi 347 434 431 80.5 100.7 Rutsiro 237 281 312 76.0 90.1 Rwamagana 274 146 363 75.5 40.2 Total 8,235 9,831 10,392 79.2 94.6 Sources: Ministry of Local Government and Ministry of Finance and Economic Planning. Data extracted from the government’s Integrated Payroll and Personnel Information System. Note: ICR = Implementation Completion and Results Report; PPAR = Project Performance Assessment Report. 14 Table 4.2. Collection of Fees and Charges, by District Actuals Actuals Actuals Fees and Charges FY12/13 FY13/14 FY17/18 Fees and charges (RF, trilliosn) 13.9 18.5 — Increase (relative to base year FY12/13; percent) — 33 — District own revenues (taxes and fees/charges; RF, trillions) 30.6 36.9 51.5 Increase (relative to base year FY12/13; percent) — 21 68 Sources: Data obtained from the Ministry of Finance and Economic Planning during the Independent Evaluation Group field mission and World Bank (2014b). Note: — = not available. Figure 4.1. Overall Satisfaction with Services Rendered by Local Government 100 74.3 75.9 80 60 60 Percent 40 18 20 9 9.9 0 2014 2015 2016 Net satisfaction Net dissatisfaction Sources: RGB 2014, 2015, and 2016. 4.4 The efficacy of this objective is rated substantial. Objective 2 4.5 Objective 2 was enhancing public transparency, fiduciary accountability, and local government capacity for improved access to quality services. 4.6 Capacity development for quality service delivery by local governments. Twenty-eight five-year district capacity building plans, each of which was approved by the relevant District Council, were adopted by the government (prior action 3) and implemented. A simplified accounting and financial reporting system (Subsidiary Entity Accounting System, SEAS) in subsidiary entities of districts was developed with the aim of ensuring that districts’ accounting and reporting through The Integrated Financial Management Information System (IFMIS) adequately captured their subsidiary entities’ (that is, sectors’) financial information.29 The SEAS was piloted in 181 sectors of 14 15 districts, covering 40 percent of all sectors, by June 2014 (World Bank 2014b, 15). The use of SEAS was expanded to all 416 sectors by July 2017 (table 4.3). This surpassed the target (80 percent by June 2018), which was set under the subsequent Public Sector Governance Program-for-Results operation (World Bank 2018a). Capacity building initiatives for government officials at the subnational levels on planning and budgeting; bank accounts, debt, and arrears management; reporting procedures; consolidating procedures; and the IFMIS interface application were conducted by MINECOFIN with support from the World Bank.30 Table 4.3. Sectors Using the Subsidiary Entity Accounting System Sector or Share December 2013 June 2014 July 2017 June 2018a Sectors using SEAS (no.) Kigali City only 181 416 333 Share of the total number n.a. 44 100 80 of sectors (percent) Sources: Ministry of Finance and Economic Planning; and World Bank 2018a. Note: n.a. = not applicable; SEAS = Subsidiary Entity Accounting System. a. Target set in the next operation. 4.7 Other initiatives and systems were launched to improve the availability and transparency of resources allocated to subnational entities, including the issuance of guidelines on earmarked transfers to service delivery units and the implementation of earmarked transfers. MINECOFIN issued Earmarked Transfers Guidelines to the Decentralized Entities (2014, 2015a, 2016, 2017) every year to facilitate implementation by the end users (that is, individual schools and health facilities across the country).31 With the improvement of the earmarked transfers system, the service delivery units were provided the funds directly from the national treasury with a view to delivering services more effectively, rapidly, and with increasing accountability.32 The earmarked funds released to the service delivery units in education and health increased from RF 16.4 billion in FY11/12 to RF 21.8 billion in FY13/14 for education, and RF 2.9 billion to RF 5.4 billion for health (World Bank 2014b, 16). 4.8 Improvements in Public Expenditure and Financial Accountability (PEFA) scores over time are broadly suggestive of improvements in service delivery capacity. The PI- 23 indicator (PDO indicator 3), which assesses the availability of information on resources received by service delivery unit, improved from a score of D in 2010 to C in 2014 and met the outcome target (table 4.4).33,34 Other PEFA indicators also had relatively good ratings, such as policy-based budgeting to plan services (PI-11 and PI-12), predictability in the availability of funds to support expenditure (PI-16), and transparency of intergovernmental fiscal relations (PI-8) (Rwanda 2016, 14–15). All of 16 these indicators were either improved from 2010 or maintained what may be regarded as a satisfactory level of performance (table 4.4). Furthermore, the 2015 PEFA indicates a significant improvement of Rwanda’s PFM capacity. One-third (11 indicators) of all the PEFA indicators (31 indicators) were improved from 2010 to 2015 and 14 indicators were maintained, and only three indicators declined in rating (appendix B, table B.7). 4.9 The IEG mission confirmed the implementation of IFMIS at district and sector levels because of enhanced capacity of local government officials to operate the system.35 Government officials at both the central and subnational levels mentioned that the systems are used to improve resource management and financial reporting. At all four visited, the local government officials informed the mission that the IFMIS has been rolled out at the district level and used for district-level accounting and reporting. The simplified SEAS is operating at the sector level. In the Gatsibo District, officials at both district and sector levels demonstrated the use of the IFMIS in pulling up timely financial information. The capacity building through training by modules and functionalities was one of the key factors in the successful implementation of IFMIS.36 The officials emphasized the importance of the system in efficiently executing, monitoring, and reporting on the increasing amount of fiscal transfers (appendix B, table B.6). The IFMIS also has been an important tool to avoid mistakes in reporting financial statements. 17 Table 4.4. Rwanda Public Expenditure and Financial Accountability Scores for Selected Indicators Performance PEFA Indicators 2007 2010 2015 Change (2010–15) B. Key Cross-Cutting Issues: Comprehensiveness and Transparency PI-8 Transparency of intergovernmental fiscal B A A No change relations C. Budget Cycle C. (i) Policy-Based Budgeting PI-11 Orderliness and participation in the annual B+ B+ A Improvement budget process PI-12 Multiyear perspective in fiscal planning, C+ C+ B+ Improvement expenditure policy, and budgeting C. (ii) Predictability and Control in Budget Execution PI-16 Predictability in the availability of funds for B+ B+ B+ No change commitment of expenditures C. (iii) Accounting, Recording, and Reporting PI-23 Availability of information on resources D D C Improvement received by service delivery units PI-25 Quality and timeliness of annual financial C+ D+ C+ Improvement statements Sources: PEFA 2007, 2010, and 2015. 4.10 Improving government accountability and transparency to citizens. The Access to Information Law, which provides the right to public information, was gazetted in March 2013 (prior action 4).37 The law established the Rwanda Broadcasting Agency and determined its mission, organization, and functioning. Five ministerial orders determining modalities for the implementation of the law were adopted and published in the Official Gazette. A number of additional activities, such as awareness campaigns and media literacy campaigns, were undertaken to ensure the law’s implementation. Access to information was enhanced. According to the Rwanda Media Barometer, as a result of the introduction of the Access to Information Law, the score of the indicator on “media availability and access to information for citizens” increased from 55 percent in 2013 to 66 percent in 2016 (Rwanda Governance Board 2016b).38 District initiatives (such as Open Days, Citizen’s Charter, Governance Month, and so on.) to promote citizen voice and participation in different aspects of governance and service delivery were re- enforced. A “Gender Sensitivity” citizens guide was used in all districts during planning and budgeting for FY13/14. Citizen participation, including of women, in the district budgetary process and in formulation of the Imihigo activities increased. 18 4.11 The citizen participation rates and the ratio of female participation in government programs exceeded the targets (PDO indicator 4). The share of citizens who participated in the district budgetary process (PDO indicator 5) increased from 11 percent in 2010 to 29 percent in 2013, surpassing the target (table 4.5).39 The share of women in the total number of citizens who participated was 52 percent, surpassing the target value of 19 percent. The participation of citizens in preparing Imihigo activities increased from 24 percent in 2010 to 72 percent in 2013 compared with the target of 30 percent. The share of women was 52 percent against the target value of 28 percent. During its field visits to districts, the IEG mission observed the active participation of women in district administration and activities.40 Table 4.5. Citizens’ Participation in District Administration (percent) Indicator 2010 2013 Target Share of citizens who participate in the district budgetary process 11 29 20 of which women 10 52 19 Share of citizens who participate in the formulation of Imihigo activities 24 72 30 of which women 22 52 28 Source: World Bank 2014b, based on the Rwanda Governance Board’s database compiled for the 2013 Rwanda Citizen’s Scorecard. 4.12 However, perceptions of the quality of citizens’ participation show mixed results. The Citizens Report Card 2016 shows that the share of citizens who are satisfied with their participation in government programs increased from 51 percent in 2015 to 58.9 percent in 2016 (table 4.6). In 2016, the share of women who were satisfied with citizens’ participation was higher than men. Nevertheless, the detailed results show that citizens are dissatisfied with their participation especially in budgetary processes and Imihigo activities. In 2016, some of the activities where dissatisfaction with participation was high included preparation of district action plans; preparation of district budgets, preparation of the performance indicators of the district; and having a say in decision making; these were rated at 52.6 percent, 54.1 percent, 45.5 percent, and 43.2 percent, respectively (figure 4.2). In comparison, the same indicators in Citizens Report Card 2015 were rated at 67.5 percent, 66.6 percent, 61.3 percent, and 59 percent, respectively (Rwanda Governance Board 2015). This suggests that dissatisfaction with the quality of citizens’ participation has remained high, and efforts to increase participation need to be implemented quickly so that citizens better participate in the decisions that affect them. Although government accountability and transparency to citizens, as measured by access and participation, have been enhanced, the challenge remains to improve the perceived quality of participation. 19 Table 4.6. Overall Satisfaction of Citizens with Their Participation in Government Programs (percent) Citizen Participation CRC 2015 CRC 2016 Net satisfaction ratio 51.0 58.9 Net dissatisfaction ratio 41.3 33.8 Sources: RGB 2015 and 2016. Note: CRC = Citizen Report Card. Figure 4.2. Satisfaction of Citizens with Their Participation in Government Programs by Program or Activity, 2016 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Preparing plan of action of the district Preparing district budget Preparing performance indicators of the district Having a say in the decision making Attending and giving views in citizen forums Election of leaders Volunteering Attending Public Works Day (umuganda) Holding leaders accountable Resolving issues of other citizens Classifying citizens into Ubudehe categories Selecting VUP beneficiaries Selecting Girinka beneficiaries Building for the vulnerable Net satisfaction Net dissatisfaction Source: Survey primary data (RGB 2016a). Note: Ubudehe refers to the long-standing Rwandan practice and culture of collective action and mutual support to solve problems within a community. The Girinka Program is a pro-poor that helps improve the welfare of poor families. For example, Rwandans give cattle to one another or provide milk to those in need. 4.13 Enhancing local government fiduciary accountability. Twenty-five district audit committee reports of 2012 were reviewed by the Office of the Auditor General and the main areas for follow-up communicated to the districts (prior action 5). The QDS DPO supported initiatives to follow up on recommendations from the District’s Audit Committees, by issuing communication to the districts on the main areas for improvements and implementing audit queries, which are to ensure that public funds are used for the intended purposes (World Bank 2014b, 19). A handbook, which provides broad guidelines that can be used by audit committees in the districts and elsewhere in the public sector, was published by MINECOFIN and deployed. Capacity building of council committees and staff involved in accounting and financial reporting 20 was conducted. At the end of the QDS DPO, districts had implemented 63 percent and 67 percent of audit recommendations in 2012 and 2013, respectively. The share of implementation of the previous audit recommendations has further increased to about 70 percent in 2016 and 2017, despite a decline in 2015 to 53 percent. Table 4.7. Status of Implementation of Previous Audit Recommendations by Local Governments, Districts and City of Kigali Status FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 Share of previous audit 63 67 64 53 71 69 recommendations fully implemented Source: Report of the Auditor General of State Finances for the Year Ended 30 June 2012–17. 4.14 The Auditor General, which was responsible for independently auditing budget execution, found the districts’ financial statements had improved, as the proportion of districts receiving “minimally qualified” audit opinions increased.41 The number of districts that received a “qualified” audit opinion (PDO indicator 6) on their financial statements increased from a baseline of zero in FY11/12 to three in FY12/13 (World Bank 2014b, 2014c).42 All 30 districts had qualified audits in FY14/15 (World Bank 2014b), surpassing the target value of five.43 4.15 The efficacy of this objective is rated substantial. The Operation’s Role in Financing and Sustaining Policy Dialogue 4.16 In addition to supporting the enhancement of service delivery through decentralization, the operation benefited Rwanda’s economy in three ways. First, as noted in section 2, the financing mitigated the immediate macroeconomic impact of the cutback in external assistance. Second, the operation helped the authorities to maintain public spending in priority areas.44 The operation also eased the potential negative impact of the cutback in aid on social outlays, including transfers to local authorities. These transfers did not decline in absolute terms and declined only slightly as a share of the total national budget, from 17 percent in FY11/12 to 15.6 percent in FY12/13 and 14.7 percent in FY13/14 (table ?.8). Progress in poverty reduction was sustained. The national poverty headcount continued to decline, from 56.7 percent in 2005/06 and 44.9 percent in 2010/11 to 39.1 percent in 2013/14 (see appendix B, table ?.1) and there were further improvements in most of the Millennium Development Goals indicators (see appendix B, table B.9). Child and maternal mortality rates declined from 2012 to 2015, and access to cleaner water and better sanitation continued to increase. Third, the government informed the IEG mission that the World Bank’s leadership role in sustaining policy dialogue with other development partners through the preparation 21 and implementation of this operation provided these partners with a level of confidence sufficient to resume exchanging views and eventually restoring financial support. Table 4.8. Intergovernmental Transfers Transfers FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 Total district budget 265 339 346 374 401 445 440 (RF, billions) District Own Revenues 28 31 37 40 46 50 52 (Taxes and Fees) Transfers from 190 242 247 271 285 304 365 CG External grants 23 38 30 24 28 44 24 Total national budget 1,117 1,550 1,678 1,753 1,808 1,949 2,095 Own Revenues to Local Government 10.6 9.0 10.7 10.7 11.4 11.2 11.7 Budget (percent) CG Transfers to Local Government Budget 71.5 71.4 71.3 72.4 71.0 68.5 82.9 (percent) CG Transfers to Total National Budget 17.0 15.6 14.7 15.4 15.7 15.6 17.4 (percent) Source: Ministry of Finance and Economic Planning. Note: CG = central government. 5. Ratings Outcome 5.1 The project’s development objectives were highly relevant to country conditions, to the government’s strategies at appraisal and closure, and to the World Bank’s Country Assistance Strategy. Project design was substantial—the lending instrument was appropriate, and the theory of change reflected in a robust causal chain linking activities to expected outputs and outcomes. Efficacy in achieving the two project objectives is rated substantial. The decentralization policy framework was strengthened through the adoption of new legislation and presidential orders, which clarified the roles and responsibilities of central and local governments. The establishment and implementation of the new framework facilitated service provision, and subsequently collection of local fees. Public transparency, fiduciary accountability, and local government capacity were enhanced through the rollout of IFMIS and the implementation of district capacity development plans as well as through the adoption and the implementation of the Access to Information Law during and after the operation. 22 These would likely have contributed to improved service delivery, although direct evidence for the latter is thin, and perceptions concerning the quality of popular participation in decision making are mixed. The operation also contributed to macroeconomic stability, sustained progress in poverty reduction, and a restoration of dialogue with, and financial support from, other external development partners. 5.2 Overall, shortcomings are considered minor and outcome is rated satisfactory. Risk to Development Outcome 5.3 Political and macroeconomic risks are considered moderate in view of the resumption of project financing by donors in the years following the approval of the operation, and some easing in regional tensions. The risks to sustainability of the achieved outcomes are moderate, as the government has continued to implement reforms, thereby demonstrating strong ownership. In so doing, it has continued to receive the backing of external partners, including the World Bank. This support is helping to improve the efficiency of government expenditure programs and build institutions and capacity by way of supporting the implementation of the government’s own PFM Sector Strategic Plan. 5.4 The risk to development outcome is rated moderate. Bank Performance Quality at Entry 5.5 The World Bank demonstrated flexibility and agility in response to the 2012 cutback in external support. The World Bank team prepared the operation in less than three months under difficult political and economic circumstances. It was correctly believed that the policies to be supported could garner sufficient support from key World Bank shareholders. The operation supported the government’s efforts to secure critical expenditures for service delivery and prevent a slowing or reversal of gains in poverty reduction. 5.6 Although the operation facilitated implementation of the government’s program, which risked being jeopardized in the continued absence of external financing, the speed of response meant that there were some limitations in the extent to which it could support reforms. Many of the reforms it supported were already under way, rather than being the product of dialogue between the government and the World Bank in a long- standing preparation process. There was a lack of institutional depth in some of the prior actions, though they were later built on. 23 5.7 Analytical work on decentralization and PFM complemented and underpinned the operation. A key product was a policy note on technical assistance (World Bank 2010). The policy note discussed bottlenecks at the district level that would pose the most critical constraints to efficiency of spending and recommended completing a capacity building plan for the districts with emphasis on on-the-job training, including clarification of roles and responsibilities, as well as a strategy to retain workers at the district level and strengthen links between sector ministries and districts. Other major key analytical work included PEFA assessments (2007 and 2010), the Government’s Fiscal Decentralization Strategy (2011), Decentralization Sector Strategic Plan (2013–18), PFM Draft Sector Strategic Plan (2013–18), Joint Governance Assessments (2008 and 2011—World Bank 2013a, annex 7). 5.8 Design took account of the country conditions and risks and of the capacity of central and local governments. Considering the progress already made in decentralization and the institutionalized joint government-donor monitoring of the implementation of the associated strategy, the World Bank used the government’s own implementation and M&E arrangements (see section 3). The macroeconomic policy framework was considered satisfactory at the time of preparation. 5.9 The operation was designed to mitigate the four main risks identified at the appraisal stage: (i) political risks, (ii) macroeconomic risks, (iii) stakeholder risks, and (iv) program-specific risks (World Bank 2013a, 2014b). Financing through this operation and IMF advice were expected to mitigate macroeconomic risks. Other World Bank operations, such as the Second Support to the Social Protection System DPO and Governance for Competitiveness Project, were to mitigate program-specific risks, particularly weak government capacity at the local level. Close and sustained consultations with the government and development partners were considered key to address risks associated with the aid cutbacks. 5.10 Quality at entry is rated satisfactory. Quality of Supervision 5.11 The World Bank team monitored progress on implementation of the reform program primarily through the Joint Sector Reviews with the government and development partners. The World Bank served as cochair of the PFM SWG, which covers fiscal decentralization and PFM at the subnational level, until late 2016 with MINECOFIN. The World Bank was also a participant in the SWG on Governance and Decentralization, which was cochaired by the Ministry of Local Government and Germany.45 The IEG mission was informed that the World Bank’s active participation was highly appreciated by both government and development partners. The World Bank has continued to monitor reforms through the subsequent Public Sector 24 Governance Program-for-Results operation. The World Bank and the IMF also worked closely to ensure coordination and consistency in their macroeconomic and structural policy programs and the IMF’s Policy Support Instrument reviews. 5.12 The quality of World Bank supervision is rated satisfactory. Together, these lead to an overall rating of Bank performance of satisfactory. Borrower Performance Government Performance 5.13 The government demonstrated strong ownership, commitment, and leadership to implement the reforms before, during, and after the operation. These were the main factors in the operation’s success. The government used its own results framework, implementation arrangements, and data. Its effective management enabled the World Bank and other development partners to play a positive role in effectively supporting the country’s development. The IEG mission was informed that, through the operation, the government had reestablished good relationships and coordination with donors and stakeholders. 5.14 Government performance is rated satisfactory. Implementing Agency Performance 5.15 The government and implementing agencies were indistinguishable and only one rating is provided. 5.16 Implementing agency performance is considered the same as government performance and is rated satisfactory. These lead to an overall borrower performance rating of satisfactory. 6. Lessons 6.1 The following lessons are drawn from the design and implementation of the program: 6.2 Strong government ownership and leadership of the reform agenda are important drivers of successful development policy financing. Although this appears self-evident, it bears repetition because development policy financing is sometimes used to attempt to leverage reforms even in cases where ownership is unclear. In Rwanda, the reform agenda supported by the QDS DPO derived directly from the government’s own well-defined decentralization strategy, the preparation of which was participatory and supported by several development partners, including the World Bank. Implementation 25 of the strategy underwent regular, structured, and in-depth monitoring with the World Bank and other development partners under government leadership, using the government’s own M&E framework. This combination of government ownership and leadership, including its homegrown Imihigo culture of performance and results, is likely to have been decisive in securing progress in the reform agenda, which has been sustained since the QDS DPO closed. 6.3 Rollout of an IFMIS at the local government level can serve as a useful catalyst and vehicle for enhancing local capacity. In Rwanda, the structured training programs that accompanied the rollout of the IFMIS to the district and sector levels—with the support of the QDS DPO and other World Bank instruments—served as a rallying point for improving PFM capacity and practices, notably on financial reporting. Successful implementation of the IFMIS helped local governments more efficiently budget, execute, account for, and report on a rapidly growing volume of fiscal transfers to them. 6.4 Flexibility, agility, and strategic acumen on the World Bank’s part can play a valuable role in resolving a financing impasse that threatens to jeopardize development gains. In response to the 2012 ODA cutbacks, the World Bank undertook intensive consultations with its key shareholders and other stakeholders on acceptable modalities for rapidly restoring support to minimize reversals in Rwanda’s development gains. Once a consensus was reached that development policy financing focused on decentralization was an acceptable way forward, the World Bank took the initiative to prepare the QDS DPO in record time. Stakeholders widely credit the operation not only with having mitigated the adverse effect of the ODA cutbacks but also with helping to restore normality in financing flows, including external financing and transfers to local authorities, while helping to secure continued momentum in a critical area of the country’s reform program. 6.5 In designing a DPO, there may be a trade-off between speed and agility of response and value-added in terms of leveraging reforms, and additionality in securing reforms. In designing the QDS DPO, the choice of instrument and policy content reflected the need to provide quick financial support that could secure the backing of key World Bank shareholders. This meant that many of the measures supported by the operation were ones that the government had already been planning, and in some cases had already initiated, before the design of the QDS DPO was finalized. However, though the measures would likely have been taken even in the absence of the QDS DPO, nevertheless the operation likely facilitated implementation of the government’s program, which would have been slower and more difficult in the continued absence of external financing. 26 Bibliography Chemouni. B. 2014. “Explaining the Design of the Rwandan Decentralization: Elite Vulnerability and the Territorial Repartition of Power.” Journal of Eastern African Studies 8 (2): 246–262. Harelimana, Jean Bosco. 2017. “Impact of Integrated Financial Management Information System on Performance of Public Institutions in Rwanda.” Enterprise Risk Management 3 (1): 38– 51. IMF (International Monetary Fund). 2017. “Rwanda: Staff Report for the 2017 Article IV Consultation, Seventh Review Under the Policy Support Instrument, and Second Review Under the Standby Credit Facility.” IMF Country Report 17/217, IMF, Washington, DC. IMF Independent Evaluation Office. 2007. Structural Conditionality in IMF-Supported Programs. Washington, DC: IMF Independent Evaluation Office. OAG (Office of the Auditor General). 2012. Report of The Auditor General of State Finances for the Year Ended 30 June 2012. Kigali, Rwanda: Rwanda Governance Board. Open Knowledge International. 2015. Global Open Data Index 2015. London: Open Knowledge International. Rwanda. 2016. Public Expenditure and Financial Accountability (PEFA) Assessment 2015 . Kigali, Rwanda: Government of Rwanda. ———. 2017. Public Expenditure and Financial Accountability (PEFA) Assessment 2016. Kigali, Rwanda: Government of Rwanda. Rwanda, MINECOFIN (Ministry of Finance and Economic Planning). 2013. The National Budget: A Citizen’s Guide 2013–2014. Kigali, Rwanda: MINECOFIN. ———. 2014. “2014–2015 Earmarked Transfers: Guidelines to Decentralized Entities.” Kigali, Rwanda: MINECOFIN. ———. 2015a. “2015–2016 Earmarked Transfers: Guidelines to Decentralized Entities.” Kigali, Rwanda: MINECOFIN. ———. 2015b. “The Donor Performance Assessment Framework (DPAF) for FY 2013/14.” Kigali, Rwanda: MINECOFIN. ———. 2016. 2016–2017 Earmarked Transfers: Guidelines to Decentralized Entities. Kigali, Rwanda: MINECOFIN. ———. 2017. 2017–2018 Earmarked Transfers: Guidelines to Decentralized Entities. Kigali, Rwanda: MINECOFIN. RDB (Rwanda Development Bank). 2017. Doing Business Reforms: Dealing with Construction Permits. Kigali, Rwanda: RDB. RGB (Rwanda Governance Board). 2013. Rwanda Media Barometer 2013. Kigali, Rwanda: RGB. 27 ———. 2014. Rwanda Citizens Report Card 2014. Kigali, Rwanda: RGB. ———. 2015. Rwanda Citizens Report Card Survey 2015. Kigali, Rwanda: RGB. ———. 2016a. Rwanda Citizens Report Card 2016. Kigali, Rwanda: RGB. ———. 2016b. Rwanda Media Barometer 2016. Kigali, Rwanda: RGB. ———. 2016c. Rwanda Scorecard 2016. Kigali, Rwanda: RGB. Transparency International Rwanda. 2012. Rwanda Public Expenditure Tracking Survey in Education (9YBE). Kigali, Rwanda: Transparency International Rwanda. World Bank. 2008. Rwanda—Country Assistance Strategy, FY09–FY12. Washington, DC: World Bank. ———. 2010. “Rwanda—Technical Assistance for Public Expenditure Management. Public Expenditure Review.” Policy Note 54811 -RW, World Bank, Washington, DC. ———. 2013a. “Rwanda—Quality of Decentralized Service Delivery Support Development Policy Operation.” Program Document, Report 76078-RW, World Bank, Washington, DC. ———. 2013b. Rwanda Economic Update, May 2013: Maintaining Momentum with a Special Focus on Rwanda’s Pathway out of Poverty. Washington, DC: World Bank. ———. 2014a. Rwanda—Country Partnership Strategy FY14–18. Washington, DC: World Bank. ———. 2014b. “Rwanda—Public Sector Governance Program-for-Results.” Program Document, Report 91140-RW, World Bank, Washington, DC. ———. 2014c. “Rwanda—Quality of Decentralized Service Delivery Support Development Policy Operation.” Implementation Completion and Results Report ICR00003230, World Bank, Washington, DC. ———. 2015a. Rwanda Economic Update June 2015: Financing Development. Washington, DC: World Bank. ———. 2015b. “Rwanda—Quality of Decentralized Service Delivery Support Development Policy Operation.” Independent Evaluation Group, Implementation Completion and Results Report Review ICRR14789, World Bank, Washington, DC. ———. 2018a. “Rwanda—Public Sector Governance Program-for-Results.” Implementation Status and Results Report 6, World Bank, Washington, DC. ———. 2018b. Rwanda—Country Program Evaluation, FY09–17. Independent Evaluation Group. Washington, DC: World Bank. 28 1 Data according to the Third Integrated Household Living Conditions Survey (Enquête Intégrale sur les Conditions de Vie des Ménages): Integrated Household Living Conditions Survey III. 2 It is the successor to Economic Development and Poverty Reduction Strategy (EDPRS) 1 (2008– 12). 3 See Quality of Decentralized Service Delivery Support Development Policy Operation, Implementation Completion and Results Report, page 1. 4 After 2015, the decentralization implementation plan was integrated into EDPRS 2 to harmonize the strategy cycle. The Governance and Decentralization Sector Strategic Plan 2013/14–2017/18 has been developed and implemented to achieve the strategic objectives of the EDPRS 2. 5 Local service delivery and policy implementation are also conducted by agencies that deploy agents at the local level to perform technical tasks. 6 Three main channels of intergovernmental transfer are (i) block transfers; (ii) earmarked transfers; and (iii) development transfers. 7 The Fiscal and Financial Decentralization Policy was adopted in 2001 and revised in 2006 and 2011 and has been implemented along with the Fiscal Decentralization Strategy. The Public Financial Management Reform Strategy (2008–12) and Public Financial Management Sector Strategic Plan (2013–18) also prioritized support for fiscal decentralization and the development of human resources and capacity building in public financial management. The fiscal transfer mechanisms have evolved to increasingly support local autonomy. No interentity transfers (sector-specific transfers from line ministries to implement particular programs) have been allowed since the beginning of FY12/13. Local governments are responsible for planning and spending prudently the resources they receive from the central government. 8 Proceeding with the planned Poverty Reduction Support Financing 9, a large general budget support operation, would not have mobilized sufficient support from shareholders. There was intensive discussion with key shareholders and other stakeholders that eventually resulted in consensus around a development policy operation (DPO) in support of decentralized service delivery. 9 Rwanda experienced a 60 percent reduction in planned budget support. As a result, the current account deficit widened from 7.3 percent in 2011 to 10.4 percent in 2012. This led to a 30 percent decline in international reserves (World Bank 2013a, para. 61). 10 See the detailed analysis in Rwanda Economic Update, May 2013 (World Bank 2013b). 11 The previous operations include the Decentralization and Community Development Project (implemented during FY04–FY11), Public Sector Capacity Building Technical Assistance, FY05 – FY12), and Poverty Reduction Support Grant/Financing (PRSG/F IV-VII, FY08–11; Poverty Reduction Support Financing VIII, FY12), and complemented the agenda supported by other World Bank operations, which relied heavily on decentralized delivery mechanisms. 12 Although the Banque Nationale du Rwanda kept the policy interest rate unchanged (7.5 percent) throughout the second half of 2012, treasury bill rates rose from 9.3 percent to 12.4 percent at the end of 2012, as the government turned to domestic borrowing to fill the budget financing gap caused by the aid shortfall. Rwanda’s real effective exchange rate had depreciated by 2.0 percent as of December 2012, compared with an appreciation of 0.7 percent in 2011. 29 Rwanda had a smaller buffer of foreign reserves (covering around 3.2 months of imports as of February 2013) compared with about 5 months of imports in the previous year. 13 The project document (p. 26) outlines the four top priority areas to improve administrative capacity for the delivery of quality service by local government: human resource management, planning, monitoring and evaluation, and PFM. Although human resource management is dealt with under policy area (i), policy area (ii) tracked improvements in PFM resulting from strengthening PFM systems and capacity at the subnational level (World Bank 2014b, 15). The results framework and the Implementation Completion and Results Report focus in the context of PFM. 14 The budget process begins with the identification of the priorities by citizens at the village level. Citizens come together at the village level to discuss their medium- and long-term priorities, which are advanced for consideration during budget formulation. The agreed list of priorities is discussed by the councilors at the sector and district levels to determine the consolidated priorities that will form the district development plan. The district priorities outlined in the district development plans are linked to sector priorities at the national level (MINECOFIN 2013). 15 The government developed in close collaboration with development partners, including the World Bank, a results and performance framework integrated into the planning and budgeting processes for monitoring the EDPRS. The integrated result framework and monitoring system had three components: (i) a National Results and Policy Matrix, (ii) a Common Performance Assessment Framework, and (iii) a Donor Performance Assessment Framework. The common framework, which came into being in 2009, was agreed between the government and development partners as a basis for monitoring reform implementation around general budget support from donors. The Common Performance Assessment Framework was discontinued after 2012 and replaced by the M&E of the EDPRS. The aim of the Donor Performance Assessment Framework was to review the performance of development partners against a set of indicators of the quality and volume of aid. 16 A detailed operation description (World Bank 2013a, paras. 19–31) summarized the results chain, with the development objectives plausibly linked with outcomes, results, activities, and prior actions. 17 Financial management is not an end in itself but rather a tool to assist a government to deliver services to its citizens. The policy action, by improving local government compliance with PFM laws and procedures, would ultimately improve the efficiency and effectiveness of public funds; thereby ensuring decentralized entities provide better services for a given budget (Rwanda 2016). 18 The regular production of the Citizen Report Card, an annual publication of the Rwanda Governance Board (RGB), were intended to capture significant dissatisfaction. 19 Depth captures the extent to which in and of itself a measure brings about material changes in the institutional environment. The concept is from an IMF Independent Evaluation Office (2007) paper on structural conditionality. 20 World Bank technical assistance directed at local governments, although potentially useful in strengthening technical capacity at the district level, would not have been able to deliver the combination of support for policy reforms and needed financing. 30 21 The substantial rating for relevance of design represents an upgrading relative to the ICR Review’s rating of modest. The upgrading is based largely on the appropriateness of the choice of instrument, given the country context and the status of the World Bank Group program (new strategy under preparation to define the next phase of support) at the time. In addition, interviews during the mission clarified that monitoring of the macrofiscal framework, previously considered a weakness in the operation, was provided for through Advisory Service and Analytics and policy dialogue, including close consultation and collaboration with the IMF. 22 The SMART criteria require indicators to be specific, measurable, achievable, relevant, and time-bound. 23 SWGs and coordination forums have been functioning as the main discussion forums for stakeholders, including relevant government agencies, development partners, civil society organizations, and others. The quality of SWG monitoring and related strategies is reportedly variable, although most stakeholders see significant value in these joint forums. 24 The information is also published on the official website of the Rwanda Revenue Authority. 25 Since 2002, local authorities have been assigned to collect fees, including fees for plot sales, public cleaning services, market fees, and notary charges. However, there are issues with the legal and policy frameworks to promote local service delivery and economic activity. In particular, the framework for local fees and other charges allows decentralized entities to charge a relatively wide range of rates, against a wide range of different fees and charges —some of which have a high “nuisance” value—without a proportionate link to the public service being provided. A legal instrument defining a “closed list” of allowable fees and other charges, with clear maximum allowable rates associated with each one, would help address this issue (World Bank 2013a). 26 The World Bank Group supported the implementation of a new online construction permit management information system through the Rwanda Investment Climate Reform Program of the International Finance Cooperation. The system has been rolled out in the City of Kigali and select districts and secondary cities. 27 The Implementation Completion and Results Report also reports that technical innovations, including a fiber optic wireless network, helped to reduce the cost of service provision. 28 This information is also available for specific types of services. 29 The Subsidiary Entity Accounting System is a simplified accounting and financial reporting application for entities below the district level, which is connected to the Integrated Financial Management Information System (IFMIS). Both IFMIS and the Subsidiary Entity Accounting System are key features of the PFM system at the subnational level. 30 In addition, other World Bank projects complemented capacity strengthening and system strengthening of public investment management. For example, 247 key staff members in the public and private sectors who are responsible for investment planning and economic and financial analysis were trained through Technical Assistance of Capacity Building in Economic and Financial Analysis to Support the Rwanda Public Investment Program during FY13–14. 31 The guidelines provide terms under which the earmarked outputs are financed and how those funds and resources are allocated, transferred, spent, and accounted for between the parties involved. The guidelines also provide the annual targets and their indicators set by the earmarking budget agencies (ministries) that decentralized entities should report on. 31 32 A Public Expenditure Tracking Survey in Education, conducted by the World Bank through Transparency International Rwanda (2012) reported that “there is no difference between the Capitation Grant provided by the Ministerial order and no leakage between the amount disbursed by the Ministry of Finance and what is received by Districts Schools per pupil and per teacher.” The report also stated, “the lack of leakage is due to the MINECOFIN’s good public expenditure policy of transferring the capitation grant directly to the individual accounts of the school without transitioning through Districts accounts.” 33 The PEFA was not available when the ICR and ICR Review were conducted, owing to changes in the PEFA framework and measurements. The ICR and ICR Review assessed that the program objective was met based on alternative sources of information, such as the rollout of the accounting system and the findings in the two Public Expenditure Tracking Surveys World Bank 2014b, para. 43). 34 Despite the progress, the PEFA 2015 (Rwanda 2016) also indicated challenges, such as “information is available on most central transfers received by primary schools and primary health clinics but none is available with respect to other resources (such as donor funds, many of which are outside these systems)” and “District expenditure reports do not capture resources received in kind.” 35 The Independent Evaluation Group mission conducted interviews with government officials at MINECOFIN and field visits to the district offices in Gatsibo, Bugesera, Musanze, and Rubavu in February 2018. 36 Capacity building and training is a critical factor in the implementation of IFMIS (Harelimana 2017). Success in implementing the IFMIS also relates to a major success factor of the implementation of PFM reform more generally in Rwanda, which is commitment and government ownership at the highest political level, coupled with strong buy-ins from lower- level government, continuous support from development partners, and active participation of civil society organizations (Rwanda 2017). 37 Rwanda has had an Access to Information Law in place since 2013 (Rwanda Governance Board 2016c) and is the 11th African country to do so. According to the 2015 Global Open Data index, Rwanda jumped 30 places in 2015from a ranking of 44th globally in the previous year (Open Knowledge International 2015). 38 The Rwanda Media Barometer is an instrument published by the Rwanda Governance Board, which measures media development in the country from the perceptions and lived experiences of different stakeholders, including ordinary citizens, media practitioners, members of civil society organizations, and business communities. The Barometer also reported that the awareness of the right to information (people believe such a right exists in law and respected in practice) increased from 82 percent in 2013 to 85 percent in 2016. 39 Data after 2013 are not available, as the government has not carried out the relevant survey. The publication of Rwanda Citizens Report Cards provide only data on the perception of citizens’ participation in government programs. 40 The Independent Evaluation Group team attended meetings and dialogue sessions with citizens hosted by local government officials, where both male and female citizens actively participated and expressed their opinions on the government’s plans, service delivery, and challenges. 32 41 In the terminology used in Rwanda, a “qualified”—in effect, minimally qualified—audit report is issued on financial statements if the conclusion of the audit is that “except for the matters raised, proper books of account have been maintained and the financial statements do give a true and fair view of the state” based on the opinion of the Auditor General ( World Bank 2013a; Office of the Auditor General 2012). On the other hand, an “unqualified” audit opinion implies that financial statements presented are a true and fair reflection of the transactions of the entity audited and that such transactions were in all material respects executed in accordance with the relevant laws and regulations (Office of the Auditor General 2012). An “adverse” opinion is the worst type of professional opinion issued by an auditor, indicating that financial statements are misrepresented, misstated, and do not accurately reflect an entity’s financial performance and health. 42 At the time of ICR preparation the Annual Report of the Office of Audit General had not been presented to the parliament, and therefore no formal assessment of fiduciary accountability compliance of districts was available, although the ICR indicates that three districts received “qualified” audit opinion (ICR Review). 43 All 30 districts received a “modified” audit opinion for their financial statements from the Office of the Auditor General in 2015. A “modified” audit opinion here is considered interchangeable with a “qualified” audit opinion. 44 The Donor Performance Assessment Framework for FY13/14 cites strong and predictable disbursements by the World Bank as compared with other development partners, as well as progress in the World Bank’s performance in supporting key sectors and in using country PFM systems (MINECOFIN 2015b). 45 With participation of other key development partners, including the government of Belgium, United Nations Development Programme, the Netherlands, and the European Union. 33 Appendix A. Basic Data Sheet Quality of Decentralized Service Delivery Support Development (IDA H8530) Table A.1. Key Project Data Actual or Current Actual as Percent Appraisal Estimate Estimate of Appraisal Financing ($, millions) ($, millions) Estimate Total project costs 50.0 46.5 93 Loan amount 50.0 46.5 93 Cofinancing — — — Cancellation 50.0 46.5 93 Table A.2. Cumulative Estimated and Actual Disbursements Disbursements FY13 Appraisal estimate ($, millions) 50.0 Actual ($, millions) 46.5 Actual as percent of appraisal 93 Date of final disbursement 50.0 Table A.3. Project Dates Event Original Actual Initiating memorandum 03/08/2013 03/08/2013 Negotiations 04/12/2013 04/12/2013 Board approval 05/14/2013 05/14/2013 Signing 05/21/2013 05/21/2013 Effectiveness 06/04/2013 06/04/2013 Closing date 06/30/2014 06/30/2014 35 Table A.4. Staff Time and Cost World Bank Budget Only Staff time Costa Stage of Project Cycle (no. weeks) ($, thousands) Lending FY13 19.87 111,887 FY14 0 0 Total 19.87 111,887 Supervision or ICR FY13 0 0 FY14 4.77 36,431 FY15 5.21 37,932 Total 9.98 74,363 Note: ICR = Implementation Completion and Results Report. a. Including travel and consultant costs. 36 Table A.5. Task Team Members Responsibility or Name Title a Unit Specialty Lending Yoichiro Ishihara Senior Economist AFTP2 Task Team Leader Tessa MacArthur Senior Governance Specialist AFTP2 Co-Task Team Leader Alex Kamurase Senior Social Protection Specialist AFTSE Co-Task Team Leader Wolfgang Fengler Lead Economist AFTP2 Peace Niyibizi Economist AFTP2 Geoff Handley Consultant AFTP2 Winston Percy Onipede Senior Financial Management AFTME Cole Specialist Toru Nishiuchi Consultant AFTP2 Nightingale Rukuba-Ngaiza Senior Counsel LEGAM Hassine Hedda Financial Officer CTRLA Tom Bundervoet Extended Term Consultant AFTP2 Marco Hernandez Economist AFTP1 Paolo Zacchia Lead Economist AFTP2 Birgit Hansl Senior Economist ECSP2 Peer reviewer Khwima Nthara Senior Economist EASPT Peer reviewer Yasuhiko Matsuda Senior Public Sector Specialist EASPW Peer reviewer Supervision/ICR Yoichiro Ishihara Senior Economist AFTP2 Task Team Leader Leif Jensen Senior Public Sector Specialist GGO ICR Team Leader Peace Aimee Niyibizi Consultant AFTP2 Note: ICR = Implementation Completion and Results Report. a. At time of appraisal and closure, respectively. 37 Appendix B. Statistics and Key Indicators Figure B.1. Worldwide Governance Indicators (percentile rank) 80 70 Percentile rank 60 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year Government Effectiveness Control of Corruption Voice and Accountability Source: World Governance Indicator. Note: Percentile rank indicates the country's rank among all countries covered by the aggregate indicator, with 0 corresponding to lowest rank and 100 to highest rank. Figure B.2. The Institutional Structure of Decentralization in Rwanda Source: Chemouni 2014. 38 Table B.1. Selected Social and Economic Indicators LIC LMIC average average Indicators FY94 FY00/01 FY05/06 FY10/11 FY13/14 FY13/14 FY13/14 Poverty and inequality National poverty — 58.9 56.7 44.9 39.1 — — headcount ratio (percent) National extreme — 40 35.8 24.1 16.3 — — poverty headcount ratio (percent) Gini coefficient — 0.51 0.52 0.49 0.45 — — Health Immunization, 25 69 95 95 97 76.7 79.1 measles (percent of children ages 12–23 months) Births attended by — 92 96 98 99 55.9 71.5 skilled health staffs Maternal mortality — 1,071 750 476 210 513 260 ratio (per 100,000 live births) Mortality rate under — 196 152 76 50 78.9 54.5 5 (per 1,000 live births) Life expectancy 28.6 48.2 56.4 62.2 64.0 61.3 67.2 Education Net attendance ratio — — 10.4 17.8 23 — — – secondary (percent) Infrastructure (percent population with access) Improved sanitation — — 58.5 74.5 83.4 27.9 51.6 Improved water — — 70.3 74.2 84.8 65.1 88.5 source Electricity as main — — 4.3 10.8 19.8 28.3 79.5 source of lighting Road — — 85.8 — — — — Sources: Rwanda Integrated Household Living Conditions Survey EICV1, EICV2, EICV3, EICV4; and World Bank, World Development Indicators database. Note: — = not available; EICV = Integrated Household Living Conditions Survey; LIC = low-income country; LMIC = lower- middle-income country. 39 Table B.2. Poverty Headcount Ratio and Access to Services in FY10/11 Population Population Accessing Population Accessing Poverty District Accessing Sector Headcount Hospital Health Centers Administration District Ratio (percent) (percent) (percent) (percent) Highest district 73.3 84.1 99.0 97.5 Lowest district 8.3 3.2 31.9 5.6 Average 44.9 37.8 81.1 58.2 Source: Rwanda Integrated Household Living Conditions Survey Integrated Household Living Conditions Survey III. Table B.3. The Evolution of the Institutional Framework of Decentralization in Rwanda Years 2001–06 Since 2006 Entities (no.) (no.) Provinces 11 4 Kigali City 1 1 Districts 106 30 Sectors 15,485 450 Cells 9,165 2,148 Villages (Umudugudu) — 14,744 Source: Chemouni 2014. Note: — = not available. Table B.4. International Monetary Fund Programs: Financial Arrangements and Policy Support Disbursement Completion Amount / Amount or Approved Drawn Date of Expiration (SDR, (SDR, Financial Arrangement Arrangement Date millions) millions) Poverty Reduction and Growth Facilities Aug. 12, 2002 Jun. 11, 2006 4.00 4.00 Poverty Reduction and Growth Facilities Jun. 12, 2006 Aug. 7, 2009 8.01 8.01 Policy Support Instrument (three years) Jun. 2010 Dec. 2013 — — Policy Support Instrument (three years) Dec. 2013 2017 — — Standby Credit Facility Jun. 8, 2016 Jan. 31, 2018 144.18 144.18 Sources: International Monetary Fund and World Bank. Note: — = not available; SDR = special drawing rights. 40 Table B.5. District Budget by Sources and National Budget FY09/ FY10/ FY11/ FY12/ FY13/ FY14/ FY15/ FY16/ FY17/ Budget FY06 FY07 FY08 10 11 12 13 14 15 16 17 18 District own revenues 13.9 15.3 18.6 21.6 29 28 30.6 36.9 40.1 45.7 49.9 51.5 (taxes and fees) Transfers from CG 35.8 68.1 107.7 99.6 112.4 189.8 242 246.9 270.7 284.5 304.4 364.9 of which block grant — 2.4 11.3 16.7 20.8 25 28.3 32.1 39.1 42.6 46.8 52.1 External grants 4.8 5.3 11.3 14.3 22.6 37.9 30.2 24.1 28.1 43.7 23.7 Total District Budget 49.7 90.5 143 149.2 176.6 265.4 338.8 346.1 374 400.9 444.7 440.1 (RF, billions) Own Revenues to total 28.0 16.9 13.0 14.5 16.4 10.6 9.0 10.7 10.7 11.4 11.2 11.7 district budget (percent) CG Transfers to total 72.0 75.2 75.3 66.8 63.6 71.5 71.4 71.3 72.4 71.0 68.5 82.9 district budget (percent) CG Transfers to total 9.0 12.9 16.0 11.1 11.4 17.0 15.6 14.7 15.4 15.7 15.6 17.4 national budget (percent) Total domestic taxes 176.7 214.6 275.3 368 449.1 501.4 641.2 775.4 906.5 894.8 1,071.6 1,200.3 Total national budget 396.1 527.6 674 899 984 1,116.9 1,549.9 1,677.7 1,753.3 1,808.3 1,949.4 2,094.9 Source: Ministry of Finance and Economic Planning. Note: — = not available; CG = central government. 41 Table B.6. Budget of Four Select Districts by Sources (RF, billions) Changes 2010/11– District 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2017/18 Bugesera District total budget 11.1 8.3 9.7 10.4 12.1 13.2 13.6 16.8 1.5 01. Block Grant (districts) 0.8 1.0 1.1 1.2 1.5 1.6 1.6 1.9 2.4 02. Earmarked Transfers (districts) 2.5 5.6 6.4 6.6 7.9 8.1 8.8 11.7 4.6 03. Own Revenues (taxes and fees) 0.5 0.5 0.7 1.5 1.3 1.4 1.5 2.0 4.3 05. Transfers from other government 5.6 1.0 0.7 0.9 0.4 1.0 0.5 0.3 0.1 agencies 08. External Grants 1.7 0.2 0.7 0.3 1.1 1.1 1.1 0.9 0.5 Gatsibo District total budget 11.3 7.0 9.8 9.8 11.6 13.4 13.1 14.1 1.3 01. Block grant (Districts) 0.8 1.0 1.1 1.2 1.5 1.6 1.7 2.0 2.4 02. Earmarked transfers (Districts) 3.2 5.0 6.7 6.9 8.1 9.6 9.1 10.3 3.2 03. Own revenues (taxes and fees) 0.4 0.4 0.5 0.6 0.7 0.8 0.9 0.9 2.3 05. Transfers from other government 6.7 0.6 0.7 0.3 0.4 0.2 0.1 0.0 0.0 agencies 08. External grants 0.1 0.0 0.8 0.7 0.9 1.1 1.3 1.0 7.9 Rubavu District total budget 7.9 8.8 11.2 10.6 13.2 14.1 15.8 18.4 2.3 01. Block grant (Districts) 0.7 0.8 1.0 1.0 1.3 1.4 1.5 1.8 2.5 02. Earmarked transfers (Districts) 3.3 5.5 7.1 5.7 8.2 9.2 9.9 10.7 3.3 03. Own revenues (taxes and fees) 0.6 0.8 1.2 1.6 1.7 2.2 1.8 2.0 3.2 05. Transfers from other government 2.8 0.6 1.1 1.8 1.3 0.3 0.0 3.2 1.1 agencies 08. External grants 0.5 1.1 0.9 0.5 0.7 0.9 2.6 0.8 1.6 42 Changes 2010/11– District 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2017/18 Musanze District total budget 8.0 10.6 12.3 10.2 12.4 15.9 15.3 17.4 2.2 01. Block grant (Districts) 0.8 1.0 0.9 1.0 1.3 1.4 1.6 1.9 2.3 02. Earmarked transfers (Districts) 3.5 5.0 7.1 6.5 6.8 9.1 8.2 8.7 2.5 03. Own revenues (taxes and fees) 0.3 1.2 1.4 1.5 1.9 1.4 1.5 1.7 5.6 05. Transfers from other government 2.2 1.9 2.1 0.5 1.5 3.1 1.6 4.5 2.0 agencies 08. External grants 1.2 1.4 0.8 0.7 0.8 0.8 2.3 0.6 0.5 Source: Ministry of Finance and Economic Planning. Table B.7. Rwanda Scores on Public Expenditure and Financial Accountability (PEFA) Changes PEFA Indicators 2007 2010 2015 2010–15 A. Public financial management out-turns: Credibility of the budget PI-I Aggregate expenditure out-turn compared with original approved budget B A B Decline PI-2 Composition of expenditure out-turn compared with original approved budget D D B+ PI Changed PI-3 Aggregate revenue out-turn compared with original approved budget A A B PI Changed PI-4 Stock and monitoring of expenditure payment arrears D+ B B+ Improvement B. Key Cross-Cutting Issues: Comprehensiveness and Transparency PI-5 Classification of the budget A A A No Change PI-6 Comprehensiveness of information included in budget documentation D A A No Change PI-7 Extent of unreported government operations D+ D+ B+ Improvement PI-8 Transparency of intergovernmental fiscal relations B A A No Change PI-9 Oversight of aggregate fiscal risk from other public sector entities D+ C C+ Improvement PI-10 Public access to key fiscal information C A B Decline 43 Changes PEFA Indicators 2007 2010 2015 2010–15 C. Budget cycle C. (i) Policy-based budgeting PI-11 Orderliness and participation in the annual budget process B+ B+ A Improvement PI-12 Multiyear perspective in fiscal planning, expenditure policy, and C+ C+ B+ Improvement budgeting C. (ii) Predictability and Control in Budget Execution PI-13 Transparency of taxpayer obligation and liabilities A A A No Change PI-14 Effectiveness of measures for taxpayer registration and tax assessment B+ A A No Change PI-15 Effectiveness in collection of tax payments D+ D+ D+ No Change PI-16 Predictability in the availability of funds for commitment of B+ B+ B+ No Change expenditures PI-17 Recording and management of cash balances, debt, and guarantees B B A Improvement PI-18 Effectiveness of payroll controls D+ B+ B+ No Change PI-19 Competition, value for money, and controls in procurement B A B+ PI Changed PI-20 Effectiveness of internal control for nonsalary expenditure D+ B+ B+ No Change PI-21 Effectiveness of internal audit C+ C C+ Improvement C. (iii) Accounting, recording, and reporting PI-22 Timeliness and regularity of accounts reconciliation B+ B A Improvement PI-23 Availability of information on resources received by service delivery D D C Improvement units PI-24 Quality and timeliness of in-year budget reports D+ D+ D+ No Change PI-25 Quality and timeliness of annual financial statements C+ D+ C+ Improvement C. (iv) External Scrutiny and Audit PI-26 Scope, nature and follow-up of external audit D+ B+ B+ No Change 44 Changes PEFA Indicators 2007 2010 2015 2010–15 PI-27 Legislative scrutiny of the annual budget law C+ C+ C+ No Change PI-28 Legislative scrutiny of external audit reports D+ B C+ Decline D. Donor Practices D-1 Predictability of Direct Budget Support B+ A A No Change D-2 Financial information provided by donors for budgeting and reporting D D+ D+ No Change on project/program aid D-3 Proportion of aid that is managed by use of national procedures D D C Improvement Sources: Rwanda 2010 and 2016. 45 Table B.8. Key Economic Indicators Indicator FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 GDP growth (percent) 6.3 7.3 7.8 8.8 4.7 7.6 8.9 5.9 6.2 Inflation (percent) 10.3 2.3 5.7 6.3 4.2 1.8 2.5 5.7 7.1 General government revenue (percent of GDP) 23.8 24.6 25.3 23.2 25.5 24.2 24.7 23.7 22.1 of which: grants — 13.3 10.8 9.3 8.6 7.4 6.4 5.1 4.9 General government total expenditure (percent of 23.5 25.3 26.2 25.7 26.8 28.3 27.5 26 24 GDP) Fiscal balance (percent of GDP) 0.3 −0.7 −0.9 −2.5 −1.3 −4 −2.8 −2.3 −1.9 General government gross debt (percent of GDP) 19.5 20 19.9 20 26.7 29.1 33.4 37.6 40.2 Exports of goods and services (percent of GDP) 11.7 12 13.8 12.8 14.1 14.7 14.3 15 — Imports of goods and services (percent of GDP) 29.7 30 30.6 31.9 31.9 32.9 35.1 33.2 — Current account balance (percent of GDP) −7 −7.2 −7.4 −11.2 −8.7 −11.8 −13.4 −14.4 −10.2 FDI, net inflows (percent of GDP) 2.2 4.3 1.8 3.5 3.4 3.9 2.7 3 — Net ODA received (percent of GNI) 17.5 18.0 19.6 12.2 14.5 13.2 13.5 14.1 — ODA disbursement from all countries 934 1,033 1,263 879 1,086 1,035 1,085 1,148 — IDA net disbursement 144 165 213 151 135 200 230 268 268 Share of IDA to ODA disbursement (percent) 15 16 17 17 12 19 21 23 — GDP, current prices ($, billions) 5.4 5.8 6.5 7.3 7.6 8 8.3 8.4 8.9 GDP per capita ($) 554.6 577.4 636.4 696.7 709.7 728.1 732.4 729.1 754.1 Population (millions) 9.7 10 10.2 10.5 10.7 11 11.3 11.5 11.8 Total reserves in months of imports — 5.7 5.6 4.1 5.0 4.5 3.9 4.0 — CPIA economic management index 3.8 3.8 3.8 3.8 3.8 4.0 4.0 4.0 — IDA resource allocation index 3.5 3.7 3.6 3.6 3.6 3.6 3.7 3.7 — Official exchange rate (LCU per $, period average) 568 583 600 614 647 682 721 787 832 Sources: International Monetary Fund, World Economic Outlook database; Organisation for Economic Co-operation and Development statistics; Rwandan authorities; and World Bank, World Development Indicators database. Note: CPIA = Country Policy and Institutional Assessment; FDI = foreign direct investment; GNI = gross national income. 46 Table B.9. Progress Made on Millennium Development Goals (Select Targets) Millennium Development Goal 1994 2000 2008 2012 2015 Goal 1: Eradicate extreme poverty and hunger Poverty headcount ratio at $1.90 a day (2011 purchasing — 77.0 60.3 60.4 — power parity) (percent of population) Income share held by lowest 20 percent — 5.2 5.1 5.2 — Prevalence of undernourishment (percent of population) 58 61 43 34 32 Goal 2: Achieve universal primary education Primary school enrollment rate (net, percent of relevant — 79 99 96 95 age group) Primary completion rate, total (percent of relevant age — 23 52 69 61 group) Literacy rate, youth male (percent of males ages 15–24) — 79 77 81 83 Literacy rate, youth female (percent of females ages 15– — 77 78 83 87 24) Goal 3: Promote gender equality and empower women School enrollment, primary and secondary (gross), — 0.9 1.0 1.0 1.0 gender parity index Proportion of seats held by women in national — 26 56 56 64 parliaments (percent) Women employed in the nonagricultural sector (percent 32 33 — 34 — of nonagricultural employment) Goal 4: Reduce child mortality Immunization, measles (percent of children ages 12—23 25 74 92 97 97 months) Mortality rate, infant (per 1,000 live births) 300 184 78 52 42 Mortality rate, under-5 (per 1,000 live births) 132 109 52 37 31 Goal 5: Improve maternal health Maternal mortality ratio (modeled estimate, per 100,000 1,270 1,020 452 336 290 live births) Adolescent fertility rate (births per 1,000 women ages 56 49 38 30 26 15—19) Births attended by skilled health staff (percent of total) — 31 52 69 91 Contraceptive prevalence, any methods (percent of 14 13 36 52 53 women ages 15—49) Goal 6: Combat HIV/AIDS, malaria, and other diseases Prevalence of HIV, total (percent of population ages 15— 6.3 4.9 3.2 3.1 2.9 49) Incidence of tuberculosis (per 100,000 people) — 98 96 76 56 Tuberculosis case detection rate (percent, all forms) — 78 82 75 84 47 Millennium Development Goal 1994 2000 2008 2012 2015 Goal 7: Ensure environmental sustainability Access to an improved water source (percent of 62 66 72 74 76 population) Access to improved sanitation facilities (percent of 39 47 55 59 62 population) Forest area (percent of land area) 13 14 17 19 19 Goal 8: Develop a global partnership for development Fixed telephone subscriptions (per 100 people) 0.2 0.2 0.2 0.4 0.1 Mobile cellular subscriptions (per 100 people) 0.0 0.5 13 50 70 Internet users (per 100 people) 0.001 0.1 5 8 18 Source: World Bank. Note: Figures in italics are for years other than specified. — = not available. References Chemouni. B. 2014. “Explaining the Design of the Rwandan Decentralization: Elite Vulnerability and the Territorial Repartition of Power.” Journal of Eastern African Studies 8 (2): 246–62. Rwanda. 2010. Public Financial Management Performance Report 2010. Kigali, Rwanda: Government of Rwanda. ———. 2016. Public Expenditure and Financial Accountability (PEFA) Assessment 2015. Kigali, Rwanda: Government of Rwanda. 48 Appendix C. Policy Matrix Table C.1. Rwanda QDS DPO: Description of Actions and Key Outcome Indicators by Policy Areas Prior Action Description of Action Outcome Indicator Baseline Target Actual (2013/14) Policy Area 1: Strengthened Policy Framework for Decentralization 1) The recipient has approved Adopting local Percentage of staff 0% (2012/13) 70% 79.2%. Target surpassed. a new decentralization policy government structures positions filled in revised which clarifies the roles and with clear roles, issuing organizational structures responsibilities of central and prime ministerial local government instructions on sectoral 2) The recipient has published decentralization Fees and charges RF 134 million 12% Target surpassed. Collections increased from in the Official Gazette the collected by districts (2012) increase RF 13.9 billion in 2012 (calendar year) to Presidential Order establishing from the RF18.5 billion in 2013/14 (fiscal year). Baseline the list of fees and other program adjusted, based on the district’s financial charges levied by baseline reports audited by the Office of the Auditor decentralized entities and the General. applicable thresholds Policy Area 2: Capacity Development for Quality Service Delivery by Local Governments 3) The recipient has adopted Elaborating and PEFA PI-23 (availability D (2010) C PEFA assessment was delayed because of twenty-eight (28) district implementing five-year of information on changes in PEFA framework and capacity building plans district capacity building resource received by measurements. Considered significant PFM approved by the district plans service delivery unit) capacity building; a new earmarked transfer councils framework for service delivery units in place; and two PETS, the ICR assessed that the upcoming PEFA assessment would result in a “C” rating. Policy Area 3: Improving Government Accountability and Transparency to Citizens 4) The recipient has published Building the capacity of Citizens who participate 11% 20% 29% – Target surpassed. in the Official Gazette a new civil society organizations in the district budgetary (10%) (19%) (52%) – Target surpassed. Access to Information Law to engage in policy process (of which, (2010) (2013) which provides for the public’s formulation, and women) (percent) 49 Prior Action Description of Action Outcome Indicator Baseline Target Actual (2013/14) right to information (Access to increasing access to Citizens who participate 24% 30% 72% – Target surpassed. Information Law was Gazetted information on district in the formulation of (22%) (28%) (52%) – Target surpassed. in March 2013) development priorities, Imihigo activities (of (2010) (2013) budget, and service which, women) (percent) delivery charters Policy Area 4: Enhanced Local Government Fiduciary Accountability 5) The recipient has reviewed Improving fiduciary The number of districts 0 5 districts The ICR assessed that the program objective 25 district audit committee accountability through with qualified audit (2011/12) (17%) was substantially achieved. The outcome reports of 2012 and issued the subnational PFM targets for 2013/14 had been evaluated by the communication to the districts system at and below the Office of the Auditor General in March 2015. on the main areas for follow- district level covering With three districts achieving “qualified up (By Dec. 2012, 25 district subsidiary entities opinion” in 2012/13, in combination with the audit committees had held including schools and activities undertaken by the government, the quarterly meetings and health centers districts were on track to achieving the reported to their respective outcome targets in 2013/14. district councils) Sources: World Bank 2014a, 2014b, and 2015. Note: ICR = Implementation Completion and Results Report; PEFA = Public Expenditure and Financial Accountability; PETS = Public Expenditure Tracking Surveys; PFM = public financial management. References World Bank. 2014a. “Rwanda—Public Sector Governance Program-for-Results.” Program Document, Report 91140-RW, World Bank, Washington, DC. ———. 2014b. “Rwanda—Quality of Decentralized Service Delivery Support Development Policy Operation.” Implementation Completion and Results Report ICR00003230, World Bank, Washington, DC. ———. 2015. “Rwanda—Quality of Decentralized Service Delivery Support Development Policy Operation.” Independent Evaluation Group, Implementation Completion and Results Report Review ICRR14789, World Bank, Washington, DC. 50 Appendix D. List of Persons Met World Bank Yasser El-Gammal Country Manager Diarietou Gaye Country Director Carolyn Turk Former Country Manager Yoichiro Ishihara Senior Economist – Macro Economics & Fiscal Management Aghassi Mkrtchyan Senior Economist – Macroeconomics, Trade and Investment Jens Kristensen Lead Public Sector Specialist – Governance Department Leif Jensen Former Senior Public Sector Specialist – Governance Department Kene Ezemenari Senior Economist – Operations Policy & Country Services Vice President, Knowledge & Learning Department Sandeep Mahajan Lead Economist – Macroeconomics & Fiscal Management Department Adja Mansora Dahourou Senior Private Sector Specialist – Finance, Competitiveness and Innovation Lucy M. Fye Former Private Sector Development Specialist Alex Kamurase Senior Social Protection Specialist – Social Protection & Labor Government Kampeta Sayingzoga Former Permanent Secretary, Ministry of Finance and Economic Planning Director General, National Industrial Research and Development Agency Jonathan Nzayikorera Director for Fiscal Decentralization, Ministry of Finance and Economic Planning Rehemah Namutebi Head of National Budget, Ministry of Finance and Economic Planning Gerald Mugabe External Resources Mobilization Officer, Ministry of Finance and Economic Planning Amina Rwakunda, Senior Economist of Macro Economic Policy Division, Ministry of Finance and Economic Planning Eric Rwigamba Director General, Financial Sector Development Directorate, Ministry of Finance and Economic Planning Biraro Obadiah Auditor General, Office of the Auditor General Saidi Sibomana Deputy Director General, Local Administrative Entities Development Agency, Ministry of Local Government Justine Gatsinzi Deputy Director General Local Administrative Entities Development Agency, Ministry of Local Government Benjamin Adviser to Mayor Director of Social Affairs, Ministry of Local Government, Ministry of Local Government Adolphe Bazatoha Shyaka Head of Economic and Commerce Commission (Former National Coordinator of the Decentralization and Community Development Project) 51 Celestin Sibomana Director of Capacity Development, Rwanda Public Procurement Authority Pascal Ruganintwali Deputy Commissioner General, Rwanda Revenue Authority Peace Uwase Director General, National Bank of Rwanda Kevin Kavugizo Shyamba Director, National Bank of Rwanda Edward Kalisa Secretary General, Rwanda Governance Board Egide Rugamba Secretary General, General, Rwanda Association of Local Government Authorities Winifrida Deputy Secretary General, Rwanda Association of Local Government Mpembyemungu, Authorities Emmanuel Hategeka Chief Operating Officer, Rwanda Development Board Local Government Pascal Nyamulinda Mayor, Kigali Urban Upgrading Project; City of Kigali, Rwanda Abias Phillipe Mumuhire Coordinator, City of Kigali, Rwanda Peter Claver Bagirishya Executive Secretary, Musanze District, Rwanda Sylvain Nsabimana, Executive Secretary, Rubavu District, Rwanda Emmanuel Nsanzumuhire Mayor of Bugesera District, Rwanda Emmanuel Nzabonimpa Manager, Corporate Service Division, Gatsibo District, Rwanda Bilateral and Multilateral Donors Minister Counsellor, Head of Cooperation/Senior Expert, European Johan Cauwenbergh Union Sion Morton Program Officer, Economics and Governance, European Union Martha Phiri African Development Bank Alun Thomas Resident Representative, International Monetary Fund (IMF) Laure Redifer IMF Programme Director, Decentralization and Good Governance, German Ulrich Berdelmann Agency for International Cooperation Civil Societies and Other Development Partners Appolinaire Mupiganyi Executive Director, Transparency International Rwanda Derek Appel Country Economist, International Growth Centre Alex Rutabingwa National expert on fiscal decentralization 52