Economic Growth
Officially titled “Expanded Economic Opportunities in Rural Areas,” the rural economic growth program (EG) is currently funded by USAID at approximately $15 million annually, which includes more than $11 million in food aid. The goals of the program are to expand the adoption of improved agricultural and business practices, increase accessibility to rural financing, improve Rwanda’s rural infrastructure, and provide food assistance to the most vulnerable, including orphans, people living with HIV/AIDS, the elderly, street children, and the handicapped.
Specialty Agribusiness
USAID committed $10 million over six years to help develop Rwanda’s specialty coffee industry, which has grown from an export revenue of zero dollars in 2002, to $8.5 million in 2006. Now USAID is renewing its commitment to specialty agribusiness with another five-year, $6 million project. “Sustaining Partnerships to enhance Rural Enterprise and Agribusiness Development” (SPREAD), implemented by Texas A&M University in cooperation with the National University of Rwanda and other partners, is focusing on value chain management, starting with improving the quality of all the links in the specialty coffee sub-sector, “from the seed to the cup.” With USAID assistance, farmers’ cooperatives are improving the lives of their members – to the point of developing villages, setting up internet cafés, and establishing coffee washing stations as viable domestic investment opportunities.
Farmers’ cooperatives are also key to USAID’s work in the development of the essential oils sub-sector, which currently is focusing on geranium cultivation and oil distillation. Farmers cultivate geranium plants for sale to Ikirezi Natural Products, to export for use in the manufacture of perfume and soap products.
Agribusiness Loans
Millions of dollars are also being made available for farmers and other agribusiness entrepreneurs through the U.S. Development Credit Authority (DCA) program, which is being expanded to encourage Rwandan private banks to lend money to rural agribusinesses. USAID/Rwanda now has agreements with two banks to lend up to US $5.1 million in the Rwandan rural agribusiness sector over three years. As of this writing there have been no defaults, and some short-term loans have already been repaid.
Ecotourism
USAID has a four-year project to develop Nyungwe Forest National Park in cooperation with the National Office of Tourism and National parks. With an exceptional number of plant and wildlife species – including 12 different types of primates – Nyungwe has tremendous potential for attracting tourists. “Destination Nyungwe!” is a joint USAID economic growth and health project, funded at approximately $4 million. In addition to the emphasis on ecotourism, the project includes conserving the forest’s biodiversity, and providing other social benefits in the areas of health and income generation.
Microfinance
USAID/Rwanda’s microfinance has had to revise its fourth year targets, because the third-year ones were exceeded for both savings and outstanding loans. From September 2005 to June 2006, the total number of clients increased by almost 35% to 26,774; the total accumulated savings increased more than 40%; and the total outstanding loan portfolio had more than doubled to more than $900,000, with a lower than targeted default rate. The average loan size also increased from $47 to $74, exceeding the $68 target, as many repeat borrowers with growing businesses took new, larger loans.
Rwanda Knits
In 2006, 16 women’s groups received 700 knitting machines and were trained in basic and advanced knitting techniques. Several of the groups have sourced imported yarn from Kenya to knit sweaters for school students, and one women’s group jointly supported by the Dian Fossey Gorilla fund has secured a US market for sweaters that is expected to generate almost $45,000 in sales.
Dairy
USAID has received an allocation of $1.1 million for dairy activities, and has conducted a fact-finding mission. Currently under consideration is a project that would help Rwandan dairy producers rise from just subsistence levels of production, and assist the Rwandan dairy sector to reach higher levels of competitiveness through improvement of production and marketing.
Food Aid (PL 480 Activities)
No project can have much impact if people are going hungry. Through PL 480, the U.S. law authorizing food assistance, Rwanda receives some $11 million in Title II funds from USAID’s Food for Peace (FFP) office. With this money, USAID/Rwanda contracts with private voluntary organizations to distribute food to the most food-insecure Rwandans, such as orphans, elderly, street children, and people living with HIV/AIDS. FFP also provides food products for re-sale (“monetization”), and supports a “Food for Work” project that gives farmers food in exchange for their efforts to combat soil erosion through terracing and agro-forestry.
Economic Growth Fact Sheet
