The World Bank · national poverty line and 16 percent below the extreme poverty line, a reduction...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: PAD2389

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 56.7 MILLION (US$80 MILLION EQUIVALENT)

TO THE

REPUBLIC OF RWANDA

FOR A

STRENGTHENING SOCIAL PROTECTION PROJECT

November 27, 2017

Social Protection and Jobs Global Practice

Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective as of September 30, 2017)

Currency Unit = Rwandan Franc (RWF)

US$1 = RWF 833

US$1 = SDR 0.70756386

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

ACCA Association of Chartered Certified Accountants

ANC Antenatal Care

BCC Behavior Change Communication

BNR National Bank of Rwanda

CAT Certified Accounting Technician

CHW Community Health Worker

CMS Citizen Monitoring System

CPA Chartered Public Accountant

CPF Country Partnership Framework

CPS Country Partnership Strategy

cPW Classic Public Works

DFID U.K. Department for International Development

DHS Demographic and Health Survey

DoL Division of Labor

DPF Development Policy Financing

DP Development Partner

DPO Development Policy Operation

DS Direct Support

ECD Early Childhood Development

EDPRS Economic Development and Poverty Reduction Strategy

EICV Integrated Household Living Conditions Survey

EKN Embassy of the Kingdom of the Netherlands

EMPs Environment Management Plans

ePW Expanded Public Works

ESMF Environmental and Social Management Framework

ESMP Environmental and Social Management Plan

EU European Union

FAO Food and Agriculture Organization of the United Nations

FARG Genocide Survivors’ Fund

FM Financial Management

FMS Financial Management Specialist

GDP Gross Domestic Product

GMP Growth Monitoring and Promotion

GoR Government of Rwanda

GRS Grievance Redress Service

IA Internal Auditor

IBRD International Bank for Reconstruction and Development

ICR Implementation Completion and Results Report

IDA International Development Association

IEG Independent Evaluation Group

IFMIS Integrated Financial Management Information System

IFR Interim Financial Report

IMF International Monetary Fund

IPSAS International Public Sector Accounting Standards

IPF Investment Project Financing

iSP‐MIS Integrated Social Protection Management Information System

ISSAIs International Standards on Auditing

J‐PAL Abdul Latif Jameel Poverty Action Lab

LODA Local Administrative Entities Development Agency

M&E Monitoring and Evaluation

MDTF Multi‐Donor Trust Fund

MEIS Monitoring and Evaluation Information System

MIGEPROF Ministry of Gender and Family Promotion

MINAGRI Ministry of Agriculture

MINALOC Ministry of Local Government

MINECOFIN Ministry of Finance and Economic Planning

MINISANTE Ministry of Health

MIS Management Information System

NECDCP National Early Childhood Development Coordination Program

NFNCS National Food and Nutrition Coordination Secretariat

NGO Nongovernmental Organization

NISR National Institute of Statistics of Rwanda

NSPS National Social Protection Strategy

OAG Office of the Auditor General

PDO Project Development Objective

PFM Public Financial Management

PIU Project Implementation Unit

PPSD Project Procurement Strategy for Development

PRAMS Procurement Risk Assessment and Management System

PW Public Works

RAP Resettlement Action Plan

RPF Resettlement Policy Framework

SAI Supreme Audit Institution

SCD Systematic Country Diagnostic

SBCC Social and Behavior Change Communication

SP‐IPF Social Protection ‐ Investment Project Financing

SPIU Single Project Implementation Unit

SPS Social Protection Systems

SSPS Support to the Social Protection System

SPO Social Protection Officer

SPSWG Social Protection Sector Working Group

STEP Systematic Tracking of Exchanges in Procurement

SWG Sector Working Group

TA Technical Assistance

ToR Terms of Reference

UNICEF United Nations Children’s Fund

USAID United States Agency for International Development

VUP Vision 2020 Umurenge Program

WA Withdrawal Application

WASH Water, Sanitation, and Hygiene

Regional Vice President: Makhtar Diop

Country Director: Diarietou Gaye

Senior Global Practice Director: Michal Rutkowski

Practice Manager: Dena Ringold

Task Team Leader(s): Laura B. Rawlings, Briana Wilson, Iftikhar Malik

The World Bank Strengthening Social Protection - Rwanda (P162646)

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BASIC INFORMATION

Is this a regionally tagged project? Country(ies) Financing Instrument

No

Investment Project Financing

[ ] Situations of Urgent Need of Assistance or Capacity Constraints

[ ] Financial Intermediaries

[ ] Series of Projects

Approval Date Closing Date Environmental Assessment Category 18‐Dec‐2017 30‐Jun‐2021 B ‐ Partial Assessment

Bank/IFC Collaboration

No

Proposed Development Objective(s) To improve the effectiveness of Rwanda’s social protection system, notably the flagship Vision 2020 Umurenge Program (VUP), for targeted vulnerable groups. Components Component Name Cost (US$, millions)

Component 1: Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge Program (VUP) cash transfers

68.50

Component 2: Enhancing access to human capital and economic inclusion services 6.50

Component 3: Delivery Systems, Policy and Program Management 5.00

Organizations Borrower :

Republic of Rwanda

Implementing Agency : Ministry of Local Government (MINALOC) Local Administrative Entities Development Agency (LODA)


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PROJECT FINANCING DATA (US$, Millions)

[ ✔ ] Counterpart Funding

[ ] IBRD [ ✔ ] IDA Credit

[ ] IDA Grant

[ ] Trust Funds

[ ] Parallel Financing

FIN COST OLD

Total Project Cost: Total Financing: Financing Gap:

86.00 86.00 0.00

Of Which Bank Financing (IBRD/IDA):

80.00

Financing (in US$, millions) FIN SUMM OLD

Financing Source Amount

Borrower 6.00

IDA‐61690 80.00

Total 86.00

Expected Disbursements (in US$, millions)

Fiscal Year 2018 2019 2020 2021

Annual 1.00 36.00 35.00 8.00

Cumulative 1.00 37.00 72.00 80.00 INSTITUTIONAL DATA

Practice Area (Lead)

Social Protection & Labor


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Contributing Practice Areas

Health, Nutrition & Population

Climate Change and Disaster Screening

This operation has been screened for short and long‐term climate change and disaster risks

Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project‐relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK‐RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Moderate

2. Macroeconomic Moderate

3. Sector Strategies and Policies Low

4. Technical Design of Project or Program Moderate

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary Substantial

7. Environment and Social Moderate

8. Stakeholders Moderate

9. Other

10. Overall Substantial


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COMPLIANCE

Policy

Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✔] No

Does the project require any waivers of Bank policies?

[ ] Yes [✔] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔ Natural Habitats OP/BP 4.04 ✔ Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description Appointment of key staff of the Single Project Implementation Unit (MINALOC‐SPIU) throughout Project

implementation, no later than three (3) months after the Effective Date. (Schedule 2; Section I.A.1.)

Sections and Description Appointment of key staff of the Single Project Implementation Unit (LODA‐SPIU) throughout Project

implementation, no later than three (3) months after the Effective Date. (Schedule 2; Section I.A.3.)

Sections and Description Adoption by Recipient and LODA, not later than three (3) months after the Effective Date, the Procurement

Guidelines, in a manner and substance satisfactory to the Association. (Schedule 2; Section I.D.2.)


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Sections and Description Adoption by Recipient and LODA, not later than three (3) months after the Effective Date, the FM Guidelines, in a

manner and substance satisfactory to the Association. (Schedule 2; Section I.C.1.)

Sections and Description Adoption, not later than three (3) months after the Effective Date, the Project Implementation Plan, in a manner

and substance satisfactory to the Association. (Schedule 2; Section I.E.1.)

Sections and Description No later than six (6) months after the Effective Date, the Recipient shall and shall cause LODA to adopt the

Guidelines for Sustainable Livelihood Enhancements, in form and substance satisfactory to the Association.

(Schedule 2; Section IV.B.)

Sections and Description No later than six (6) months after the Effective Date, the Recipient shall and shall cause LODA to adopt the

Guidelines for Caseworkers, in form and substance satisfactory to the Association. (Schedule 2; Section IV.A.)

Conditions

Type Description Effectiveness The Subsidiary Agreement has been executed on behalf of the Recipient and the

Project Implementing Entity and all conditions precedent to its effectiveness, save for the effectiveness of the Financing Agreement, shall have been met. (Article V, 5.01)

Type Description Disbursement No withdrawals shall be made for payments under Category 2 unless and until the

Recipient has adopted the updated VUP‐OM, in form and substance satisfactory to the Association.(Schedule 2, Section III.B.(b)

PROJECT TEAM

Bank Staff

Name Role Specialization Unit

Laura B. Rawlings Team Leader(ADM Responsible)

GSP01

Briana N. Wilson Team Leader GSP03

Iftikhar Malik Team Leader GSP01


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Mulugeta Dinka Procurement Specialist(ADM Responsible)

Procurement GGO01

Enagnon Ernest Eric Adda Financial Management Specialist

Financial Management GGO31

Alex Kamurase Team Member GSP01

Antonia T. Koleva Team Member GSP01

Dimitrie Mukanyiligira Sissi Team Member AFMRW

Emma Mercedes Monsalve Montiel

Team Member GSP07

Emmanuel Muligirwa Environmental Safeguards Specialist

Environmental Safeguards GEN01

George Bob Nkulanga Team Member Social Safeguards GSU07

Glenn Pearce‐Oroz Team Member GWA01

Harriet Nattabi Team Member GWA01

Hugo Martin Brousset Chaman

Team Member GSP04

Jonathan Kweku Akuoku Team Member GHN07

Maiada Mahmoud Abdel Fattah Kassem

Team Member Disbursement WFALA

Maria Laura Sanchez Puerta

Team Member GPSJB

Mariam Denise Brain Team Member GSP01

Meera Shekar Team Member GHNDR

Miriam Schneidman Team Member GHN01

Silas Udahemuka Team Member GSP01

Sofia De Abreu Ferreira Counsel Legal LEGEN

Theogene Habakubaho Social Safeguards Specialist GSU07

Extended Team

Name Title Organization Location


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RWANDA

STRENGTHENING SOCIAL PROTECTION ‐ RWANDA

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ............................................................................................................ 1

A. Country Context ................................................................................................................. 1

B. Sectoral and Institutional Context ..................................................................................... 2

C. Higher Level Objectives to which the Project Contributes ............................................... 4

II. PROJECT DEVELOPMENT OBJECTIVES .................................................................................. 5

A. PDO ..................................................................................................................................... 5

Project Beneficiaries ............................................................................................................... 5

PDO‐Level Results Indicators .................................................................................................. 6

III. PROJECT DESCRIPTION ....................................................................................................... 6

A. Project Components ........................................................................................................... 6

B. Project Cost and Financing ............................................................................................... 12

C. Lessons Learned and Reflected in the Project Design ..................................................... 12

IV. IMPLEMENTATION ........................................................................................................... 14

A. Institutional and Implementation Arrangements ........................................................... 14

B. Results Monitoring and Evaluation ................................................................................. 15

C. Sustainability .................................................................................................................... 15

D. Role of Partners ................................................................................................................ 16

V. KEY RISKS .......................................................................................................................... 16

A. Overall Risk Rating and Explanation of Key Risks ........................................................... 16

VI. APPRAISAL SUMMARY ..................................................................................................... 17

A. Economic and Financial Analysis ..................................................................................... 17

B. Technical ........................................................................................................................... 19

C. Financial Management ..................................................................................................... 21

D. Procurement ..................................................................................................................... 22

E. Social (including Safeguards) ............................................................................................ 22

F. Environment (including Safeguards) ................................................................................ 24

G. World Bank Grievance Redress ....................................................................................... 25

VII. RESULTS FRAMEWORK .................................................................................................... 26


viii

ANNEX 1: DETAILED PROJECT DESCRIPTION .......................................................................... 34

ANNEX 2: IMPLEMENTATION ARRANGEMENTS ..................................................................... 42

ANNEX 3: IMPLEMENTATION SUPPORT PLAN ........................................................................ 59

ANNEX 4: ECONOMIC AND FINANCIAL ANALYSIS ................................................................... 62


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I. STRATEGIC CONTEXT

A. Country Context

1. Rwanda’s official poverty estimates suggest a continued, substantial decrease in poverty and extreme poverty between 2010/11 and 2013/14. The 2013/14 Integrated Household Living Conditions Survey (EICV4), published in August 2015, showed that 39 percent of the population lives below the national poverty line and 16 percent below the extreme poverty line, a reduction from 45 percent and 24 percent, respectively, in 2010/11.1 This reduction in poverty has been driven by strong economic growth and improved agricultural productivity as well as a commitment to good governance, both in terms of economic management and service delivery. The gains in poverty reduction have been accompanied by impressive progress in human development, including meeting most of the Millennium Development Goals (MDGs) in 2015.

2. Despite Rwanda’s impressive achievements in reducing poverty and building human capital, critical challenges remain, including the need to address the country’s high rate of chronic malnutrition and, more broadly, the nexus between poverty, vulnerability, and child development. With a gross domestic product (GDP) per capita of US$729 (2016), Rwanda remains one of the poorest countries in the world. Poverty remains high in rural areas and among households with many children. Chronic child malnutrition affects 38 percent of Rwandan children under five, with a higher incidence among poorer households and those with many children where malnutrition is concentrated among the later‐born siblings. An analysis of determinants for chronic malnutrition suggests that environmental factors, both behavioral and those linked to access to water and sanitation, have also contributed to this problem. This situation places severe limits on the productive capacity of the next generation as well as Rwanda’s future competitiveness.2

3. Rwanda’s very young demographic profile (17 percent of its population is under five), coupled with its vision for the future where services will increasingly be drivers of economic growth, calls for investments in the human capital of its children and a prioritization of the chronic malnutrition problem. This necessitates a multisectoral approach grounded in maternal and child health, water and sanitation, nutrition‐sensitive and specific interventions, and support to vulnerable populations through social protection.

4. Rwanda is poised to address these challenges through continued economic growth and effective management of public sector investments, notably in the social sectors. Rwanda ranks well in global governance metrics, including corruption indicators measured by the World Governance Indicator rankings and competitiveness in the World Economic Forum’s Global Competitiveness Index. This strong performance continues to be aided by the ambitious development agenda of the country enshrined in its Vision 2020 Umurenge Program (VUP). Delivering on Rwanda’s ambitious goal will require enhanced local government capacity as Rwanda continues to actively decentralize development planning and the delivery

1 While the two rates are based on slightly different methodologies, robustness tests performed by the National Institute of Statistics of Rwanda (NISR) suggest that a statistically significant declining trend is also obtained when using a common poverty line (in real terms) across the two surveys. NISR (National Institute of Statistics of Rwanda). 2016. Poverty Trend Analysis Report 2010/11 – 2013/14. Available at http://www.statistics.gov.rw/publication/poverty‐trend‐analysis‐report‐201011‐201314. 2 Economic Development and Poverty Reduction Strategy 2013–2018 (EDPRS‐2); EICV4 available at http://www.statistics.gov.rw/publications/rwanda‐poverty‐profile‐report‐results‐eicv‐4; Demographic and Health Survey (DHS) of 2015 using the stunting rate as the rate of malnutrition.


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of services across multiple sectors.

B. Sectoral and Institutional Context

5. Social protection remains one of the main priorities of the Government of Rwanda (GoR) for meeting its ambitious poverty reduction and human capital development goals. To further this agenda, Rwanda has started building an integrated social protection system to ensure a minimum standard of living and access to core public services, boost resilience to shocks, promote equitable growth, and strengthen opportunity through increased human capital development. These efforts have allowed Rwanda to make rapid progress in establishing a strong base for a social safety net, but these systems remain at an early stage of development by global standards. Much work remains to ensure expansion of the coverage of social protection programs, maximize the poverty and human development impact of social protection programs, and ensure that opportunities exist for families benefitting from social protection to build pathways out of poverty.3

6. The GoR is fully committed to investing in children’s development and in jump‐starting an integrated program to combat chronic malnutrition. Social protection is expected to play a key role, particularly in supporting vulnerable pregnant mothers and young children to ensure that they have access to the services and support needed. As such, this project is part of a larger World Bank program supporting the Government in combating malnutrition, notably during the first 1,000 days in life, which includes new projects in nutrition, agriculture, and social protection sectors scheduled for approval in FY18, a program of analytical work, private‐public partnerships, and a transversal focus on water and sanitation (see figure 1). The proposed nutrition project, Stunting Prevention and Reduction Project (P164845), will support the behavior change interventions of community health workers (CHWs), improve coverage of high‐impact health and nutrition services, and knowledge sharing and innovations to enhance impacts. In coordination with a new agriculture project and a transversal focus on water and sanitation, these two projects will form a joint program on combating chronic malnutrition and will liaise closely with the newly formed National Early Childhood Development Coordination Program (NECDCP) which has recently been introduced and will take over and build on the work done by the National Food and Nutrition Coordination Secretariat (NFNCS).

7. The project also envisages supporting the introduction of new nutrition support grants, targeted to vulnerable households with pregnant women and children under five, with more focus on children under two. The proposed nutrition support grants would likely be financed by a grant out of the Multi‐Donor Trust Fund (MDTF) for Achieving Nutrition Impact at Scale. The World Bank is currently negotiating with Power of Nutrition (donor), its supplemental contribution to this MDTF, which would support this activity with an amount of around US$10 million. The proposed grant funding would finance the introduction of the nutrition support grants targeted to vulnerable (Ubudehe 1) households, starting with a sample of the districts targeted for support under the Stunting Prevention and Reduction Project. The nutrition support grants would provide a demand‐side complement to the supply‐side interventions being supported through the nutrition and agriculture projects, paving the way for improved consumption, parenting, and nutrition‐sensitive practices and access to services.

3 Oxford Policy Management.


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Figure 1. Pathways to Improved Nutrition within the Health and Social Protection Operations

Note: WASH = Water, Sanitation, and Hygiene.

8. The proposed investment project would build on the success of three series of development policy operations (DPOs) which helped establish the foundation of Rwanda’s social protection system. The recently concluded DPO series supported Rwanda to rapidly establish a well‐structured social safety net with national coverage of key components, based on a set of reforms foundational to the efficiency, accountability, and transparency of the system. At the heart of these reforms was the establishment in 2009 and subsequent scale‐up of the flagship VUP, an effort that received strong technical and financial support from the World Bank and other development partners (DPs). The two core safety net components of the VUP are direct support (DS) that provides unconditional cash transfers to eligible households with no labor capacity and reaches over 94,500 households across the country, and classic public works (cPW) that offers short‐term work opportunities on labor‐intensive projects to eligible households with labor capacity, covering more than 105,000 households.

9. The proposed operation would bring the implementation of the social safety net to the next level by supporting the Government to improve the adequacy and effectiveness in the delivery of social protection, with a primary focus on the VUP. A 2014 impact evaluation (Hartwig 2014) found that both the VUP DS and cPW can have positive impacts on household well‐being by enabling them to meet immediate needs and accumulate livestock, but that these impacts are less pronounced for public works (PW) than for DS beneficiaries and might not be sustained. This and other analytical work (Ayliffe et al. 2015a, 2015b; FAO 2015; FATE Consulting 2015) suggest that stronger impacts of the VUP can be expected if (a) the timeliness and predictability of DS and PW payments are improved; (b) coverage of PW is extended to a higher proportion of eligible households (currently only around 49 percent of eligible households participate in PW); (c) PW are better adapted to the needs of labor‐constrained households by providing more accessible job types and providing higher transfers for a sustained period, by offering a higher number of days work; (d) DS targeting criteria is expanded or a separate program is designed to include more vulnerable households, specifically those with limited labor and caring responsibilities; and (e) links to key services and to information on entitlements are strengthened for vulnerable and marginalized households. The proposed project would support strengthening of the design and


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implementation of the social safety net to address these issues, including by building program management capacity at both the central and local government levels for better planning, implementation, and monitoring and evaluation (M&E).

10. The operation is fully aligned with Rwanda’s National Social Protection Strategy (NSPS) 2013–2018 and Economic Development and Poverty Reduction Strategy‐2 (EDPRS‐2), 2013–2018. The NSPS sets out five key priorities. These are to (a) increase coverage of the extreme poor and vulnerable; (b) address child poverty and vulnerability in the poorest households; (c) ensure a sustainable impact of the social protection system on extreme poverty; (d) establish a more efficient, effective, and harmonized social protection system; and (e) improve the measurement and visibility of social protection results and impacts. The operation will particularly support the commitments under priority (b) on child poverty by, among others, increasing the social protection coverage of extremely poor households with children, by primarily increasing the coverage of PW programs; reviewing the design of PW programs to make them more responsive to child poverty and nutrition; and creating synergies with complementary programs that promote child nutrition and well‐being.

11. Analytical work has identified some challenges with cPW, including issues of self‐exclusion of moderately labor‐constrained households, lack of knowledge on available services, inability to accumulate assets, and unintended negative impacts on the care and nutrition of young children.4 In response, the GoR has designed a new expanded public works (ePW) component for moderately labor‐constrained households caring for children, which will offer a more flexible year‐round work schedule and more compatible with daily wage work and caring responsibilities. The new types of PW on offer will include home‐based childcare work, whereby ePW participants will be employed to care for the children of other extremely poor households while parents work elsewhere. A program of community‐based parenting training and supervision for the childcare‐focused ePW would be developed in close coordination with the Ministry of Gender and Family Promotion (MIGEPROF) and the Ministry of Health (MINISANTE), leading the new nutrition project. The GoR has also begun implementing various livelihood enhancement activities to address barriers to asset accumulation and access to services for the most vulnerable households.

12. This social protection project would be implemented by MINALOC and the Local Administrative Entities Development Agency (LODA)—the ministry and implementing entity charged with social protection and local government coordination, respectively. MINALOC is a well‐established ministry within the GoR structure, with a broad mandate for local development, cutting across a range of sectors, and is the primary agency responsible for social protection. LODA is a semiautonomous agency under MINALOC, with a mandate to coordinate implementation of local government support activities in economic development and social protection.

C. Higher Level Objectives to which the Project Contributes

13. The proposed project is directly aligned with the World Bank’s Country Partnership Strategy (CPS) (FY2014–20) for Rwanda. It falls under theme 2 of the CPS: “Improving the productivity and incomes of the poor through rural development and social protection.” A World Bank analysis of poverty shows that growth alone will not be sufficient to reach poverty targets. International and national goals for poverty reduction are only attainable with a strategy that builds the incomes and human capital of the

4 Ayliffe et al. 2015a, 2015b; FAO 2015; FATE Consulting 2013 and 2015.


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poorest quintiles and ensures that the prosperity that is generated by growth is adequately shared across the income distribution.

14. The project also contributes to Rwanda’s ambitious goals to address child development and combat chronic malnutrition, as provided in EDPRS‐2 and the NSPS and joint World Bank – Government of Rwanda program. Global evidence points to the role that social safety net programs can play in enhancing the human capital among the poor. Many countries are widely using social safety nets not only as an income support but also as a means to incentivize investments in human capital through sharing of knowledge on child nutrition and cognitive development, better parenting, and improving access to relevant services. Such investments in the early years of life help in addressing the strategic needs by increasing the earning abilities of poor households in the longer run. Impact evaluations of these programs have shown that cash transfers can have significant, long‐term impacts on children’s physical development, socioemotional behavior, and schooling.5

II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

15. The Project Development Objective (PDO) is to improve the effectiveness of Rwanda’s social protection system, notably the flagship Vision 2020 Umurenge Program (VUP), for targeted vulnerable groups.

16. Effectiveness will be improved by (a) increasing the overall number of beneficiary households (coverage), thereby increasing the number of households receiving income protection; (b) increasing the guaranteed minimum number of days work for PW, thereby effectively increasing the size of transfers households receive; (c) expanding eligibility criteria for DS to include more labor‐constrained households under DS; (d) introducing ePW to provide more accessible jobs to those ineligible for DS but still with labor constraints, which will allow more households with limited labor capacity to access benefits; and (e) increasing the frequency and timeliness of payments, which will increase the reliability of income support. Efforts will also be made to ensure increased access to complementary services to improve the human capital contribution of the VUP. Targeted vulnerable groups include those defined as such by the GoR’s Ubudehe community‐based household classification system, with attention to reaching and serving women and children better.

Project Beneficiaries

17. The intended direct beneficiaries of this operation are vulnerable households primarily in Ubudehe Category 16 in the 416 VUP targeted geographical sectors7 for direct support (DS), giving VUP national coverage; 300 geographical sectors targeted for expanded public works (ePW); 270 geographical sectors targeted for classic public works (cPW) and the introduction of the nutrition support grants proposed for financing out of the MDTF. These vulnerable households will receive cash

5 Independent Evaluation Group systematic review, https://ieg.worldbankgroup.org/Data/reports/chapters/early_child_dev_eval.pdf . 6 Ubudehe is a community‐based system that includes a categorization of households into vulnerability strata; under the latest exercise there are four Ubudehe strata, with 376,192 households in Category 1 of the highest vulnerability, representing 16 percent of the national population. http://www.minaloc.gov.rw/index.php?id=469&tx_ttnews%5Btt_news%5D=461. 7 Rwanda is divided administratively into five provinces, 30 districts, 416 geographical sectors, and 2,148 cells.


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and other support to help them increase their consumption, asset base, skills, parenting practices, and human capital. In addition, the staff of LODA and MINALOC, at both the centralized and decentralized levels, will be direct beneficiaries of the capacity‐building components.8

PDO‐Level Results Indicators

18. The PDO‐level indicators will be the following:

% of all eligible households covered by the VUP (ePW, cPW and DS) in targeted sectors

% of eligible households covered by the VUP PW in targeted sectors

% of eligible Ubudehe 1 households covered by the VUP DS% of cPW households reaching the minimum number of workdays of cPW employment (in the reporting period)

% of eligible ePW households that receive their full ePW entitlement (in the reporting period)

% of eligible DS households that receive their full DS entitlement (in the reporting period)

% of VUP cPW beneficiary payments delivered on time

III. PROJECT DESCRIPTION

A. Project Components

19. The VUP has recently been redesigned to respond to the findings of analytical work and emerging national priorities. The proposed operation will focus on supporting key innovations as well as improvements in the overall effectiveness of the safety net in terms of coverage, timeliness of payments, and adequacy of PW transfers. The project has been structured around three components to support the VUP flagship social safety net program and ensure strong social protection contributions to the national program on combating chronic malnutrition.

Component 1: Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge Program (VUP) cash transfers ‐SDR 48.51 million (US$68.5 million equivalent)

20. The operation will cover, through IDA funds, 40 percent of the costs of the VUP safety nets: transfers; PW wage and non‐wage costs, including capital costs of cPW; and associated administrative costs. This will contribute to the following:

(a) Continuation of DS grants to all eligible populations nationwide and expansion of eligibility criteria to include households with persons with a disability. Continuation of support to approximately 95,8469 Ubudehe 1 households without labor capacity and expansion to approximately 11,000 Ubudehe 1 single‐worker households caring for a person with a disability.

8 In the Results Framework, the World Bank‐mandated core sector indicators on ‘beneficiaries of safety net programs’ include the VUP DS as unconditional cash transfers (with an average household size of two) as well as VUP cPW and ePW (with an average household size of five). 9 Actual number, FY2016/17, Q4.


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(b) Continuation of cPW from 128,000 households10 (in 240 sectors) currently to approximately 141,361 (in 270 sectors) by the end of the operation, with progressive improvements in (i) the percentage of eligible households that are covered; (ii) timeliness of payments; and (iii) the average number of days of work offered, to increase the adequacy of total annual transfers.

(c) Major extension of gender and child‐sensitive ePW model to reach 75,000 households (in 300 sectors) by the end of the operation (up from 2,757 in 30 sectors in FY2016/17, Q4). ePW offers year‐round, multiyear, flexible, part‐time work opportunities to moderately labor‐constrained households, often single‐headed households with caring responsibilities. The current ePW subprojects are primarily flexible road maintenance, an established model with developed norms and regulations. Community‐ and home‐based childcare will be launched as a new type of ePW scheme in FY2018/19: ePW participants will be employed as childcare givers and trained and supervised by appropriate cell‐ and sector‐level staff, with resultant synergies to nutrition and early childhood development (ECD) objectives. LODA will finalize and approve this new ePW childcare model, in collaboration with all relevant social protection and ECD stakeholders, including MIGEPROF. During implementation, the results of evaluations will inform the scale‐up of the subproject. Other new ePW subproject types may also be explored. The coverage of ePW will be deepened in each sector to support at least 250 households;11 geographical coverage will be expanded from the current 30 sectors to 300 sectors (covering all 270 cPW sectors) by the end of the project period. These 300 sectors have been selected based on a poverty map, which includes the concentration of extremely poor households within the district using the EICV data, coupled with data on the number of vulnerable Ubudehe 1 households across sectors. In addition to wages of eligible households employed on ePW, the project will cover direct non‐wage costs of ePW, which will not exceed 30 percent of total direct costs and will consist mainly of goods, including tools for road maintenance, food, and equipment. Minor refurbishments essential to the provision of quality community‐ and home‐based childcare (such as latrine construction and minor infrastructure improvement required according MIGEPROF’s guidelines) will also be funded but not counted as part of the 30 percent cap.

Table 1. Numbers of households eligible for each VUP component nationally and in operational sectors

2018/19 2019/20 2020/21

Benefit Type

Households Nationwide

Households in Eligible VUP Sectorsa


Households in Eligible

VUP Sectors


Households in Eligible VUP Sectors

DS 95,846 95,846 95,846 95,846 95,846 95,846

Expanded DSb

11,000 11,000 11,000 11,000 11,000 11,000

ePW 114,500 41,286 114,500 61,929 114,500 82,572

cPW 328,154 189,844 301,904 172,806 283,154 160,637

Note: a. All 416 geographical sectors nationwide are eligible for VUP DS and expanded DS unconditional transfers; 270 and 300 priority sectors are eligible for VUP cPW and ePW respectively.

10 Actual number, FY2016/17, Q4. 11 The budgeting policy states that ePW will cover at least 70–80 percent of eligible households—250 is an estimate.


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b. DS to Ubudehe 1 single‐worker households caring for a person with a disability.

Component 2: Enhancing access to human capital and economic inclusion services SDR 4.61 million– (US$6.5 million equivalent)

21. Component 2 will improve the contribution of the social protection sector to boost human capital creation and economic inclusion services, with a focus on combating chronic malnutrition and improving child development goals, as well as improving livelihoods by promoting skills development, resilience, and access to services. This component will adopt a ‘learning by doing’ approach to evaluate early stage interventions, then scale up successful innovative interventions to improve resilience in poor households. It will do this through a three‐step process of designing the intervention, including detailed implementation guidance, carrying out a process evaluation of the intervention (supported under Component 3 or through other DPs), and scaling up based on decisions informed by the evaluations. The delivery of these components will make use of innovative public‐private partnerships, including the contracting out of service delivery and linkages with and referral to other programs, leveraging MINALOC and LODA’s cross‐sectoral mandate. This will both test new models and provide support through quality enhancements and accompanying measures to the cash transfers under Component 1. Activities to be supported by this component will include the following:

(a) Nationwide sensitization and community mobilization. This subcomponent has three main objectives: (i) build awareness and understanding of issues which affect potential for human capital development and resilience to extreme poverty (for example, health and hygiene; nutrition; basic animal husbandry; WASH); (ii) ensure households understand their rights and responsibilities and empower communities to hold duty bearers to account for the delivery of high‐quality services and the appropriate use of social protection resources; and (iii) build public understanding and awareness of VUP objectives, modalities, and impacts. Sensitization and community mobilization is a longstanding element of the VUP, but its implementation has been hitherto limited by capacity gaps at the local level. This component will revitalize the community mobilization elements of LODA and the VUP and will scale up selected behavior change communication (BCC) through channels such as radio, notably in coordination with the nutrition project and the sensitization campaigns developed by the Rwanda Biomedical Center.12

(b) Improving parenting and childcare services for vulnerable families in targeted communities. The project will provide the following:

(i) Community‐level support to households on parenting, including cognitive stimulation of young children, appropriate feeding, and incentivizing the use of maternal and child health and nutrition services. This support will be provided as a package in conjunction with the new ePW childcare model and potential nutrition

12 The project will follow the guidelines of the Rwanda Biomedical Center, the agency responsible for delivering BCC nationwide. BCC sessions currently include water and sanitation, parenting, and other key messages for improving nutrition, as well as material produced in partnership with the United States Agency for International Development (USAID) and other DPs. The project will build on the existing guidelines and materials to validate them and finance a proposed scale‐up.


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support grants. Cooking demonstration sessions will be also rolled out in coordination with community kitchen gardens.

(ii) Quality enhancement and supervision to community‐ and home‐based ePW childcare subprojects. Substantial capacity building will be needed for this activity. Because home‐based childcare is a new area for the VUP and capacities within the GoR district and sector offices are limited, specific training and supervision needs will not be easily absorbed within existing budgets. Therefore, in coordination with MIGEPROF, the project will finance

Contracting of service providers at the national or district level to develop a parenting and community/home‐based care training curriculum and carry out training of trainers;

Contracting and training of part‐time trainers in parenting and community/home‐based care in participating sectors to train and oversee cell‐level supervisors and build capacity of subnational GoR staff; and

Contracting and training of cell‐level supervisors to provide DS and supervision of caregivers in community and home‐based care settings and to deliver community‐based parenting capacity‐building sessions.

(c) Enhancing livelihoods. The support to sustainable livelihoods and eventual graduation from extreme poverty is a major policy priority of the GoR. Interventions include a combination of asset transfer grants with caseworker support as well as other services for beneficiaries. The design of the asset transfer and caseworkers’ management system is under way, and the operation will support the strengthening and rollout of these interventions that would support sustainable livelihoods and access to economic opportunities. Caseworkers’ guidelines will be developed detailing how caseworkers will operate, including how referrals are made to a range of productive and social services appropriate to their needs as households. During FY2017/18, before the start of the operation, the GoR will finalize and the World Bank will review the design documents of these interventions, including a comprehensive package of asset transfers, caseworkers’ management system, and training. As part of the caseworkers’ management system, tools shall be strengthened, including training materials for caseworkers and supervisors and for establishing decentralized cadres of caseworker trainers. A process evaluation will also be carried out in FY2017/18, and the results of the evaluation will inform the improvement and scaling up of this initiative, notably the asset transfer and caseworker mechanisms.

22. Components 1 and 2 support innovations, each of which need an approved design, an evaluation of early stage implementation, and decisions on program design and funding implications before the full rollout under the operation. These innovations include (a) the enhancing livelihoods package, which potentially can include skills training, asset transfers (productive and livestock), and referrals to other productive and social services; (b) ePW childcare, which has a detailed design, but remains to be approved by the GoR and has not yet been evaluated; and (c) the proposed nutrition support grants, which are being designed and could potentially be funded through additional financing to this operation, subject to availability of the MDTF grant. Other new models could also be considered for


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support, subject to the same process of design, initial implementation, evaluation, and review.

Component 3: Delivery systems, policy and program management SDR 3.580 million (of which US$5 million equivalent IDA; and US$6 million GoR)

23. This component will build local and national government’s capacity to implement Components 1 and 2, as well as to improve the larger social protection system in Rwanda. MINALOC and LODA will lead their respective subcomponents, which include the following areas: (a) evidence‐based policy and program development, (b) delivery systems, and (c) institutional strengthening for improved service delivery.

MINALOC

(a) Evidence‐based policy and program development to support new and innovative policy and program design changes for the sector. The new NSPS will begin implementation in July 2018. The proposed project will support assessments to monitor and evaluate progress of these new strategies and programs and propose design changes. The project will also support training and capacity building of policy makers and civil servants on M&E methodologies for the social protection sector.

(b) Delivery systems. Substantial efforts have gone into designing and putting into place Rwanda’s social protection systems. Notably, the Government has developed a comprehensive integrated social protection management information system (iSP‐MIS), which serves as a registry for populations eligible for social protection services and a link to the Ubudehe database (social registry) and other program specific registries as well as the national identification database. Further support is required to operationalize and upgrade these systems for use across the social protection system and build in further functionality, including to ensure the coordination with nutrition and early childhood development work.

(c) Institutional strengthening. The proposed project will finance additional posts in the MINALOC Single Project Implementation Unit (SPIU) and technical assistance (TA) to the NECDCP, to strengthen technical, financial, and procurement capacities for implementation of this project. Social protection training will be provided to mid‐ and senior‐level staff, and technical support will be provided to improve program coordination through training and expertise to develop guidance and systems. Project management costs, including MINALOC incremental operating costs and additional Project Implementation Unit (PIU) staff, will also be supported through this component.

LODA

(a) Evidence‐based policy and program development, including a focus on the VUP design changes, notably adding complementary child development and nutrition support services and a focus on promoting livelihoods. These new programs will require significant design and implementation support, as well as high‐quality M&E. Analytical work will be supported and expert technical advice and training will be provided to improve the VUP M&E mechanisms, impact evaluation design, and implementation.


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(b) Delivery systems. LODA has various new, promising social protection service delivery systems that need strengthening. LODA has developed an updated Monitoring and Evaluation Information System (MEIS) and has newly introduced a grievance and redress system (the citizen monitoring system [CMS]). Full operationalization of these systems has not yet occurred, for instance, payments issues have not been fully resolved. Thus, further support is required to operationalize and upgrade these systems for use across the social protection system and to build in further functionality, such as citizen monitoring and payments. Finally, support is required around cross‐program coordination and harmonization, which will be provided through this component.

(c) Institutional strengthening for improved service delivery. Support will be provided to build human resource capacity at all levels—central, district, sector, and cell. At the central level, the proposed project will finance additional posts in the LODA SPIU to strengthen technical, financial, and procurement capacities for an effective implementation of the project. Social protection training will be provided to mid‐ and senior‐level staff, and technical support will be provided to improve program coordination through training and expertise to develop guidance and systems. Staff in districts and sectors with key responsibilities for the VUP implementation will be trained on the revised VUPs policy, procedures, and systems and social protection in general. To sustainably build capacity for frontline delivery at the cell level, frontline staff will be trained by LODA, either directly or through the contracting of service providers. Project management costs, including LODA incremental operating costs and additional PIU staff, will also be supported through this component.

Proposed Nutrition Support Grant

24. A proposed grant from the MDTF for Achieving Nutrition Impact at Scale (approximately US$10 million) would finance the introduction of a new nutrition support grant over three years. These new child‐focused nutrition support grants would be targeted to the poor (Ubudehe 1); nutritionally vulnerable households with pregnant women and children under five, with a focus on the 1,000‐day window from later pregnancy until age 2. It would be a conditional cash transfer, with requirements for attendance to parenting sessions and the use of maternal and child health services (including ante and post‐natal care, as well as following established protocols for monitoring growth of young children). It would be coupled with behavioral support for parenting, as provided in Component 2. The grant would be twinned with supply‐side interventions provided by the new World Bank Stunting Prevention and Reduction Project as a complement to the overall GoR program for combating chronic malnutrition. Specific targeting criteria between the nutrition support grants and ePW are still being determined. This element is proposed for inclusion as additional financing to this operation, to be processed once administrative and financial arrangements with the MDTF have been concluded.


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B. Project Cost and Financing

Table 2. Strengthening Social Protection Project Cost and Financing (in US$)

Project Components Total Project

Cost IDA

Financing Counterpart Financing

1. Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge Program (VUP) cash transfers

2. Enhancing access to human capital and economic inclusion services

3. Delivery systems, policy and program management Total Costs

68,500,000

6,500,000

11,000,000

86,000,000

68,500,000

6,500,000 5,000,000

80,000,000

‐‐

‐‐ 6,000,000

86,000,000

C. Lessons Learned and Reflected in the Project Design

25. Rwanda’s social safety net now has well‐established foundations in terms of policy, institutions, and operations. These have been established by the GoR with support from DPs, drawing on lessons from global good practice and over a decade of World Bank engagement in social protection. It is an opportune time to build on the policy‐based reforms which supported the establishment of the social protection sector to now focus on results and fine‐tuning to ensure its improved coverage and effectiveness.

26. The project design reflects key lessons from recent World Bank engagement in social protection in Rwanda using DPOs, the global literature on safety nets, and a suite of studies and analytical work. These lessons include the following:

A commitment to clear national goals and targets, coupled with continuity and accountability, have contributed to Rwanda’s social safety net, as noted in the social protection system Development Policy Financing (DPF) series Implementation Completion and Results Reports (ICRs). The GoR’s sustained policy and financial commitment to social protection has been supported by the World Bank’s continued presence in the sector for over a decade and strong alignment with a core set of DPs.

Service delivery instruments are foundational elements of a social protection system; these need continual support and strengthening given the pace of technological change and the evolution of social protection systems. In Rwanda, the development of targeting mechanisms; a Management Information System (MIS) for social protection; an update of the Ubudehe registry linked to national identification; and a grievance and redress system accessible by phone, web, and SMS has taken time, but they provide a strong basis for a functional social protection system. These foundational systems developed by LODA are closely linked not only to core social protection programs but are already being used by a range of other programs, notably in the social sectors including health insurance and education scholarships.

Program design and staff capacity are critical investments: Various assessments under Support to the Social Protection Systems (SSPS) and Social Protection Systems (SPS) ‐1,2 and


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3 pointed to the importance of both program design and institutional capacity. MINALOC and LODA have played central roles in the establishment and implementation of the social protection sector but will need to continue to invest in reviewing design elements based on performance evidence, as well as invest heavily in staffing and capacity building, including at the local level, given the growing decentralization. Lessons point to the importance of improving program design before expansion as well as proper staff capacity to implement large‐scale programs.

Coordinated efforts across DPs well aligned with Government priorities provide important technical and financial support to reforms. Although it is always the driver of the reform effort, the GoR has counted upon needed financial and TA from its DPs, all under a well‐coordinated and functioning donor‐government group, the Sector Working Group (SWG), using regular backward‐ and forward‐looking joint sector reviews to ensure collaboration in monitoring progress and implementing well‐coordinated policies and programs. The continuity in this commitment—in financing, coordination, and the provision of hands‐on TA and advisory support—has been laudable and instrumental in helping Rwanda address its goals and targets.

Citizens’ engagement is key to the effectiveness of the social safety net, and Rwanda has developed a set of home‐grown approaches for planning and implementing development initiatives that are germane to the PDO. Earlier projects contributed to the development of a grievance and redress system as well as supported district accountability days and community engagement models. Rwandan governance models, including imihigo social contracts, umuganda community workdays and community‐based parenting sessions draw heavily on citizens’ engagement and are recognized as playing an important role in development by allowing participation of marginalized and vulnerable groups and in securing citizen support and involvement in Government initiatives.

There is growing evidence around how to design effective programs to promote asset accumulation and skills development through asset‐based transfers and skills building (Bangladesh Rural Advancement Committee ‐BRAC, Consultative Group to Assist the Poor ‐ CGAP models) but less evidence on how to implement these programs on a sustainable scale. The design of successful approaches has been informed by global practice, but the mixed evaluation results to date point to the importance of program‐specific design, testing, and evidence on performance.

Social cash transfers delivered with accompanying measures focused on strengthening parenting skills on the demand side, coupled with effective health and nutrition interventions on the supply side, can be an effective combination for addressing chronic malnutrition and building children’s human capital. These complementarities are underscored in the Lancet 2016 nurturing care framework and by evidence on the long‐term impacts of these types of investments on child development outcomes (IEG 2016).

Investments in human capital development are particularly critical during the ‘first 1,000 days’ spanning pregnancy and the first years of life. Building neural infrastructure during this ‘window of opportunity’ through investments in nutrition, health, and cognitive


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stimulation while ensuring protection from stress is a fundamental building block for individual and societal productivity. The social protection sector can play a key role in reaching vulnerable families, encouraging the use of available services and providing support for families beyond income support.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

27. The two project implementing agencies are LODA and MINALOC and their responsibilities in project delivery align with their institutional mandates. LODA will have overall responsibility for the delivery of Component 1 (Improving coverage, adequacy and effectiveness of the VUP cash transfers), and Component 2 (Enhancing access to human capital and economic inclusion services) will be delivered mainly by LODA with some elements delivered by MINALOC. Operational delivery of Components 1 and 2 will be carried out mainly by districts, which are decentralized legal entities, and their subdivisions, sectors and cells. Responsibility for delivery of Component 3 (Delivery systems, policy and program management) will be split between LODA and MINALOC. LODA will also lead operational coordination—it will consolidate its own budgets and financial reports with those from MINALOC and the districts for submission to the World Bank. MINALOC will lead policy coordination. Both MINALOC and LODA already have SPIUs in place, which will play key roles in the project.

28. The two implementing agencies are assessed as having generally sufficient capacities to deliver their responsibilities under the project, but a number of capacity challenges have been identified. First, this is the first Investment Project Financing (IPF) in the social protection sector in Rwanda. Typically, IPFs require more capacity to implement than DPOs, as well as stronger financial management (FM) and procurement capacities at the central and decentralized levels. Second, the operation supports several programming innovations, which are at various stages of design and implementation. These will require more and different types of capacity than the ongoing implementation of well‐established VUP components and stronger learning capacities. Third, decentralized entities will be responsible for frontline delivery and, therefore, key to the success of the project, and capacities at these levels are more constrained than at the national level.

29. Interventions are included in the project to address these challenges and further strengthen delivery capacities. In particular, additional social protection positions shall be established to constitute a team within the existing LODA SPIU, headed by a Social Protection Program Coordinator and comprising one M&E and Learning Specialist, two Social Protection Specialists, two Social Protection MEIS Specialists, one Data Analyst, two Safeguards Specialists, one Procurement Specialist, two Financial Management Specialists (FMSs) (at least one of whom will be an accredited accountant), one Financial Compliance Monitoring Specialist, and one Internal Auditor. To ensure that this team serves to sustainably build capacity of core LODA and district staff, all members will have a capacity‐building objective in their job description and performance contract. The following staff will also be added to the MINALOC SPIU: two Social Protection Specialists (one in charge of policy advisory services and the other in charge of coordinating the SWG) and a national Nutrition Specialist to provide TA to the NECDCP. The capacity requirements of both implementation agencies will be reviewed from time to time and if needed, the project will provide the resources to fill the gaps, if any. For the subnational levels, the GoR has committed to addressing key constraints by including a District Social Protection MIS and Data Management Officer in each district, facilitating sector Social Protection Officers (SPOs) to travel to communities to support


15

and monitor social protection programs more effectively, reducing the burden on SPOs by filling other unfilled posts at the sector level, and establishing a sustainable and effective system for building the skills of frontline staff and volunteers. Project financing will be available to support key agreed initiatives.

30. Addressing the PDOs will require the involvement of many stakeholders, and the existing Social Protection Sector Working Group (SPSWG) will be the main coordination mechanism. Based on lessons learned from other similar operations, actual implementation arrangements for this project have been kept as simple as possible: no new structures have been created, responsibilities have been aligned with current mandates and capacities, and the number of implementing agencies has been kept to a minimum. However, many other stakeholders are important to the delivery of the PDOs, so the project will promote coordination of all relevant ministries, agencies, other DPs, and nongovernmental organizations (NGOs) through the existing SPSWG structures.

B. Results Monitoring and Evaluation

31. The Results Framework (see section VII) includes selected results indicators that are closely monitored within the GoR and are drawn from the national Social Protection Sector‐wide M&E Framework. These indicators will be monitored and reported on by the LODA M&E Unit, as well as through the NECDCP. The SWG is in charge overall of sector‐wide M&E and monitoring, which is enshrined in the six monthly joint social protection sector reviews that assess sector performance on policy, outputs, and outcomes and make recommendations for the next six months. In addition, other indicators, considered to be important to the success of the proposed operation, will be monitored outside the Results Framework.

32. As part of the GoR’s commitment to results‐based policy, every three years the NISR implements a nationally representative EICV. For the first time in EICV4 (2013/14), the NISR collected an oversample of VUP beneficiaries to be used to estimate benefit incidence and generosity. The GoR is working to carry out an impact evaluation of the VUP through the EICV and looking at possibilities to construct a VUP pre‐program baseline and a matched control with EICV5 (2016/17) as this was not established in EICV4. This evaluation would assess the impacts of the VUP over time using difference‐in‐difference estimates. This type of analysis should be supported through a program of technical collaboration with the NISR and is under discussion with DPs. Should the matching in the EICV not prove feasible, the Government is supportive of an independent impact evaluation funded through this operation or other DPs. The GoR will also carry out a process evaluation of the livelihood activities, ePW childcare provision, and the proposed nutrition support grant to develop lessons learned and inform the future design of the program and scale‐up. The project will provide required resources to effectively undertake these M&E activities.

C. Sustainability

33. Several factors underpin the sustainability of the proposed project outcomes. First, the project is built on the success of three series of DPOs which helped establish the foundation of Rwanda’s social protection system. Specifically, the DPOs’ series which started in 2009 created a firm foundation for a social protection system that is increasingly institutionally mature and central to poverty reduction approaches, with a national coverage of the flagship VUP Social Protection Program.

34. Second, the project will be implemented under the environment of strong political and financial


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commitment to social protection by the GoR. This is evidenced by the fact that social protection is an integral part of Rwanda’s EDPRS to which it contributes to a range of objectives, both as a foundational sector and by delivering results under the rural development theme. The policy environment has been supported consistently. The 2011 NSPS was updated in 2013 and is valid until 2018. Consultations have started and the new NSPS is expected in 2018. The political and policy commitment to social protection is coupled with financial commitments. A recent review of the social protection sector financing strategy estimated that in FY2016/17, the social protection sector expenditures were up to 1.4 percent of GDP,13 up from only 1.1 percent in FY2010/11, which was already in line with the average in African lower‐income countries. Moreover, a dedicated finance subcommittee of the SPSWG was set up to support the implementation of the social protection financing strategy and address FM issues across the sector.

35. Third, project implementation will be carried out by the same Government entities that have been implementing the previous DPOs (MINALOC and LODA). The use of existing/strengthened capacity for both the design and implementation is key to sustainability as the ownership by the Government is ensured. Further capacity strengthening will be included under Component 3.

D. Role of Partners

36. The World Bank team engages in regular consultations with the core social protection DPs on emerging issues that require collaboration with, and attention by, other DPs. The GoR’s revised division of labor (DoL) 2013 framework for social protection identifies the World Bank as a main international partner, along with the U.K. Department for International Development (DFID) and the United Nations Children’s Fund (UNICEF). DFID is the lead donor agency for social protection and co‐chair of the SPSWG. DFID has an active social protection support program, which includes a robust long‐term, full‐time TA program working directly with MINALOC and LODA. UNICEF is supporting work to improve the gender sensitivity and child sensitivity of the labor‐intensive PW programs and strengthen social protection support to ECD. Both international agencies’ support to social protection includes financing for technical studies linked to the operation. The social protection support, TA, and technical studies by the partners are key complements to this project. Financing is also well coordinated between the three institutions.

37. While DFID and UNICEF, along with the World Bank, are the main international agencies active in social protection according to the DoL, the World Bank also coordinates with other agencies, mainly through the SPSWG and other bilateral meetings. There is also periodic and regular coordination and consultation with a number of DPs, including the European Union, Food and Agricultural Organization of the United Nations (FAO), World Food Programme, French Development Agency, the United Nations Population Fund, and USAID. This coordination will continue throughout the life of this project.

V. KEY RISKS

A. Overall Risk Rating and Explanation of Key Risks

38. The overall risk of the project is Substantial. The technical design of the project will include the provision of a new gender‐, child‐, and nutrition‐sensitive component that will require delivery of a new set of initiatives and collaboration with new institutional partners. These will require active engagement of new partners, notably ministries with responsibilities for health, ECD, and nutrition (MIGEPROF,

13 “Revision of the Social Protection Sector Financing Strategy” Stephen Hitimana, the GoR, June 2016.


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MINISANTE, and the Ministry of Agriculture). Moreover, the project will be financed through an IPF, which is a new financing modality for the implementing agencies. The new institutional and human capacities required to manage and implement an IPF in the sector therefore poses risks to timely and effective project implementation. Elaborated below are risks rated as Substantial:

(a) Institutional capacity for implementation and sustainability. There are a number of institutional and sustainability risks to the program, including the shift from a DPO to an IPF, which requires stronger FM and fiduciary support at the central and local levels. While there exist two SPIUs within MINALOC, this is the first IPF project that is being implemented in the social protection sector. To mitigate risks to the PDO, a gap analysis has been undertaken to identify capacity needs. The project will deploy TA to fill identified gaps. Capacity enhancement will need to be undertaken at both the central and local levels. With the introduction of a variety of nutrition‐sensitive interventions, the project will need to work with, among others, the newly established NECDCP. This will require both capacity building for the new staff and stronger coordination mechanisms between LODA and the NECDCP on one hand, and with other actors in the health, nutrition, and ECD sectors, on the other hand.

(b) Fiduciary risk. The fiduciary risk (combined FM and procurement risk) is Substantial. According to the World Bank Policy and Directive on IPF, the fiduciary arrangement is acceptable as appropriate fiduciary risk mitigating measures are in place. The fiduciary risk could be lowered during the project implementation after effective implementation of mitigating measures detailed in annex 2. The complexity of delivering low‐value, high‐volume transactions at decentralized levels with variable and mixed public financial management (PFM) capacities poses a risk to the effective and efficient achievement of the PDO. The lack of adequate human resource capacity effectively to absorb workload generated by the project and meet the FM standards and delayed funds flows are areas of weakness needing improvements. Many implementing districts’ financial audit opinions are qualified or adverse and reveal internal control weaknesses. Similarly, lack of adherence to procurement timelines, guidelines, and standards could jeopardize the capacity of the project to meet its objectives. The primary implementing agency, LODA has an Audit Unit and a Compliance Unit. The internal audit function does not have good capacity and shall be strengthened to operate effectively. To this end, the project design includes robust capacity building and TA support for maintaining the required fiduciary oversight as detailed in annex 2.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analysis

39. Component 1 is expected to strengthen and expand coverage of the VUP by providing DS to 105,500 households, improving coverage of cPW to 88 percent eligible beneficiaries (141,361 households), and rolling out ePW to 75,000 households.14 The VUP has been recently redesigned to address design issues and achieve the targets related to the reduction of poverty and malnutrition. The economic analysis simulates the expected benefits from improvements in the overall effectiveness of the program in terms of coverage, timeliness of payments, and adequacy of PW transfers. Expected cost and

14 These numbers could be revised and accordingly updated following Government guidelines.


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benefits are analyzed for the three safety net components—DS, cPW, and ePW.

40. Simulation results assume full coverage of Ubudehe Categories 1 and 2 according to the previous six‐category classification. Simulating all three of the expected improvements (coverage, timeliness, and adequacy) results in an estimated reduction in the extreme poverty rate by 4 percentage points, from 16 percent to 12 percent, and overall poverty by 5 percentage points from 38.5 percent to 31.3 percent. Among beneficiaries, extreme poverty declines to 1.3 percent and total poverty to 6.6 percent.

41. Benefit‐cost ratios of the revised VUP show that the program is cost‐effective. Simplified benefit‐cost ratios for the VUP and each of its components, where the benefit is the reduction in the poverty gap due to the transfer and the cost is the total amount spent on the program, show that the VUP is cost‐effective. In Rwanda, for every Rwandan franc spent in the VUP, the poverty gap is reduced by RWF 0.7. This is well above regional averages of 0.2.

42. On Component 2, there is robust evidence of considerable economic returns from investing in young children’s health, nutrition, and cognitive development. International evidence clearly suggests that social protection programs can be designed and implemented to make significant contributions to accessing services and addressing core child development areas. Interventions aimed at helping mothers (for example, breastfeeding promotion, education about complementary feeding, provision of vitamins and micronutrients) have had fairly modest impacts on stunting, although they have had impacts on child morbidity and mortality. Moreover, scaling up these ‘nutrition‐sensitive’ interventions have also proven to be a challenge, although some countries have managed to do so with impressive results, including, most recently, Peru and Senegal. These interventions are, however, relatively inexpensive, and the impact of stunting on income is sufficiently large to make nutrition‐specific programs a potentially worthwhile investment (Galasso et al. 2017).

43. BCC can improve nutrition outcomes by changing nutrition practices through education, counseling, and social media. The body of literature on the effectiveness of BCC to improve women’s dietary practices during pregnancy and lactation, improving breast‐feeding practices, and complementary feeding practices points to models with successes in uptake of the behavior promoted.

44. International evidence shows that livelihood interventions can yield some positive outcomes, lifting consumption, with high social rates of return. The review of international evidence points to some beneficial effects derived from this type of intervention. Productive assets, especially related to agriculture, can improve households’ resilience, positively affecting their ability to save and increasing their incomes and consumption.15 A randomized evaluation of BRAC’s ultra‐poor program in Bangladesh found beneficial effects on poor women, improving their self‐employment and labor market participation and leading to an increase of 36 percent in their average annual income.16 Similarly, Abdul Latif Jameel Poverty Action Lab (J‐PAL) has found that a comprehensive graduation model encompassing productive asset transfers, technical skills training, consumption support (temporary cash or food transfers), financial education, home visits, and health education, can effectively help the ultra‐poor to shift from their vulnerability status. Positive outcomes include consumption increases of 7.3 percent in Bangladesh, 16.4

15 Andrews, Hsiao, and Ralston. 2017. “The Impacts of Safety Nets in Africa ‐ How Can They Contribute to Development Objectives?” World Bank, Washington, DC. 16 Bandiera, Burgess, Das, et al. 2011. “Asset Transfer Programme for the Ultra‐poor: A Randomized Control Trial Evaluation,” CPFR Working Paper.


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percent in Ethiopia, 13.6 percent in India, and 10.2 percent in Pakistan, while no significant impact was observed in Peru and Honduras.17

B. Technical

45. The project’s technical foundation rests on solid analytical work, drawing from experience with cash transfer programs in Rwanda and globally, as well as from the literature, lessons, and analysis on gender‐, child‐, and nutrition‐sensitive social protection interventions.

46. Global evidence reveals that social safety nets play a powerful role in combating poverty and inequality as well as contributing to improved human capital outcomes. For example, in Ethiopia, the national safety net program helped cut the poverty rate by 6 percentage points; in Kenya, a food‐for‐work program helped raise agricultural productivity by 52 percent; and in Brazil, the large safety net program, Bolsa Familia, reaches close to 25 percent of the population and has contributed to dramatic reductions of poverty and inequality. Globally, safety net programs have an unambiguous impact on access to education and health and documented impacts on human development outcomes.18 Three lessons from this global experience have guided the design of this project: (a) the importance of including cash transfers as part of a national social safety system; (b) the value of using accompanying measures to encourage investments in human capital and productive activities; and (c) the key role played by well‐developed operational service delivery instruments such as a household registry, a targeting system, and functional service delivery subsystems (including MISs, grievance and redress mechanisms, and payment platforms).

47. The design of this IPF is also built on a decade of engagement in the social protection sector in Rwanda and an accompanying body of analytical and technical work. This includes nine years of World Bank DPOs; the GoR implementation of a range of safety net interventions, including the flagship VUP; support from UNICEF, notably in the areas of child sensitive social protection; and sectoral support from DFID. Substantial Rwanda‐specific analytical work has informed the design, including a review of existing social assistance programs; economic and financial analysis within the social protection sector; impact evaluations, beneficiary assessments, and gender assessments of the flagship VUP safety net program; poverty assessments; and tailored short‐term institutional analyses, including of volunteer workforce profiles. These analyses have informed the latest policy orientation and program design, including on implementation arrangements, transfer sizes, payment modalities, and co‐responsibilities. Notably, the GoR is revising the VUP design to reinforce strong design elements and address issues raised through this analytical work.19 Specifically, major concerns being addressed include (a) improving the VUP PW inclusion of extremely poor households with moderate and extreme labor constraints, notably those with caring responsibilities for children or the disabled, which are often female‐headed households; (b) raising the number of VUP PW employment days; (c) improving VUP payment delivery regularity and reliability; (d) introducing relevant and appropriate livelihoods opportunities; and (e) strengthening beneficiary awareness of rights and responsibilities, including awareness of grievance and redress mechanisms.

17 J‐PAL (Abdul Latif Jameel Poverty Action Lab) and IPA (Innovations for Poverty Action) Policy Bulletin. 2015. “Building Stable Livelihoods for the Ultra‐Poor.” Cambridge, MA: Abdul Latif Jameel Poverty Action Lab and Innovations for Poverty Action. 18 Bastagli et al. 2016. “Cash Transfers: What does the Evidence Say? A Rigorous Review of Program Impact and the Role of Design and Implementation Features.” ODI. 19 Gender Sensitivity Analysis conducted in 2014; EICV4 social protection thematic report; 2014 impact evaluation (Hartwig 2014); the graduation study (Ayliffe et al. 2015); FAO study on rural women’s economic empowerment and social protection (FAO 2015).


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48. This social protection project is part of an overall program designed to combat chronic malnutrition and, together with a new nutrition project, a new agriculture project, and a dedicated program of analytical work, will form the core of the World Bank’s support to this agenda. The project design has benefited from joint missions and draws on a considerable amount of analytical work. This includes analysis of the Rwanda DHS data by the World Bank and USAID on the determinants of chronic malnutrition among children under two and under five and a costing analysis of interventions that could be carried out to address chronic malnutrition. The data analysis, led by the Health Nutrition and Population team, is being twinned with TA and benefits from support from the Rapid Social Response and Japan Trust Fund grants. This is informing core elements of the project, including in BCC and institutional support to MINALOC, notably for the newly established NECDCP. The overall policy dialogue and design elements for both the social protection and health projects are informed by the latest global evidence and good practice on investing in vulnerable families during the first 1,000 days of a child’s life through both supply‐ and demand‐side interventions.20

49. Citizens and NGOs have played an important role in the IPF design process and will continue to play a role during implementation. Citizens’ voices were captured through field trips by the project design team to have direct interactions with targeted beneficiaries, an assessment of needs and design options for local proximity advisory services, and workshops with stakeholders from civil society organizations. Furthermore, the Government, through LODA, has entered into partnership with civil society organizations for delivering certain social protection services, with an intention to deepen this type of engagement.

50. Gender aspects have been considered in the design of this project. The VUP has certain long‐standing features that promote women’s economic empowerment and the new ePW model is a deliberate response to the limitations of the cPW model, which was shown to be gender‐blind in an important way, in that it does not consider reproductive and caregiver work, the burden of which is borne primarily by women. The meaning of ‘work’ within cPW is confined to physical labor on agricultural and infrastructural projects, and the working schedule—intensive work, five days a week for a period of weeks/months at times, distant worksite with payments made only after two weeks’ work—is often incompatible with participants’ caring responsibilities within the household. Gender‐related indicators are included in the Results Framework and will be monitored and reported on by LODA.

51. A gender audit21 found that, because of these limitations, the participation of female caregivers in cPW sometimes leads to negative effects on the care and nutrition of young children and/or an over burden of work for the women themselves. More recent qualitative research (Ayliffe et al. 2015a, 2015b; FAO 2015; FATE Consulting 2015) has highlighted the participation challenges faced by moderately labor‐constrained households, often single‐worker, female‐headed households with caring responsibilities. There are many documented cases of such households self‐excluding from cPW for one of the following reasons: with no alternative source of income, such households cannot wait two weeks for PW payment and opt for agricultural work that pays daily, despite lower wages; the PW is too physically demanding; or the work schedule is incompatible with their caring responsibilities.

52. In response, the GoR designed ePW for moderately labor‐constrained households, which will

20 See, for example, the Lancet 2016 series, information from James Heckman’s research, and information on the World Bank’s Early Years website. 21 Gender Audit of VUP Public Works, FATE Consulting, UNICEF, 2013.


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offer a more flexible year‐round work schedule, more compatible with daily wage work and caring responsibilities, and new types of work. The envisaged operation will support innovations in ePW that recognize and value caring work and thereby, both empower female (and male) caregivers and promote the care and nutrition of those for whom they care, especially young children. In particular, it will strengthen and expand the new ePW component and it will support the GoR to actively solicit feedback from women and men on how well innovations are responding to their needs and how design could be further improved.

C. Financial Management

53. An FM assessment of LODA, MINALOC, and participant districts was undertaken. The objective of the FM assessment was to determine whether the existing FM arrangements (a) are capable of correctly and completely recording all transactions and balances relating to the project; (b) facilitate the preparation of regular, accurate, reliable, and timely financial statements; (c) safeguard the project’s assets; and (d) are subject to auditing arrangements acceptable to the World Bank. The assessment complied with the FM Manual for World Bank‐Financed Investment Projects effective on March 1, 2010, the World Bank Policy and Directive on Investment Project Financing, and the FM assessment and risk rating principles.

54. The arrangements for oversight and accountability are considered acceptable according to the World Bank Policy and Directive on Investment Project Financing. They consist of management oversight; the internal oversight bodies (Internal Audit, Audit Committee); the external oversight bodies (the Office of the Auditor General [OAG]) and the Parliament who reviews the OAG’s audit reports and approves the GoR budget, including that of the project, and internal control procedures and systems in place. Monthly financial reports are prepared by the implementing entities and submitted to the Ministry of Finance and Economic Planning (MINECOFIN) for review. Nevertheless, risk areas were identified related to (a) delayed funds flow to the beneficiaries, (b) staffing gap to absorb workload generated by the project, (c) unreliable reporting and reconciliation, and (d) inadequate and delayed implementation of the OAG recommendations and qualified and adverse audit opinion at districts revealing internal control weaknesses. The FM risk is Substantial for these reasons. Detailed risk assessment and mitigation measures in the risk table in annex 3 will help address the risks identified. The mitigating measures include the following:

(a) The recruitment of additional FM staff—two FMSs whose terms of reference (ToRs) will require World Bank ‘no‐objection’ (one qualified Association of Chartered Certified Accountants [ACCA]/Chartered Public Accountant [CPA] or equivalent with experience, one FMS with master’s or bachelor’s degree and relevant experience); one Internal Auditor; and one Financial Compliance Monitoring Specialist with ToRs to be agreed with the World Bank. Because there is no market analysis in the procurement strategy on qualified ACCA or CPA, this can be revised during the implementation along with the Procurement Plan, to allow for International Consultant contracts if needed. These staff should be on board within three months of project effectiveness.

(b) The preparation of detailed FM and disbursement guidelines for the project acceptable to the World Bank.

(c) Capacity building on FM and internal audit. The additional FM staff will complement the


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existing FM staffing at the LODA SPIU.

D. Procurement

55. Procurement for the proposed project will be carried out in accordance with the ‘World Bank Procurement Regulations for Borrowers under Investment Project Financing’, dated July 1, 2016, and hereafter referred to as ‘Procurement Regulations’. The project will be subject to the World Bank’s Anticorruption Guidelines, dated July 1, 2016.

56. The project largely follows the community‐driven development approach and procurement by the communities will follow the ‘Procurement Regulations for IPF Borrowers’, July 2016, paragraph 6.52 and annex XII ‐ Selection Methods paragraph 6.9 and 6.10. Community residents will be hired to carry out small works and perform services under cPW and ePW. The procurement arrangement at the community level and oversight mechanism, such as citizen engagement and social audit and accountability, will be detailed in the Project Procurement Guidelines acceptable to the World Bank and in line with ‘Guidance Note for Design and Management of Procurement Responsibilities in Community‐Driven Development Projects’, dated March 15, 2012. The fiduciary assurance shall come from citizen engagement, disclosure at the community level, and social audit.

57. The Project Procurement Strategy for Development (PPSD) was prepared as part of project preparation by the Borrower with the assistance of the World Bank team, which looked at the market, procurement risks, and procurement options and sets out the selection methods to be followed by the Borrower for major activities during project implementation in the procurement of goods, works, and non‐consulting and consulting services financed by the project. The Procurement Plan is part of the PPSD and will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

58. The proposed project will use Systematic Tracking of Exchanges in Procurement (STEP), a planning and tracking system that will provide data on procurement activities, establish benchmarks, monitor delays, and measure procurement performance.

59. A procurement capacity and risk assessment has been carried out by the World Bank for MINALOC, LODA, and sample districts and sectors to review the organizational structure for implementing the project and the interaction between the project’s staff responsible for procurement duties and management of the agencies. The Procurement Risk Assessment and Management System (PRAMS) has been finalized. The major procurement risks are lack of experience in World Bank Procurement Regulations, which can potentially lead to noncompliance, lack of adequate procurement staff in LODA, weak contract management capacity, and limited supply markets. Risk mitigation measures are the recruitment of one additional Procurement Specialist under the LODA SPIU, project procurement guidelines, a series of trainings conducted jointly by LODA and the World Bank, and engagement with market providers. Based on the assessment and taking note of the roles and responsibilities of the agencies responsible for procurement, the procurement risk rating is Moderate.

E. Social (including Safeguards)

60. World Bank policy OP/BP 4.12 (Involuntary Resettlement) is the only social safeguard policy triggered by the project in light of social risks from proposed activities. Anticipated social risks include


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loss of land, loss of assets, loss of crops and trees, loss of economic business or means of livelihoods, child labor, gender‐based violence, sexual abuse, and escalation of STD/HIV especially during expended PW. To ensure proper assessment and mitigation of the potential adverse environmental and social impacts of activities under the project, an Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) have been prepared for guiding the implementing agency on how to address any environmental and social impacts of project investments. Each subproject will be screened, and if Resettlement Action Plans (RAPs) are found to be necessary, these will be prepared, cleared, disclosed, and implemented before the commencement of civil works, in accordance with World Bank OP 4.12. The subprojects safeguards instrument (RAPs, Environmental and Social Management Plan [ESMP]) will be prepared and implemented by the implementing agency, LODA.

61. LODA has experience in working in applying World Bank safeguards policies and its SPIU hosts qualified and experienced staff including Environmental and Social Safeguards Specialists. The two Safeguards Specialists will be responsible for supervising the implementation of safeguards instruments and ensure that activities comply with the ESMF/RPF and, if necessary, an ESMP/RAP is developed as appropriate.

62. The World Bank task team will regularly include environmental and social development specialists during implementation support missions to supervise the implementation of the safeguards instruments (ESMF, RPF).

63. Citizen engagement is already established in the VUP: (a) it uses a community‐based approach to targeting, in which citizens actively participate; (b) it has established a CMS that enables citizens to provide feedback on the VUP delivery and to raise complaints by phone or SMS (supported under the previous DPOs); (c) several programming innovations supported under this IPF (ePW and the caseworker model) respond directly to citizen feedback about shortcomings of the previous design; (d) the SWG subcommittees include NGOs as active partners in social protection policy dialogue; (e) the recent establishment of a partnership with NGOs for the VUP service delivery at the local level provides a potential entry point for reinforcing citizen engagement; and (f) there are various existing mechanisms for state‐citizen engagement at the local level, such as community councils (inteko z’abaturage), monthly community works (umuganda), and district accountability week.

64. On the other hand, there is scope to strengthen citizen engagement further in this operation:

It is not clear to what extent the CMS is being actively used as there are no data available on the number of complaints received and there has been no tracking of citizen knowledge of their social protection entitlements (a necessary underpinning of an effective grievance mechanism).

Much of the citizen engagement around the review of programming and proposal of innovations has been carried out by the GoR and partners (including the World Bank), at an early stage in the design process. It will be important that the GoR follows this through by engaging citizens in the final stage of design, and during initial testing of innovations it actively solicits feedback on whether they are responding to citizen needs and priorities. For example, the IPF will support a process evaluation of programming innovations, with a substantial citizen feedback component.


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Some NGOs report challenges in engaging meaningfully through the SWG subcommittee system. There are efforts under way to strengthen NGO capacity to engage, and there may also be scope to improve communications around the subcommittees and/or to develop complementary mechanisms to strengthen civil society engagement.

Further, review of home‐grown mechanisms to promote increased citizen engagement around the VUP delivery will be carried out during implementation to further increase engagement and performance of existing mechanisms.

F. Environment (including Safeguards)

65. The proposed project will support Rwanda’s social protection programs through public works projects in 270 sectors for cPW and 300 sectors for ePW of the 416 sectors in the country. The project will finance subprojects involving the execution of various PW activities in numerous sites that will potentially affect the environment. One of the key outputs of the project is to increase coverage of cPW and ePW. These works will include subprojects on the construction of road drainage, settlements, rehabilitation and upgrading of access roads, and rural water supply infrastructure. The environmental impacts will vary in scale and magnitude and will be subproject site specific.

66. The project triggers OP/BP 4.01 (Environmental Assessment), OP/BP 4.04 (Natural Habitats), and OP/BP 4.11 (Physical Cultural Resources). Physical cultural resources are not yet fully known, but some PW may be carried out in the influence area of some sites, such as graves that could be located in the right‐of‐way. Initial environmental and social impact assessments have indicated that the road construction and rehabilitation works will involve cutting, clearing of vegetation, felling the trees along the road, and replanting of trees to stabilize slopes as well as reduce soil erosion rate.

67. Although the PW project sites are not known, the ESMF includes a review and approval process that will screen the subprojects for site‐specific environmental impacts and propose the appropriate mitigation actions and policy instruments. The ESMF makes provisions, however, in the subproject screening process to clearly define these impacts and propose the preparation of the corresponding management plans, including a chance find procedure.

68. The project has been assigned Environmental Assessment Category B as it will finance subprojects involving the execution of various PW activities in numerous sites that will potentially affect the environment. The project will increase access and coverage of social services by implementing various PW. The types of project implemented under the VUP PW are characterized by their labor intensity and will include access road construction and rehabilitation, urban drainage, marshland reclamation, terraces’ construction, schools’ and organized settlements’ construction, and rehabilitation and construction of water and sanitation networks. The exact subproject implementation areas not yet known; however, the ESMF has proposed a project screening procedure that provides guidance for the analysis of potential impacts in the context of the location of subproject implementation.

69. In the absence of sufficient information on specific project implementation sites, the client has prepared an ESMF that provides a subproject screening and approval process, which entails guidelines on conducting site‐specific environmental assessments. The screening procedure gives a description of Category A and other high‐risk subprojects, to be automatically excluded from the review process. To address the project/subproject potential negative environmental impacts, the ESMF also provides


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guidance on identification, assessment, and mitigation of the impacts.

G. World Bank Grievance Redress

70. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project‐level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project‐related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit http://www.inspectionpanel.org.

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VII. RESULTS FRAMEWORK

Results Framework COUNTRY : Rwanda

Strengthening Social Protection Project Project Development Objectives

To improve the effectiveness of Rwanda’s social protection system, notably the flagship Vision 2020 Umurenge Program (VUP), for targeted vulnerable groups. Project Development Objective Indicators

Indicator Name Core Unit of Measure

Baseline End Target Frequency Data Source/Methodology Responsibility for Data Collection

Name: % of all eligible households covered by the VUP (ePW, cPW and DS) in targeted sectors

Text 67.00 70.00 semi‐annual

LODA MEIS

LODA

% of eligible households covered by the VUP PW in targeted sectors


LODA MEIS

LODA

% of eligible Ubudehe 1 households covered by the VUP DS


LODA MEIS

LODA

Description: This indicator will use the number of HH in Ubudehe 1 eligible for VUP in eligible sectors as the denominator and the number of HH receiving direct support


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or classic or expanded public works as the numerator.

Name: % of cPW households reaching the minimum number of workdays of cPW employment (in the reporting period)

Text 32.00 50.00 annual

LODA MEIS

LODA

Description: The minimum number of workdays of cPW employment is determined on an annual basis and will have to be adjusted accordingly

Name: % of eligible ePW households that receive their full ePW entitlement (in the reporting period)

Text Not Available

60.00 Annually

LODA MEIS

LODA

Description: Percent of ePW households that receive their full 3 monthly payment within the reporting period. Baseline data are not available for ePW as this modality has not been rolled out.

Name: % of eligible DS households that receive their full DS entitlement (in the reporting period)

Percentage 0.00 60.00 quarterly

LODA MEIS

LODA

Description: percent of DS households that receive their full 3 monthly payment within the reporting period

Name: % of VUP cPW beneficiary payments delivered on time

Percentage 0.00 50.00 semi‐annual

LODA MEIS

LODA


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Description: cPW payments are due 10 working days after the end of each 10 day work cycle.

Intermediate Results Indicators



Name: Beneficiaries of social safety net programs

✔ Number 1012500.00

1452500.00

semi‐annual

LODA MEIS

LODA

Beneficiaries of Safety Nets programs ‐ Female (number)

Number 506250.00 726250.00 semi‐annual

LODA MEIS

LODA

Beneficiaries of Safety Nets programs ‐ Unconditional cash transfers (number)

Number 189000.00 211000.00 semi‐annual

LODA MEIS

LODA

Beneficiaries of Safety Nets programs ‐ Cash‐for‐work, food‐for‐work and public works (number)

Number 540000.00 925000.00 Semi‐annual

LODA MEIS

LODA

Description: This indicator measures the number of individual beneficiaries covered by safety nets programs supported by the Bank. Safety nets programs intend to provide social assistance (kind or cash) to poor and vulnerable individuals or families, including those to help cope with consequences of economic or other shock.


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Name: Average annual number of days of work of cPW beneficiaries

Number 64.00 70.00 Annual

LODA MEIS

LODA

Description:

Name: Number of community/home‐based childcare ePW supervisors trained

Number 0.00 2500.00 annual

District Reports

LODA

Description:

Name: Number of community/home‐based childcare groups operational


District reports

LODA

Description: This indicator measures the number of ePW community/home‐based child care groups operation in each village

Name: Number of community meetings where behavior change parenting sessions are delivered


District reports

LODA

Description: This indicator measure the number of community meetings where BCC sessions were delivered in cell general assembly meetings


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Name: Mass media campaign implemented

Yes/No N Y LODA annual report

LODA

Description:

Name: E‐payments and workflow system piloted


LODA

Description: This indicator describes the introduction of new systems to streamline and automate payments requisition and funds transfers to beneficiaries for at least DS component

Name: LODA MEIS includes functionality for reporting on ePW and cPW timelineness


LODA

Description: This indicator describes the process of upgrading the LODA MEIS to enable the automated reporting on timeliness of ePW and cPW payment delivery

Name: Number of local government staff trained on the Citizens' Monitoring System (CMS)

Number 0.00 892.00 Annual

District reports

LODA

Description: This indicator monitors the number of district and sector staffs trained on CMS

Name: Grievances registered related to delivery of project

Text Not Available

60 semi‐annual LODA MEIS LODA


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benefits addressed (%)

Description: The CMS is not yet operational, thus baseline data are not available.

Name: Percent of eligible households in Ubudehe 1 with children <2 years receiving child sensitive cash transfer grants

Percentage 0.00 60.00 Annually

LODA MEIS

Project districts

Description: This indicator will measure the percent of Ubudehe 1 households in eligible sectors with children up to 2 years of age receiving: (i) a proposed nutrition support grant; (ii) ePw; or (iii) cPW plus home‐based childcare. This is intended to measure access to income support.


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Target Values Project Development Objective Indicators FY

Indicator Name Baseline End Target

% of all eligible households covered by the VUP (ePW, cPW and DS) in targeted sectors 67.00 70.00

% of eligible households covered by the VUP PW in targeted sectors 66.00 70.00

% of eligible Ubudehe 1 households covered by the VUP DS 100.00 100.00

% of cPW households reaching the minimum number of workdays of cPW employment (in the reporting period)

32.00 50.00

% of eligible ePW households that receive their full ePW entitlement (in the reporting period) Not Available 60.00

% of eligible DS households that receive their full DS entitlement (in the reporting period) 0.00 60.00

% of VUP cPW beneficiary payments delivered on time 0.00 50.00

Intermediate Results Indicators FY


Beneficiaries of social safety net programs 1012500.00 1452500.00

Beneficiaries of Safety Nets programs ‐ Female (number) 506250.00 726250.00

Beneficiaries of Safety Nets programs ‐ Unconditional cash transfers (number) 189000.00 211000.00


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Beneficiaries of Safety Nets programs ‐ Cash‐for‐work, food‐for‐work and public works (number)

540000.00 925000.00

Average annual number of days of work of cPW beneficiaries 64.00 70.00

Number of community/home‐based childcare ePW supervisors trained 0.00 2500.00

Number of community/home‐based childcare groups operational 0.00 3375.00

Number of community meetings where behavior change parenting sessions are delivered 0.00 1300.00

Mass media campaign implemented N Y

E‐payments and workflow system piloted N Y

LODA MEIS includes functionality for reporting on ePW and cPW timelineness N Y

Number of local government staff trained on the Citizens' Monitoring System (CMS) 0.00 892.00

Grievances registered related to delivery of project benefits addressed (%) Not Available 60

Percent of eligible households in Ubudehe 1 with children <2 years receiving child sensitive cash transfer grants

0.00 60.00

.


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ANNEX 1: DETAILED PROJECT DESCRIPTION

COUNTRY: Rwanda Strengthening Social Protection ‐ Rwanda

1. The project has been designed to improve the social safety net by: (a) Improving the design of VUP to address service delivery issues, specifically to improve the coverage of the poor, the timeliness of payments and the adequacy of benefits of both DS and PW; (b) enhance the effectiveness of the VUP by ensuring its linkage to human capital investments, particularly among households with young children to address risks of malnutrition and delayed development; and (c) supporting management capacity, human resource capacity and systems at both central and local government levels. It will be delivered through the following three components:

Component 1: Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge Program (VUP) cash transfers

2. The VUP is at the core of the Social Protection sector, and evidence points to VUP’s positive impacts at the household level as well as scope to further strengthen them. Analytical work22 suggests that stronger impacts of VUP can be expected if: i) the timeliness and predictability of DS and PW payments is improved; ii) coverage of PW is extended to a higher proportion of eligible households (currently only around 49 percent of eligible households participated in PW23 in 2016/17); iii) PW are better adapted to the needs of labor‐constrained households by providing more accessible job types and providing higher transfers for a sustained period, by offering a higher number of days work; iv) DS targeting criteria is expanded, or a separate program is designed, to include more vulnerable households, specifically those with limited labor and caring responsibilities; and v) linkages to key services and to information on entitlements are strengthened for vulnerable and marginalized households.

3. The VUP has been recently re‐designed to respond to these findings and to emerging national priorities. This component will focus on supporting key innovations to safety net components as well as improvements in the overall effectiveness in terms of coverage, timeliness of payments, and adequacy of PW transfers.

4. The operation will support: i) DS ‐ continuation of DS support to households with no labor capacity and its expansion to moderately labor‐constrained households with heavy caring responsibilities; ii) cPW ‐ progressive improvements in the coverage of cPW eligible households and the adequacy of transfers; iii) ePW supporting extension of this innovative new subcomponent that targets moderately labor‐constrained households with caring responsibilities; and iv) a new nutrition support grant program twinned with another World Bank financed Nutrition project currently under preparation and targeted to vulnerable households. The subcomponent (iv) will be supported through a potential grant co‐financing out of a MDTF for Achieving Nutrition Impact at Scale with an amount of around US$10 million. As and when the MDTF grant is available, the World Bank will process this through Additional Financing to this project. IDA financing will cover 40 percent of the costs of the VUP safety net: DS, cPW and ePW. These

22 Ayliffe et. al. 2015a, 2015b; FAO 2015; and FATE Consulting 2013 and 2015. 23 49 percent applies to all eligible households in Ubudehe Category 1 nationally. In the VUP operational sectors (240 sectors), coverage was 67 percent of the eligible (2016/17)


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costs include: DS cash transfers; cPW and ePW wages; non‐wage direct costs of PW, including capital costs of cPW; and associated administrative and incremental operating costs.

(a) DS will continue to be provided to 95,846 households in Ubudehe category 1 without labor capacity and the timeliness and predictability of payments will be improved. It has been recognized that for households with only one worker who has caring responsibilities for a person with a disability, participation in PW is incompatible with high‐quality care of dependents. Given this, it has been agreed that the additional category of labor‐constrained households (11,000 households) will, under the proposed project, be included within the DS component. In the absence of any maternity leave or childcare provisions for babies/toddlers, it is further recognized that one worker households with a child under the age of two (68,000 households) face similar challenges in providing care while participating in PW.

(b) The proposed project will also support continuation of cPW to the 128,000 households currently enrolled and expand it to a total of approximately 141,361 by the end of the operation (in 270 sectors), with progressive improvements in: a) percentage of eligible households that are covered (to 88 percent up from 67 percent currently); b) timeliness of payments; and c) average number of days of work offered, in order to increase the adequacy of total annual transfers (up to 80 days from 66 at baseline).

(c) The proposed project will further support a major extension of the new ePW subcomponent to reach 75,000 households by the end of the operation (up from 2,757 currently, in 30 sectors). The ePW responds to the identified challenges with cPW by offering year‐round, multi‐year, flexible, part‐time work opportunities to moderately labor‐constrained households caring for children, though currently only in road maintenance. Home‐based childcare will be launched as a new type of ePW, with resultant synergies to the nutrition and ECD objectives of the project. Other types of ePW that are aligned with the relevant guidelines may be added later, including: a) work on community kitchen gardens; b) greening and beautification; c) support services in schools, clinics and other public buildings; d) construction of improved stoves; and e) work on the plots of vulnerable highly labor‐constrained households. The operation will enable deepening of the coverage of ePW in each sector to 250 households or between 70‐80 percent; and expansion of geographical coverage from the current 30 sectors to 300 sectors (including all 270 cPW sectors) by the end of the project period. Financing will cover: ePW wages; non‐wage direct costs; and associated administrative costs. Non‐wage costs of ePW will not exceed 30 percent of total direct costs and will consist mainly of goods, such as tools for road maintenance or toys and books for home and community‐based childcare centers.

(d) Minor refurbishments essential to the provision of quality community and home‐based childcare required as per MIGEPROF’s guideline will also be funded. The equipment will likely include a hand washing station for each home‐based care setting and latrine improvement for proper hygiene and sanitation where these are needed.


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Component 2: Enhancing access to human capital and economic inclusion

5. The GoR has established reducing child chronic malnutrition as a national priority and recently approved a new ECD policy that calls for social protection to contribute to meeting ECD goals. The prevalence of stunting in children under five years of age fell considerably from 2005‐2015, from 51 percent to 38 percent (DHS 2014/15); however, the national average is still alarming and remains above the World Health Organization (WHO) high severity threshold of 30 percent. Also, the reduction in stunting was slower among children from poor households. The VUP, as the main social protection intervention in Rwanda, is now tasked with ensuring a focus on nutrition and child sensitive social protection. This mandate is reflected in the adoption of a new program document of the VUP, notably including the introduction of the e‐PW scheme described above. In addition, Rwanda has just established the NECDCP which is tasked with coordinating efforts at combating malnutrition and fostering early childhood development from both the Government and DPs.

6. The GoR is currently exploring alternatives for better aligning nutrition‐sensitive social protection interventions. It is well documented that cash transfers provide an opportunity to deliver nutrition sensitive social protection services to vulnerable families with pregnant women and children under 2 years of age. Global evidence points to the important role of cash transfer programs in promoting early childhood nutrition, increasing attendance to growth monitoring and promotion controls, and providing a steady source of income for poor households. In addition, social protection programs, if linked with appropriate BCC activities, can promote the adoption of better practices to improve nutrition and hygiene habits, which helps prevent the occurrence of respiratory and infectious that contribute to stunting in young children. MINALOC is interested in adopting different measures to improve the responsiveness of the VUP to childcare, nutrition and hygiene practices.

7. Enhancing livelihoods is another GoR policy priority. This entails strengthening the livelihoods of extremely poor households and their resilience to shocks to the extent that they are able to sustain themselves out of extreme poverty in the medium to long term, without the support of a core social protection program. The GoR is currently considering new initiatives to promote livelihoods of extremely poor households, including testing a caseworker referral system, productive asset transfers, and enhancing coordination with other service providers. This package aims to ensure the access to a comprehensive package of services for the extreme poor. Within this framework and subject to a prior assessment, the project could finance the expansion of new initiatives to promote livelihoods, including support to caseworkers’ expansion and productive asset transfers to targeted families.

8. Component 2 will improve the contribution of the Social Protection sector to boost human capital creation and economic inclusion services, with a focus on combating chronic malnutrition and improving child development goals, as well as promoting livelihoods through skills development, access to services, and resilience. This component will adopt a “learning by doing” approach to scale up innovative interventions to improve resilience in poor households. It will do this through a three‐step process of designing a well‐developed intervention (including detailed implementation guidance), carrying out a process evaluation of the intervention (supported under Component 3 or through other DPs), and scaling up based on recommendations of the process evaluation. The delivery of these components will make use of innovative public‐private partnership, including the partnership with service providers and linkages with and referral to other programs, leveraging MINALOC and LODA’s cross


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sectoral mandate. This will both test new models and provide support through quality enhancements and accompanying measures to the cash transfers under Component 1.

9. Component 2 would also support households to access human capital and productive services by delivering an integrated package of interventions:

(a) Nationwide sensitization and community mobilization. This subcomponent has three main objectives: a) build awareness and understanding of issues which affect potential for human capital development and resilience to extreme poverty (e.g. health and hygiene; nutrition; basic animal husbandry, WASH; b) ensure households understand their rights and responsibilities and empower communities to hold duty bearers to account for the delivery of high‐quality services and the appropriate use of social protection resources; and c) build public understanding and awareness of VUP objectives, modalities and impacts. Sensitization and community mobilization is a longstanding element of the VUP, but its implementation has hitherto been limited by capacity gaps at local level. Activities will include:

(i) Coaching and mentoring, as well as information dissemination through community meetings and training

(ii) Implementation of BCC: national communication campaigns to promote proper nutrition through mass media such as radio will be implemented. The campaigns will target pregnant and lactating mothers, CHWs, and local leaders, and will include hygiene, feeding practices, WASH and parenting messages. This will be done in coordination with the nutrition project and the sensitization campaigns developed by the Rwanda Biomedical Center. 24

(b) Improving parenting and childcare services for vulnerable families in targeted communities. The project will provide:

(i) Community level support to households including cognitive stimulation of young children, parenting, appropriate feeding and incentivizing the use of maternal and child health and nutrition services. This support will be provided as a package in conjunction with the new ePW childcare model and potential nutrition support grants. Cooking demonstration sessions will be also rolled out in coordination with community kitchen gardens.

(ii) Quality enhancement and supervision to community and home‐based ePW childcare subprojects. Since home‐based childcare is a new area for the VUP and capacities within GoR district and sector offices are limited, specific training and supervision needs will not be easily absorbed within existing budgets.

24 The Project will follow the guidelines of the Rwanda Biomedical Center, the agency responsible for delivering BCC nationwide. BCC sessions currently include water and sanitation, parenting and other key messages for improving nutrition, as well as material produced in partnership with USAID and other DPs. The Project will build on the existing guidelines and materials to validate them and finance a proposed scale up.


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Therefore, in coordination with MIGEPROF, the project will finance:

Contracting of service providers at national or District level to develop a parenting and community/home‐based care training curriculum and carry out training of trainers;

Contracting and training of part‐time trainers in parenting and community/home‐based care in participating sectors to train and oversee cell‐level supervisors and build capacity of subnational GoR staff;

Contracting and training of cell level supervisors to provide DS to and supervision of parents at the community level and caregivers in each home based care setting.

(c) Enhancing livelihoods. The support to sustainable livelihoods and eventual graduation from extreme poverty is a major policy priority of the GoR. Interventions currently include a combination of asset transfer grants with caseworker support, as well as other services for beneficiaries. The design of the asset transfer and caseworkers’ management system is underway, and the operation will support the strengthening and roll‐out of these interventions that would support sustainable livelihoods and access to economic opportunities. Caseworkers’ guidelines will be developed detailing how caseworkers will operate including how referrals are made to a range of productive and social services appropriate to their needs as households. During FY2017/18, before the start of the operation, GoR will finalize and the Bank will review the design documents of these interventions, including a comprehensive package of asset transfers, caseworkers’ management system and training. As part of the caseworkers’ management system, tools shall be strengthened including training materials for caseworkers and supervisors and establishing decentralised cadres of caseworker trainers. A process evaluation will also be carried out in FY2017/18, and the results of the evaluation will inform the improvement and scaling up of this initiative, notably the asset transfer and caseworker mechanisms.

10. Components 1 and 2 are supporting three innovations, each of which need an approved design, an evaluation of early stage implementation and decisions on program design and funding implications prior to full rollout under the operation. These innovations include: (a) the enhancing livelihoods package, which potentially can include skills training, asset transfers (productive and livestock), and referrals to other productive and social services; (b) ePW childcare, which has a detailed design, remains to be approved by GoR and has not yet been evaluated and (c) the nutrition support grants, which are currently being designed and could potentially be funded through additional financing to this operation subject to availability of the MDTF grant. Other new models could also be considered for support, subject to the same process of design, initial implementation, evaluation and review.

Component 3: Delivery systems, policy and program management

11. This component will build local and national government capacity to implement Components 1 and 2, as well as to improve the larger social protection system in Rwanda. MINALOC and LODA will lead their respective subcomponents, which include the following areas: (a) evidence‐based policy and program development; (b) delivery systems; and (c) institutional strengthening.


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MINALOC

(a) Evidence‐based policy and program development. The Government is embarking on many new and innovative program design changes for the sector. The new NSPS will begin implementation in July 2018. These new strategies will require assessments to monitor and evaluate their progress, and propose design changes. The project will support the following policy/strategy assessments: (a) a mid‐term assessment of NSPS (Dec 2020); and (b) a sample of studies to support implementation of the NSPS. Possible studies may include: enhancing linkages between social protection and agriculture; nutrition and social protection; sustainable graduation; and shock responsiveness. The project will also support training and capacity building of policy makers and civil servants on M&E methodologies for the social protection sector.

(b) Delivery systems. Substantial efforts have gone into designing and improving Rwanda’s social protection system. Notably, the Government has developed a comprehensive iSP‐MIS, which serves as an integrated registry and link to the Ubudehe database (social registry) and other program specific registries as well as the national identification database. Further support is required to operationalize and upgrade these systems for use across the social protection system, and build in further functionality, including ensuring strong coordination to combat malnutrition and foster early childhood development. A few specific elements to be supported include:

(i) Systems Operationalization Support: Based on an assessment of system and capacity needs for hardware and software at national and subnational level, the following may be supported: i) capacity building for supporting roll‐out and maintenance of the iSP‐MIS, as well as refresher training when systems are upgraded; ii) upgraded equipment and software; and iii) a longer‐term maintenance and service contract.

(ii) Systems Design Support: Support for MIS Systems Development for the NECDCP, including possibly linking MISs across various ministries.

(iii) Harmonization and Coordination: Strengthen the SPSWG coordination and reporting mechanisms by recruiting a Social Protection Specialist to coordinate the SWG and training staff.

(c) Institutional Strengthening. The proposed project will finance additional posts in the MINALOC SPIU and TA to the NECDCP, in order to strengthen technical, financial and procurement capacities for implementation of the project. Social protection training will be provided to mid and senior level staff and technical support will be provided to improve program coordination, through training and expertise to develop guidance and systems. Project management costs, including MINALOC incremental operating costs and additional PIU staff, will also be supported through this component.


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LODA

(a) Evidence‐based policy and program development. The VUP will have many new policy and program design changes, including adding complementary services to reduce malnutrition and promote livelihoods. These new programs will require significant design and implementation support, as well as high‐quality M&E. Analytical work will be supported along with expert technical advice to improve VUP monitoring mechanisms, impact evaluation design and implementation. The project will support the following evaluations: a) an impact evaluation of VUP across its core areas (c‐PW, DS, e‐PW), if not funded by other DPs, including reviewing ePW’s impact on nutrition outcomes; b) process evaluations of the three innovative activities (livelihood activities, ePW childcare and the nutrition support grants); and c) training and capacity building of staff M&E methodologies for the social protection sector.

(b) Delivery systems. LODA has various social protection service delivery systems. LODA has developed an updated MEIS and has introduced a grievance and redress system (the CMS). Full operationalization of these systems has not yet occurred, for instance, payments issues have not been fully resolved. Thus, further support is required to operationalize and upgrade these systems for use across the social protection system, and build in further functionality, such as citizen monitoring and payments. Finally, support is required around cross‐sectoral coordination and program harmonization. A few specific elements of support include:

(i) Systems operationalization support:

Systems for grievance and redress: Community outreach, communication and training on the availability of the CMS and training of decentralized staff (particularly at the sector level) on the CMS, contracting service providers around community sensitization, and community mobilization to raise awareness on rights and responsibilities and opportunities.

MISs: Based on an assessment of system and capacity needs for hardware and software at national and subnational level, the following may be supported: i) capacity building for supporting roll‐out and maintenance of the LODA MEIS to District and Sector level, as well as refresher training when systems are upgraded; ii) upgraded equipment and software; and iii) a longer‐term maintenance and service contract.

(ii) Harmonization and coordination:

Development of harmonized criteria and institutional arrangements in the social protection sector, including the design of common targeting, profiling, grievance and payments procedures for core social protection programs (VUP, Genocide Survivors Fund, Rwanda Demobilization and Reintegration Commission) and key complementary services. The project will support training of staff on these guidelines, policies and procedures and monitor implementation.


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Harmonize proximity advisory services in the areas of health, hygiene and nutrition; agricultural production; family support; gender, disability and child protection; and livelihood development. The precise nature of the intervention will be determined through analytical support to be provided through the proposed project, but will likely include a review of what exists, development of harmonized guidelines and training of caseworkers and local government staff on the guidelines.

(c) Institutional Strengthening. Support will be provided to build human resource capacity at all levels: central, district, sector and cell. At central level, the proposed project will finance additional posts in the LODA SPIUs in order to strengthen technical, financial and procurement capacities for implementation of the IPF. Social protection training will be provided to mid and senior level staff; and technical support will be provided to improve program coordination, through training and expertise to develop guidance and systems. Staff in districts and sectors with key responsibilities for VUP implementation will be trained on the revised VUPs policy, procedures and systems and social protection in general. A key constraint identified to the effectiveness of sector SPOs is limited transport facilities to enable them to reach out to the communities to support and monitor beneficiaries and frontline implementers, so financing to address this issue will be made available through this operation. Options for how this equipment will be procured and managed are being explored. In order to sustainably build capacity for frontline delivery at cell level, frontline staff will be trained by LODA, either directly or through the contracting of private providers. The project will cover the costs of training, as well as of specific training courses that they deliver in line with the scope and objectives of this operation. Project management costs, including LODA incremental operating costs and additional PIU staff, will also be supported through this component.

12. A potential US$10 million grant is being explored and – if made available – would support the introduction of a new nutrition support grant over three years. These grants would target vulnerable (Ubudehe 1) households with pregnant women and children under the age of 5, with a focus on the 1,000‐day window from later pregnancy until age 2. It would be a conditional cash transfer, with human capital requirements such as the use of maternal and child health services (including ante and post‐natal care, as well as following established protocols for vaccinations and growth monitoring of young children). It will be coupled with behavioral support for parenting, as provided in Component 2. The grant would be twinned with supply side interventions provided by the World Bank “Stunting Prevention and Reduction Project” under preparation as a complement to the overall GoR program for combating chronic malnutrition. Specific targeting criteria between the nutrition support grant and ePW are still being determined, but households would only be eligible for one or the other, but not both, programs. This element is proposed for inclusion as additional financing to this operation, to be processed once administrative and financial arrangements with the MDTF have been concluded.


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ANNEX 2: IMPLEMENTATION ARRANGEMENTS


Project Institutional and Implementation Arrangements

1. The two project implementing agencies are LODA and MINALOC. LODA is a semi‐autonomous Government agency, with its own Board, and is overseen by MINALOC; and their responsibilities under the project are fully aligned with their respective institutional mandates. LODA will be responsible for the delivery of Component 1 of the project (Improving coverage, adequacy and effectiveness of the VUP cash transfers). Responsibility for delivery of Component 2 (Enhancing access to human capital and economic inclusion services) and Component 3 (Delivery systems, policy and program management) will be split between LODA and MINALOC. LODA will also lead operational coordination: it will consolidate its own budgets and financial reports with those from MINALOC and the Districts, for submission to the World Bank. MINALOC will lead policy coordination: it will ensure that the PDOs are being fulfilled and that activities are aligned with national priorities in social protection. Both MINALOC and LODA already have SPIUs in place, which will play key roles in the project – in fiduciary and administrative management and in the provision of technical advice to core MINALOC and LODA staff to support project implementation.

2. Operational delivery of components 1 and 2 will be the responsibility of Districts, which are decentralized legal entities, and of their sub‐divisions – Sectors and Cells. The responsibilities of Districts under the project are in line with their mandate for delivery of GoR programs, including the VUP. A recent re‐structuring has usefully integrated responsibility for VUP within core Government structures and increased their social protection capacity: VUP delivery falls to the Social Development Unit at District level and to the SPO in the sector. Districts will be held to account for their project delivery responsibilities through project‐specific legal agreements between LODA and each District. These will complement and reinforce the existing MOUs between LODA and Districts, as well as annual performance contracts of districts, monitored by MINALOC.

3. Addressing the PDOs will require involvement of many stakeholders; and the existing SPSWG will be the main coordination mechanism. Based on lessons learned from other similar operations, actual implementation arrangements for this project have been kept as simple as possible: no new structures have been created, responsibilities have been aligned with the current mandates and capacities of institutions, and the number of implementing agencies has been kept to a minimum. However, many other stakeholders are important to delivery of PDOs and it is important that the project supports their engagement. It will promote coordination of all relevant ministries, agencies, other DPs and NGOs through the existing SPSWG structures.

4. The two implementing agencies and decentralized entities are assessed as having generally sufficient capacities to deliver their responsibilities under the project. This conclusion is based on a series of assessments carried out during project preparation, including: an Institutional Capacity Assessment; a Financial Assessment; and a Procurement Risk Assessment. Key strengths include the following: i) LODA has a strong track record in the delivery of a succession of DPOs that have helped establish the foundation of the social protection system, including the VUP; ii) MINALOC, LODA and Districts all have clear mandates, which are aligned with their responsibilities under the project, and institutional and individual


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staff accountabilities are underpinned by performance contracts; iii) MINALOC, LODA, Districts and Sectors have all recently been re‐organized in ways that will strengthen the capacities available for social protection and VUP delivery; iv) arrangements for financial oversight and accountability are considered acceptable, being underpinned by a strong PFM legal framework; and v) all procuring entities involved in the project are well established and have competent procurement units and well‐functioning tender committees.

5. On the other hand, a number of capacity challenges have been identified. Firstly, this is the first IPF in the social protection sector in Rwanda. Typically, IPFs require more capacity to implement than DPOs, in particular stronger FM and procurement capacities, as well as the ability to manage social and environmental safeguards and potential resettlement issues. Weaknesses in these areas include: a dearth of suitably qualified PFM staff and high turnover; a relatively nascent internal audit function; internal control weaknesses at district‐level which sometimes result in adverse or qualified audit opinions; weaknesses in contracts management; and insufficient capacity to manage safeguards. There are staff in the LODA SPIU responsible for FM, procurement and safeguards in relation to other World Bank funded projects, but they have insufficient time to also cover this new intervention.

6. Secondly, the operation supports several programming innovations, which are at various stages of design and implementation. These include: ePW in home‐based childcare; livelihoods enhancement, supported by a network of caseworkers at community level; and proposed nutrition support grants. These innovations will require more and different types of capacity than the ongoing implementation of well‐established VUP components, in particular stronger learning capacities. While M&E for accountability in the VUP is fairly strong, M&E for learning is much weaker: previous assessments have found that in LODA there is limited time and encouragement for learning, and insufficient internal capacity to translate raw information into useable knowledge that can be used for ongoing program improvement25.

7. Thirdly, given that LODA is not an operational agency, decentralized entities will be responsible for frontline delivery and, therefore, key to the success of the project. Yet technical and FM capacities at these levels are more constrained than at the national level. For instance: i) District staff are over‐stretched, limiting the quality and timeliness of their data management and reporting, as well as their ability to effectively support lower levels; ii) at the sector level, SPOs have insufficient time to devote to social protection due to having to also cover the responsibilities of Health and Sanitation Officer posts (97 percent of which are unfilled), and limited access to transport inhibits their ability to travel to communities to engage with beneficiaries; and iii) there is currently no sustainable and effective system in place for building the capacity of frontline staff and volunteers, including cell‐level Socio‐Economic Development Officers and caseworkers who are the main day‐to‐day interface with beneficiaries.

8. Priority capacity building interventions are included in the project. In particular, a new Social Protection Team will be established within the existing LODA SPIU, headed by a social protection Program Coordinator. The LODA SPIU currently includes a unit that manages another Bank project, but these staff do not have the time to take on the additional responsibilities associated with the proposed project. There are also a number of staff in the SPIU already working on social protection, but due to the expansion of VUP annually and its sophisticated nature, the current structure needs to be strengthened with additional human resources to improve capacities and increase efficiency. Thus, a dedicated social protection team

25 Weber, K. 2015, Assessment of Existing VUP Planning, Monitoring and Evaluation Systems, Mott McDonald, p. 17.


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will be established within the SPIU, headed by the social protection Program Coordinator and comprising: one M&E and Learning Specialist; two Social Protection Specialists; two Social Protection MEIS Specialists; one Data Analyst; two Safeguards Specialists; one Procurement Specialist; two FMSs whose ToRs will require World Bank ‘no‐objection’ (one qualified ACCA/CPA or equivalent with experience, one FMS with Masters, Bachelor’s degree or certified accounting technician (CAT) and relevant experience); one Financial Compliance Monitoring Specialist; and one Internal Auditor. Furthermore, to ensure that this team serves to sustainably build capacity of core LODA and district staff, all members will have a specific capacity building objective in their job description and performance contract.

9. The MINALOC SPIU will also require additional staff to manage implementation of the project. There is currently no social protection technical capacity in the SPIU, so a Social Protection Policy Adviser to support policy development will be recruited. The existing SPSWG and its subcommittees need to be strengthened to make it more effective. The project will support a Social Protection Specialist to facilitate and coordinate the SWG. Furthermore, the NECDCP will be strengthened through the addition of a national Nutrition Specialist to serve as TA.

10. As for subnational levels, the GoR is committed to address key constraints by: adding a Social Protection Data Management and Information Systems Officer as well as filling other vacant Sector posts, addressing the frontline monitoring mechanisms constraint, addressing mobility constraints at the Sector level and establishing a sustainable and effective system for frontline capacity building. Project financing will be available to support Data Management and Information Systems officers to support in the management of VUP MEIS at District level, as well as other social protection MIS and will finance the mobility of Sector SPOs to enable them to travel to communities for support and monitoring. The project will also strengthen VUP monitoring at Sector level in an appropriate and cost‐effective manner. The project will also support GoR to establish an effective and sustainable approach to capacity building, either by establishing an in‐house cadre of trainers or through contracting of service providers, in order to ensure that sufficient high‐quality training and coaching is available at all levels ‐ District, Sector and Cell.

11. To build effective capacity for implementation, the project will also finance training at all levels. Specific training courses supported by the project will include: training of mid and senior level GoR staff and Parliamentarians in social protection; technical training in social protection, VUP operations, M&E, the CMS and MEIS for LODA, District and Sector staff; practical and inter‐active training for local government officials and caseworkers; high quality training of trainers for staff or contractors charged with training others; and training in FM, procurement and contract management for all relevant staff (see sections below for further details).

Financial Management and Disbursements

12. A FM assessment of LODA, MINALOC and participant Districts has been undertaken. The objective of the FM assessment was to determine whether the existing FM arrangements: i) are capable of correctly and completely recording all transactions and balances relating to the project; ii) facilitate the preparation of regular, accurate, reliable and timely financial statements; iii) safeguard the project’s assets; and iv) are subject to auditing arrangements acceptable to the Bank. The assessment complied with Bank policy and Directive on Investment Project Financing, the FM Manual for World Bank‐Financed Investment Project effective on March 1, 2010 and the FM assessment and risk rating principles.


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13. Per the Bank policy and Directive of Investment Project Financing, the FM system is considered adequate. The arrangements for oversight and accountability are considered acceptable. They consist of: management oversight; internal oversight bodies, including Audit Committees; external oversight bodies, including the Office of the Auditor General (OAG); and Parliament, which reviews the OAG’s audit reports and approves the budget, including that of the project. Nevertheless, risks areas were identified related to: i) delayed funds flow to the beneficiaries; ii) staffing gaps; iii) unreliable reporting and reconciliation; and (iv) inadequate and delayed implementation of the OAG recommendations, and qualified or adverse audit opinion at Districts level. The mitigating measures in the risk matrix below are appropriate to maintain an acceptable accountability and transparency.

Country Governance Overview

14. Rwanda has an effective governance system, including robust anticorruption laws and effective oversight institutions and strong political commitment to control fraud and corruption. Anticorruption laws include the Penal Code, Law No. 76/2013 and the Whistle Blower Protection Act 2013; oversight institutions include the Ombudsman, National Prosecution Authority and Independent Auditor General. The country leadership has demonstrated strong commitment and resilience to overcome a difficult environment and has made significant progress in achieving peaceful political settlement and national security with dividends to citizens in terms of access to services and poverty reduction. The Government has established its legitimacy and authority and maintained the rule of law.

15. Successive strategies have strengthened PFM, but some challenges remain. PFM is a key pillar of governance26: its main objective is to ensure efficient, effective and accountable use of public resources as a basis for economic development and poverty eradication, through improved service delivery. The Government embarked on comprehensive PFM reforms with the launch of its Public Financial Management Reform Strategy 2008–2012. Building on progress under that strategy, the PFM Sector Strategic Plan (SSP) 2013‐18 was formulated to further advance reforms in the sector. The strengths of the PFM system now include: i) a strong PFM legal framework; ii) an orderly and transparent planning and budget preparation process; iii) a robust Integrated Financial Management Information System (IFMIS) rollout at Central and Decentralized levels; and iv) simplified public financial guidelines for chief budget managers that provide clear descriptions for the various PFM processes. But challenges remain, as shown in recent PFM diagnostic reports.27 These include: i) a dearth of suitably qualified PFM staff to handle PFM functions coupled with high staff turnover; ii) a relatively nascent internal audit function; iii) internal control weaknesses at Districts which sometimes result in adverse or qualified audit opinions; and iv) weaknesses in contracts management.

Risk Assessment and Mitigation

16. Table 2.1 below shows the key risks in achieving the PDOs. It also provides a basis for determining how management should address these risks.

26 For example, the EDPRS 2 states that “Rwanda's public finance management system is the platform for the efficient management of the nation’s resources. Its reporting, audit and oversight functions are essential elements in providing effective Accountable Governance” (Para 6.27). 27 Such as the Public Expenditure and Financial Accountability (PEFA) 2015


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17. The overall FM risk rating for this project is Substantial. The project will involve multiple low value transactions with multiple actors from central to decentralized levels, which increases FM risk. Specific risks and their ratings are detailed in Table 2.1 below. Mitigating measures are proposed, but risks for which the mitigating measures have not yet been implemented have been maintained at their original rating. The risk level might reduce during project implementation, after the mitigating measures have been implemented, but at this stage the ratings have not been reduced in anticipation of this. Key mitigation measures include the following:

(a) The recruitment of additional FM staff at LODA, two FMSs whose ToRs will require World Bank ‘no‐objection’ (one qualified ACCA/CPA or equivalent with experience, one FMS with Master, Bachelor’s Degree or CAT and relevant experience), one Internal Auditor, and one Financial Compliance Monitoring Specialist with ToRs to be agreed with World Bank. Since there is no market analysis in the procurement strategy on qualified ACCA, CPA, this can be revised during the implementation along with the Procurement Plan to allow for International Consultant contracts if needed. These additional staff should be on board within three months of project effectiveness.

(b) The preparation of detailed FM and disbursement guidelines for the project acceptable to the World Bank.

(c) Capacity building on FM and internal audit.

Table 2.1. Financial Management Risk Assessment and Mitigation Table

Risk

Risk Rating Before

Mitigation

Risk Mitigating Measures Incorporated into Project Design

Residual Risk Rating

Condition of Negotiations,

Board or Effectiveness

(Y/N?) Inherent Risk Country Level; Findings of the Central Government PEFA Assessment in 2015 identified areas of strength and areas for improvement. The latter include budget credibility, internal audit, PFM staffing and financial reporting.

M

PFM Reform Strategy 2013 – 2018, PFM Basket Funds and the World Bank Public Sector Governance PforR Project are all supporting GoR efforts to improve the PFM system.

M N

Entity Level Project will be implemented by MINALOC, LODA and Districts. The Districts PFM capacity gap is still significant as reflected by OAG reports and preliminary findings from the PEFA.

S

Enhance LODA capability to provide implementation support to Districts by recruiting additional FM staff in LODA SPIU.

S N

Project Level The funds flow to the beneficiaries may be delayed

S Effective funds flow and reporting system. S N


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Risk

Risk Rating Before

Mitigation





(Y/N?) Control Risk Accounting Inadequate FM capacities especially at the Districts may affect the reliability of the financial information. The adverse or qualified audit opinion for most Districts alludes to unreliable financial statements, hence the risk that the financial information presented may not be reliable or accurate.

S

Provide capacity building and enhanced implementation support to Districts FM staff. Recruit one FMS Qualified ACCA, CPA or qualification recognized by IFAC, One FMS with a Master’s, CAT or Bachelor’s with relevant experience, one Compliance Officer. The ToRs of the recruitment shall be agreed with the World Bank and follow procurement procedures agreed in the Financing Agreement Enroll the project in IFMIS at MINLAOC, LODA and Districts.

S N

Internal Control All implementing entities have an internal control system based on the Manual of Government Policies and Procedures. But financial information reconciliation and reporting arrangements between Districts and LODA under the project shall be further clarified Accounting errors, including mis‐posting and misclassification of expenses mainly at District levels The project generates workload that cannot be absorbed by existing staffing arrangement. FM staffing gap at LODA and Districts exists

S

FM guidelines which will detail the reporting arrangements, internal control procedures and supporting documents specific to the project to ensure more efficient and effective accountability and funds flow. The guideline will be complemented by the MOUs signed by LODA with each participant District Recruit additional FMS at LODA SPIU (as detailed above). The Staff will absorb the workload, ensure the quality review of transactions, support Districts FM staff and provide capacity building

S N

Internal Audit Capacity in some Districts may impact negatively the effectiveness of the function

S

Fill vacant positions with experienced Internal Auditors in LODA and all Districts for all Districts to have effectively 3 Internal Auditors. Recruit an additional Internal Auditor upon ToRs agreed with the Bank at LODA. The Internal auditor as per the MOU signed with the Districts will perform the audit of project expenditures and revenue jointly with District Internal Auditors. S/he will report to

S N


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Risk

Risk Rating Before

Mitigation





(Y/N?)

the LODA Audit Committee, and SPIU Coordinator, and work in synergy with LODA internal Auditor. The Auditor to be supervised by the GoR Chief Internal Auditor as per the GoR internal audit function regulations. Effectively include the project in the Internal audit work scope and design. an internal audit work plan risk based

Funds Flow Delayed funds flow from World Bank to LODA and from LODA to beneficiaries would result in non‐efficient achievement of the PDO. Ineligible expenditures due to co‐mingled funds or funds transferred to ineligible beneficiaries

S

Two designated accounts will be opened at the National Bank of Rwanda (BNR) in USD, one managed by MINALOC and one by LODA. Each District will open a separate project account at BNR in Rwf. Interim financial report (IFR)‐based disbursement method will be used to request funds from the World Bank. Fund requests will cover 6 months’ cash flow need Districts fund requests to LODA will be based on 3 months’ cash flow need, as elaborated in District Agreements between LODA and the Districts under the project. LODA will ensure that Districts implement targeting procedures as per VUP Document and VUP Targeting and Enrolment Guidelines, and PIP.

S N

Financial Reporting; Delay in preparing comprehensive and reliable financial reports

S

The financial reporting format is built on country systems and on the project specific financial information required. The format is country wide used for all World Bank financed investment projects. The financial reporting preparation will use the IFMIS as primary system. Specific financial information which cannot be retrieved directly from IFMIS shall be subject to a quality assurance review before inclusion in the financial report.

M N

Auditing Delayed implementation of the OAG recommendations at District level which results in most cases in persistent adverse or qualified audit opinion

S

Fill all vacant internal audit positions at Districts to have 3 qualified Internal auditors. Enhance the audit committee functioning. Enhance internal control at District‐level by filling vacant positions with qualified staff and other capacity gaps.

S N


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Risk

Risk Rating Before

Mitigation





(Y/N?) Fraud and Corruption Payment to non‐eligible beneficiaries Payment to eligible beneficiaries of Public Work who did not effectively perform the work.

M

Rwanda has an effective governance system, including robust anticorruption laws, effective oversight institutions, and strong political commitment to control fraud and corruption. The effective implementation of a complaints and redress mechanism will also help mitigate the risk

M N

Overall Risk Rating S S Note: H – High; S – Substantial; M – Modest; L – Low.

Planning and Budgeting

18. The project will comply with the GoR planning and budgeting procedures and timeline. MINECOFIN plays the leading role in the planning and budget preparation process. LODA, MINALOC and Districts are all budget agencies and so each prepare a budget that is discussed with MINECOFIN. MINECOFIN issues a first budget call (planning phase) to all budget agencies every October or November, and later a second budget call which provides ceilings to budget agencies, based on the predicted available funding assigned for the fiscal year and DP commitment to disburse. Budget approval is carried out by Parliament in June every year. Budgets are then uploaded in IFMIS and budget agencies can spend. Commitments are made in IFMIS following approval procedures under the responsibility of the Chief Budget Officer. LODA’s role in relation to the District budget setting process is twofold: i) to train and coach the Districts in budget planning and formulation of the development side of the budget; and ii) to advise the Districts of the budget ceilings that relate to LODA development programs, including VUP.

19. All implementing entities will follow the above process for planning and budgeting of the project. However, the project budget will be consolidated by LODA in consultation with Districts and MINALOC. The implementing entities will disclose their specific allocated budgets within their respective budgets. The World Bank will review and provide no objection to the proposed annual plan and budget. The period of the submission to the World Bank for no objection is set out in the Financing Agreement. The annual budget will be supported by the cash flow forecast for the fiscal year broken down by month, to allow monthly cash flow performance monitoring. Budget monitoring will be done through the monthly budget performance report sent to MINECOFIN and the quarterly budget performance report to be submitted to the World Bank as part of the quarterly financial report. The latter will include budget variance analysis, including reasons for any variances and measures to address these.

Accounting Arrangements

20. Basis of Accounting: All implementing entities prepare their accounts on a modified cash basis and in accordance with International Public Sector Accounting Standards (IPSAS) issued by IFAC. Where appropriate, disclosures are made to ensure compliance with the requirements of Article 70 of the Organic


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Law on State Finances and Property: Law No. 12/2013 of 12 September 2013 and Ministerial Order N°001/16/10/TC of 26/01/16 relating to Financial Regulations, as well as the project document, the project implementation manual and the Legal Agreement.

Staffing Arrangements

21. MINALOC: The MINALOC SPIU currently includes one FMS and one Accountant, who are under the overall supervision of the MINALOC Director of Finance. They both hold bachelor’s degrees, with six and 17 years of experience, and the accountant is pursuing a CPA. They have experience implementing donor funded projects such as the Belgian Funded Decentralization project and the accountant was involved with a World Bank‐financed project that closed in 2011, but neither have recent experience with World Bank projects. Improvements measures are: i) to provide capacity building support to familiarize the FM team with World Bank FM procedures; and ii) the FM team will all enroll/continue in a CPA graduation scheme sponsored by MINECOFIN.

22. LODA: The Finance Department is under the Corporate Services Division headed by the Director of Finance, and has four staff. The Finance Director is CPA‐qualified. However, this unit deals only with LODA’s internal FM, and does not offer support to or oversight of Districts. There is also a Financial Compliance Monitoring Officer within the SPIU who reports to the M&E and Local Planning Division. His role includes advising Districts on the effective use of LODA allocations and inspecting, monitoring and reporting on the use of these funds. The project will increase workload, so will require the recruitment of two additional FM staff whose ToRs will require World Bank no objection (one qualified ACCA/CPA or equivalent with experience, and one FMS with either a Master’s, Bachelor’s degree or CAT and relevant experience). The FMS staff will complement the existing SPIU LODA FM staffing.

Internal Control and Internal Audit

23. Internal control. The GoR has created an enabling environment to manage public resources effectively and efficiently. The Organic Law and the associated financial regulations provide a good legal framework for the management of and accounting for state revenue and expenditures. They are complemented by the Manual of Government Policies and Procedures for Financial Management and Accounting used by all Government budget and reporting agencies. Regarding the project, detailed FM guidelines that consider the World Bank’s specific requirements and disbursement procedures will be developed. The FM guidelines will articulate the additional requirements of the internal control system for each entity, considering project risk, including risks at District level. The fiscal year 2015‐2016 financial audits for the Districts highlighted significant issues which lead to adverse or qualified audit opinion, including: improper books of accounts kept; failure to consolidate District accounts with those of non‐budget agencies; insufficient supporting documents; long outstanding advances; un‐reconciled differences, of which some were material; cases of fraud and misappropriation; wasteful expenditure, and bank reconciliations not properly done The guidelines will be complemented by the MOUs signed by LODA with participant Districts to enforce the financing mechanism.

24. Internal audit. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. LODA has one internal auditor, and under the MINALOC


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arrangement local government internal auditors work as a team and complement each other. The existing MOU between Districts and LODA states that Districts shall facilitate auditing by providing necessary information and supporting documents. Each District is required to have three internal auditors, who report to the Audit Committee within the District Council. All entities have an audit committee in place. However, not all internal audit positions are filled at District level, so it is important that all entities take necessary action to fill vacant internal audit positions. In terms of the functioning of the Audit Committees, recent improvements have been noted in that they have started to meet more regularly, but the quality of deliberations and decisions still needs improvement.

25. Furthermore, the project will generate additional workload and risk that requires additional resources dedicated to the Internal Audit function. One Internal Auditor with experience will be recruited in the LODA SPIU, with ToRs agreed with the World Bank. S/he will develop a risk based audit plan that will be approved by the Audit Committee. The internal audit mission shall comply with the GoR Internal Audit Regulation which is in line with the International Professional Practices Framework of the Institute of Internal Auditors. The Internal Auditor will report to both the LODA audit committee and the SPIU Coordinator, and work in collaboration with Districts’ internal auditors (as per the MOUs with Districts), and with the LODA internal auditor. The internal Auditor will also be under the general supervision of the GoR Chief Internal Auditor as per the Internal audit regulations in Rwanda.

Banking and Funds Flow Arrangements

26. Two separate designated accounts will be opened at the BNR: one to be managed by LODA and another by MINALOC. The designated accounts will be denominated in US$. Each participating District will open a separate account at National Bank of Rwanda (BNR) in Rwandan Francs (Rwf). Signatories of the bank accounts will be documented to ensure only authorized persons can sign payment orders. The signatories of the Withdrawal Application (WA) to request funds from the World Bank will be proposed by MINALOC and LODA and submitted to the World Bank by MINECOFIN.

27. The project accounts in RWF will finance all eligible project expenditures as per the Financing Agreement.

28. To mitigate the risk of delayed funds flow, disbursement will be financial report based and funding requests from LODA or MINALOC will be based on the next six months’ cash flow forecast needs. At LODA, Funds will flow from the Designated Account to the Districts project account at the request of Districts and will be based on the Districts three months’ cash flow needs. The 40 percent, 40 percent, 20 percent installments as per the existing MOU with Districts shall not apply, to allow more timeliness in availability of funds. Districts will report to LODA on the use of funds monthly, after making payment to final beneficiaries. The reporting format from districts will be agreed in the MOUs signed with Districts and the World Bank.

29. Counterpart Funds. Counterpart funds of around US$6 million will be made available, at the beginning of each semester of the fiscal year, into an account opened in Rwf at the Central Bank (BNR) by the Recipient to co‐finance activities under Component 3 of the Project. The Recipient will take necessary measures to plan, budget and release counterpart funds for activities co‐financed. The receipt and use of the counterpart funds will be reported in the periodic financial report of the project as per the Disbursement and Financial Information Letter


52

30. The disbursement methods are: Advance to the Designated Account, Direct Payment, Reimbursement and Special Commitment.

Figure 2.1. Funds Flow Chart

31. e–Disbursement: The World Bank has introduced the e‐Disbursement for all its supported projects. Under e‐Disbursement, all transactions will be conducted on line and all associated supporting documents scanned and transmitted through the World Bank’s Client Connection system. E‐Disbursement considerably speeds up disbursements and facilitates project implementation, as it: i) expedites World Bank processing of disbursement requests; ii) prevents common mistakes in filling out Withdrawal Applications (WAs ‐ Form 2380); and iii) reduces the time and cost of sending paper WAs and supporting documentation to the World Bank.

32. Upon credit effectiveness, MINALOC and LODA will be required to submit WAs for initial deposits to the Designated Account, drawn from the financing. If ineligible expenditures are found to have been made from the Designated Accounts, the GoR will refund to the World Bank. If the Designated Accounts remain inactive for more than three months, the GoR may be requested to refund to IDA amounts advanced to the Designated Accounts.

Financial Reporting Arrangements

33. MINALOC, LODA and Districts all prepare IFRs on a monthly basis for MINECOFIN. A financial report covering the quarter will be prepared by these entities, consolidated by LODA and submitted to the World Bank. Thus, the financial reporting arrangements are built on country financial reporting


53

systems and take into account World Bank specific needs for financial monitoring of the Project. The consolidated quarterly financial report will be submitted to the World Bank by LODA 45 days after the end of the quarter. The participating Districts will prepare an IFR to be submitted to LODA on a monthly basis for disbursement and consolidation purposes within 15 days of the end of the month. The reporting arrangement between Districts and LODA will be further clarified in the MOUs with Districts and agreed with the World Bank.

34. The IFR submitted will include the following:

(a) A statement of revenues and expenditures, (b) Financial assets and liabilities, (c) Cash flow statement, (d) Budget performance report per economic classification, (e) Budget performance report by project activity/component and categories, (f) Designated account activity statement, (g) OAG recommendations implementation status (h) Post review and prior review contracts, if any, (i) A statement of accounting policies adopted with explanatory notes (j) Annex

External Auditing Arrangements

35. The external auditing of the project will be undertaken by the Office of the Auditor General (OAG) of Government. The OAG of State Finances is the Supreme Audit Institution (SAI) of Rwanda. The OAG was established in 1998 by Law no. 05/98 of 4th June 1998 and became the SAI of Rwanda in June 2003. It is headed by the Auditor General, assisted by a Deputy Auditor General. According to article 183 of the Constitution of Rwanda as amended in December 2015, the responsibilities of OAG include auditing of revenues and expenditures of the state, as well as the local administrative entities, public entities, parastatals and Government projects, particularly verifying whether the expenditures were in conformity with the laws and regulations in force and with sound management. Therefore, OAG has the constitutional responsibility for carrying out all audits in the Republic of Rwanda.

36. The project audit scope will be all expenditures and revenues as reported in the project consolidated annual financial statement, covering all revenue and all expenditures made by LODA, MINALOC and Districts from the financing provided by the World Bank to the project. The auditor will express its opinion on the consolidated annual financial statement prepared by the LODA and covering all project revenues and expenditures. The audits will be conducted in accordance with International Standards of Supreme Audit Institutions. The fiscal year for the project is July 1 ‐ June 30. The submission of the project audited financial statements to the Bank is within six months of the financial year‐end.

37. Governance and Anti‐Corruption Issues. The implementing entities have a fraud and corruption policy in place that is complemented by provisions of the World Bank Anti‐corruption guidelines. An appeals and complaints handling mechanism has been developed and its effectiveness will mitigate the risk of fraud and corruption. The Ombudsman’s Office and the National Prosecution Office are empowered and are playing a strong role to improve the country governance environment.


54

38. Implementation support plan. Given the substantial risk, at least two field missions will be carried out each fiscal year. The support missions will include review of the financial report and audited financial statement, advice to the implementing entities and capacity building, and visits to Districts. The budget for supervision will consider the need to increase the efficiency of financial controls and related support to project implementation. Joint supervision missions with procurement staff to strengthen Bank control and support are envisaged. In depth review missions, could also be carried out, depending on the evolution of risk during the project implementation.

Financial Management Action Plan

39. The following key actions need to be undertaken to enhance the FM arrangements for the Project:

Table 2.2

Action Deadline Responsible Agency

Accounting

Recruit additional FM staff in the LODA SPIU with ToRs agreed with the World Bank: 2 FM Staff as detailed above. Enroll the project into IFMIS Organize a capacity building workshop for FM and Internal Auditor staff at LODA and Districts

At latest 3 months after effectiveness At latest 2 months after the financing agreement signing At project launch and, thereafter on need basis

LODA LODA, MINALOC and Districts World Bank/ LODA and MINALOC

Funds Flow

Open 2 Designated Accounts in USD (MINALOC and LODA); and separate Project accounts in Rwf at BNR (Districts)

2 months after the signing of Financing Agreement

MINECOFIN/LODA/MINALOC/Districts

Internal Control/Internal Audit

Recruit an additional Internal Auditor in LODA SPIU with ToRs agreed with the World Bank.

At latest 3 months after effectiveness

LODA

Procurement Management

40. Procurement for the project will be carried out in accordance with the ’World Bank Procurement Regulations for Borrowers under Investment Project Financing’; and the project will also be subject to the World Bank’s Anticorruption Guidelines (both dated July 1st 2016). The World Bank shall prior review contracts according to thresholds set out in the PPSD; and all contracts not covered by prior review shall be subject to post review during implementation support missions and/or special post review missions. The World Bank may conduct, at any time, independent procurement reviews of all the


55

contracts financed under the loan. The procurement approach and methods will follow standard approaches and methods (approved selection methods and market approach options in the regulations). No activity is envisaged to involve departure from policy thresholds or need of additional oversight or Operational Procurement Review Committee (OPRC) review levels.

41. All contracts following the national Competitive Bidding (NCB) procedures shall follow the Rwanda Public Procurement Law (Law No. 12 of 2007) as revised in 2013 (Law No. 5 of 2013). The provisions of the procurement law are consistent with the World Bank Procurement Regulations Section V ‐ Paragraph 5.4, on National Procurement Procedures. The Rwanda Public Procurement Authority (RPPA) governs purchase of works, goods and services using public resources by national and decentralized Government entities. The RPPA as a regulatory body sets out the rules and procedures of public procurement and provides a mechanism for enforcement of the law, including by undertaking procurement reviews and annual audits. There is also a National Independent Review Panel (NIRP) independent of Government, that deals with complaints received from bidders or consulting firms.

42. In case of international procurement, the following details shall also be published in the United Nations Development Business and the World Bank’s external website: i) an invitation for bids for procurement of goods and works following open international market approaches; ii) Request for Expression of Interest for selection of consulting services following open international market approaches; and iii) contract award details of all procurement of goods and works and selection of consultants using open international market approaches.

43. Project procurement will be carried out by MINALOC, LODA and Districts. LODA will have overall responsibility for Component 1 and much of Component 2 of the project, and the majority of activities under these components will be implemented by the Districts, which will be responsible for necessary procurement. However, only a small proportion of the finance will actually be spent through procurement – most will be transfers through DS or PW. The engagement of PW workers will be through community procurement and involve no contractor; it will follow the “Procurement Regulations for IPF Borrowers,” July 2016, paragraph 6.52 and Annex XII ‐ Selection Methods paragraph 6.9 and 6.10. The procurement arrangements at community level and oversight mechanisms will be detailed in the Project Operations Manual, and will be in line with the ‘Guidance Note for Design and Management of Procurement Responsibilities in Community Driven Development Projects’, of March 15th, 2012. The fiduciary assurance shall come from citizen engagement and disclosure at community level.

44. District procurement under Components 1 and 2 will be largely low‐value items related to PW and community sensitization. For PW, there will be procurement of construction materials, tools and equipment and possibly local technical support contracts. In some cases, the cost of items to be procured by decentralized entities will not exceed the ‘shopping’ threshold. Then procurement will generally be undertaken through request for quotation procedures: the request for quotation will indicate the specifications of materials and works, as well as the delivery/completion time; and the contract award will be based on comparing price quotations from several qualified suppliers/contractors, with a minimum of three to ensure competition. When the value of the contract exceeds the Shopping threshold, then procurement will be through NCB procedures; the national Standard Bidding Documents issued by the RPPA and acceptable to the World Bank will be used. Direct contracting might be used where it is to the benefit of the project and in accordance with the Procurement Regulations. LODA will provide oversight of Districts at a number of stages in the planning, budgeting and implementation process, together with


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training in procurement, program operations, planning, budgeting and M&E systems.

45. MINALOC and LODA will procure equipment, materials and consultancy services. MINALOC and LODA will both be responsible for elements of Component 3 of the project. Equipment to be procured under this component includes IT and other equipment needed to build capacity; and materials will be associated mainly with training. Consulting services to be procured will include: a mid‐term assessment of NSPS (Dec 2020); selected studies and evaluations and reviews of the VUP (quantitative and qualitative); development of harmonized institutional arrangements in the social protection sector; and various training and capacity building support.

46. Operating costs. These items will be procured using the Borrower’s national procurement and administrative procedures acceptable to the World Bank. Any staff required for project implementation support will be recruited/selected following Project Implementation Support Personnel, paragraph 7.32 of the World Bank Procurement Regulations. The Borrower will also pay for costs associated with any resettlement, land acquisition, compensation, and relocation of services, from counterpart funds.

47. Record keeping and disclosure of procurement information. All records pertaining to award of tenders, including bid notification, register pertaining to sale and receipt of bids, bid opening minutes, bid evaluation reports and all correspondence pertaining to bid evaluation, communication sent to/with the World Bank in the process, bid securities, and approval of invitation/evaluation of bids will be retained by respective agencies and uploaded in STEP. The following documents shall be disclosed on the agencies’ websites: i) a Procurement Plan and updates; ii) an invitation for bids for goods and works for all contracts; iii) Request for Expression of Interest for selection/hiring of consulting services; iv) contract awards of goods, works, and non‐consulting and consulting services; v) a monthly financial and physical progress report of all contracts; and vi) actions taken report on the complaints received on a quarterly basis.

48. The procurement risk rating is assessed to be ‘Moderate’. This is based on the PRAMS and takes into account the roles and responsibilities of the agencies responsible for procurement. A procurement capacity and risk assessment has been carried out by the World Bank for MINALOC, LODA, sample Districts and Sectors, to review the organizational structure for implementing the project, and management and procurement capacity of the entities involved. All procuring entities involved in the project are well established, with competent procurement units and well‐functioning tender committees, though there are some weaknesses/risks, which are set out in table 2.3.

Table 2.3. Procurement Risk Assessment

S. No.

Issue/Risk Recommended Mitigation Measures Responsible Entity and Time

Frame

1

Risk of implementation delays due to limited number of staff at LODA

Recruitment of one additional Procurement Specialist for SPIU‐LODA. Ensure LODA provides adequate procurement support to the districts.

LODA and World Bank are responsible. Before the project effectiveness

2 Lack of relevant experience Quality training in World Bank’s LODA, MINALOC and the


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S. No.

Issue/Risk Recommended Mitigation Measures Responsible Entity and Time

Frame

and mixed procurement profile: (a) Lack of experience in Bank procurement procedures, (b) Lack of experience in Social Protection – Investment Project Financing (SP‐IPF) project implementation, (c) Three levels of implementation, many players, multiple types of activities. The procurement profile is a mix of small value at community level and high value at SPIU.

procurement procedures jointly by LODA SPIU and World Bank on World Bank NPF and Procurement regulation. LODA SPIU will provide guidance to districts – written, reporting formats, coaching and training to districts and consolidates procurement transactions and submit through STEP. A comprehensive Project Implementation Manual (PIM), with one chapter dedicated to procurement should be developed. The implementation of progress will be monitored through MIS software.

World Bank are responsible. At the launching of the project.

3 Weak contract management capacity at districts level

Specialized training on contract management by RPPA. The LODA SPIU will also develop a contract management system to ensure that all contracts under the Project are effectively and efficiently managed. This will include the tracking of key contract milestones and performance indicators as well as capturing all procurement and contract records.

LODA is responsible for organizing and financing the training, while RPPA will provide the training at least once during the first year of the project implementation.

4

Fiduciary risk: corruption and bribery concerns with regards to internal controls within the procuring institutions.

Additional oversight of the procurement process by LODA to minimize risk, additional post is added to LODA’s SPIU. Strengthen inventory management and distribution of construction materials and other goods procured through the Project. The Procured Goods may be label “Rwanda Social Protection Project” and “not for resale”.

LODA, to be implemented throughout the project life.

5

Limited supply market: few qualified suppliers/ contractors in the market, limited competition

Engagement with market through pre‐bid meeting, supplier conferences etc. Consolidate similar procurement items per district, to attract more bidders.

Districts with support from LODA. To be implemented at bidding stage of each important contract.

6 ESIA/RAP process not properly followed

ESMF/RPF consultancy will identify improved procedures. Training will be provided to strengthen procedures as necessary.

MINALOC & LODA, during the first year of the project implementation.

49. The two implementing agencies, MINALOC and LODA have reasonable capacity to manage project procurement. The LODA SPIU has a procurement specialist with experience in procurement and contract management in accordance with World Bank policies and procedures. However, this staff


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member cannot manage the proposed new SP‐IPF project procurement in addition to their existing workload. Therefore, there is a need for an additional Procurement Specialist in the LODA SPIU. MINALOC has two Procurement Officers, who have adequate time to manage the new project in addition to their current work load. However, they lack experience in Bank financed IPF project procurement. Since the implementation of this project will follow the New Procurement Framework and the Procurement Regulations, all staff with responsibility for procurement will require training at the outset of the project.

50. Districts have acquired adequate experience in managing public procurement for VUP. Districts have been managing procurements for PW since 2009 although the number of sectors has scaled up systematically over time and will continue to scale up over the duration of the IPF. At the district level, there are two procurement officers and they work as per the national procurement regulatory environment with training and technical oversight provided by the Rwanda Public Procurement Agency. However, they also lack knowledge of Bank procurement procedures and there are weaknesses in contract management.

51. A PPSD was prepared as part of project preparation by the Borrower with the assistance of the Bank team which looked at the market, procurement risks, procurement options and set out the selection methods to be followed by the Borrower for major activities during project implementation in the procurement of goods, works, and non‐consulting and consulting services financed by the World Bank. The Procurement Plan which is part of PPSD will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The project will use STEP, a planning and tracking system, which will provide data on procurement activities, establish benchmarks, monitor delays, and measure procurement performance.


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ANNEX 3: IMPLEMENTATION SUPPORT PLAN


Strategy and Approach for Implementation Support

1. Implementation support is a core element of the proposed project and partnership between the GoR and the World Bank. Implementation support will involve engagement across several dimensions:

2. Technical. The World Bank team will provide expert staff and consultants to support the counterpart teams at LODA and MINALOC across all project areas.

3. FM. As part of its project implementation support and supervision missions, the Bank will conduct risk‐based FM implementation support and supervision within a year from the project effectiveness, and then at appropriate intervals. During project implementation, the Bank will supervise the project’s FM arrangements in the following ways: Review the project’s semiannual IFRs as well as the implementing agencies’ and the project’s annual audited financial statements and auditor’s management letters and remedial actions recommended in the auditor’s management letters. The Bank’s onsite missions review the following key areas: (a) project accounting and internal control systems, (b) budgeting and financial planning arrangements, (c) disbursement arrangements and financial flows, as applicable, and (d) any incidence of corrupt practices involving project resources. As required, a Bank‐accredited FMS will participate in the implementation support process.

4. Procurement. Procurement supervision missions will be carried out by the World Bank. This will include: (a) review of the Procurement Plan; (b) physical inspection of goods; (c) consultants’ reports (outputs); and (d) site visits of works contracts. There will be one supervision mission every year to carry out post review of procurement actions.

5. Environmental and Social Safeguards. World Bank environmental and social specialists will be members of the project team throughout the project cycle. The specialists will supervise compliance with World Bank safeguards policies and the project’s ESMF and RFP, and will ensure that site specific EMPs and RAPs are developed for individual investments, as required, and adhered to PW projects. The environmental and social specialists will also provide guidance and advice to the SPIU safeguards staff and other relevant personnel to improve their capacity for applying and reporting on safeguards.

6. Implementation support will be undertaken regularly. Implementation support and supervision missions, covering technical, fiduciary and safeguards aspects of the project, are planned twice a year. The team members will monitor and report on progress of the key project activities and their contribution towards achievement of the project development indicators and the PDO. During these implementation support missions, an assessment will also be made of the risks and updates made, as needed. Overall project implementation arrangements will also be assessed with the identification of any adjustments that may be needed.

7. Several team members are based in the region, including some technical, fiduciary, and


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safeguards staff, which will facilitate timely, efficient, and effective implementation support.

8. A mid‐term review would be conducted to take stock of the performance under the project. It would be carried out approximately half‐way through implementation of the proposed project. The mid‐term review would assess progress towards achieving PDIs and PDO. Based on the assessment of progress at the mid‐point of the program, recommendations for amendments to the Project would be considered by both the GoR counterparts and the World Bank management team. The mid‐term review would also review overall project implementation arrangements, making adjustments as necessary.

Implementation Support Plan and Resource Requirements

Time Focus Skills Needed Resource Estimate

Partner Role

First 12 months

Overall project management and technical support; ongoing country‐level policy and technical dialogue; supporting functionality of institutional and coordination mechanisms; developing accompanying measures; delivery of DS and PW; fiduciary compliance and social and environmental safeguards.

Lead social protection specialist with focus on coordination, team leadership, policy dialogue management, targeting effectiveness, M&E, and impact evaluations

Social protection and HD specialists with focus on nutrition, systems development, safety nets, PW, and CE

Fiduciary and safeguards specialists

BB: US$150,000 per year

UNICEF and DFID to provide TA on design of accompanying measures and impact evaluation

12–48 months

Overall project management and technical support; ongoing country level policy and technical dialogue; delivery of DS and PW; launching of innovations; fiduciary compliance and social and environmental safeguards

Lead social protection specialist with focus on coordination, team leadership, policy dialogue management, targeting effectiveness, M&E, and impact evaluations

social protection and HD specialists with focus on nutrition, systems development, safety nets, PW, and CE

Fiduciary and safeguards specialists

BB: US$150,000 per year

Ongoing technical support from DFID and UNICEF TBD based on their upcoming work programs


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Skills Mix Required

Skills Needed Number of Staff Weeks

Number of Trips

Comments

Task team leadership and project management

10 3 Lead Social Protection Specialist, DC based

Social Protection Specialist

8 3 Social Protection Specialist, DC based

Early Years Specialist 8 2 Technical support on nutrition and accompanying measures

HD Specialist 20 0 Kigali based, overall project management support, technical support across project areas, CE and gender oversight

Senior Procurement Specialist

2 0 Kigali based

Senior FM Specialist 2 0 Kigali based

Environmental Specialist 2 0 Kigali based

Social Safeguards Specialist

2 0 Kigali based


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ANNEX 4: ECONOMIC AND FINANCIAL ANALYSIS

Economic and Financial Analysis Rwanda ‐ Vision 2020 Umurenge Program

Overview

1. This annex presents the economic and financial analysis for two out of three components supported by the proposed project—Component 1 (Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge Program VUP cash transfers) and Component 2 (Enhancing access to human capital and economic inclusion services). The first section presents the project’s expected development impact of Component 1 and the second section summarized the expected impact of Component 2. The microsimulations were performed using Rwanda’s most recent the nationally representative EICV conducted in 2013/14 (or the EICV4).

2. The rationale for the Bank’s involvement rests on the Bank’s technical expertise in social protection, the decade‐long successful engagement in the sector, the Government of Rwanda’s view of the Bank as a trusted partner and their prioritization of social protection as a leading sector for addressing extreme poverty and boosting investments in human capital. The high economic rates of return from cash transfer programs at the household, community and national levels make a sound case for these investments in Rwanda, consistent with global experience.28

Section I ‐ Component 1: Improving coverage, adequacy and effectiveness of the Vision 2020 Umurenge VUP cash transfers

Context

3. Component 1 of the project is expected to strengthen and expand coverage of the VUP by providing DS to 105,500 households, improving coverage of cPW to 88 percent of eligible beneficiaries (141,361 households); and roll out ePW to 75,000 households. In 2014, according to the EICV4, the VUP covered 2.4 percent of total population (69,108 households): 37,307 households received DS and 31,082 households benefited from PW. Coverage of the extreme poor and poor was 2.9 and 3.3 percent respectively and the total population coverage of Ubudehe29 category one was 7.1 percent. Among beneficiaries, around 50 percent were poor or belonged to the two poorest quintiles and 60.5 percent belong to Ubudehe category 1. The benefit incidence shows that less than 50 percent of benefits went to the poor and bottom quintiles, while 72 percent of total benefits targeted households in Ubudehe category 1. The average transfer amount as a share of total welfare was higher for DS (53 percent than PW (36 percent) and the gap increases for lower quintile levels and among poor households (Table 4.1). Moreover, only 22 percent of households received their payments on time while most of beneficiaries received their payments more than a month late. Most of the transfers were used in income generating activities: 42.6 percent of DS beneficiaries invested their benefit in income generating activities with 6.2

28 Alderman, H. & Yemtsov, R. (2014). "How can safety nets contribute to economic growth?" World Bank, Policy Research

Working Paper No. 6437.

29 The Ubudehe classification system has since been completely revised. VUP eligibility criteria now includes Ubudehe categories 1 and 2.


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percent spent on health and 1.9 percent spent on education; on the other hand, 32 percent of PW beneficiaries used their benefits to invest in income generating activities and 12 and 5.7 percent invested on health and education respectively. Based on micro‐simulations, the estimated impact of VUP, in 2014, in the country’s poverty rate was a reduction of one percentage point on average: the national extreme poverty rate declined from 17 to 16 percent and the national poverty rate decreased from 39.1 to 38.5 percent. The slightly low impact on national poverty headcounts is due to the relatively small coverage among the poor. On the other hand, among beneficiaries, impacts were more significant: extreme poverty rate decreased from 61 to 19 percent and total poverty decreased from 78 percent to 53 percent.

Table 4.1. Adequacy of Benefits

Quintiles of per capita Consumption Poverty

Total Q1 Q2 Q3 Q4 Q5 Extreme Poor Poor Non‐poor

DS 53.4 163.1 134.0 85.3 51.3 31.4 170.8 103.3 38.7

PW 35.9 50.3 55.1 33.2 35.0 21.3 48.7 54.5 26.6

Source: Author’s calculation based on the EICV4. Note: Adequacy is the mean transfer amount received by a group as a share of the total welfare of the beneficiaries in that group.

Figure 4.1. Simulated Poverty Impact, VUP 2014

Source: Author’s calculation based on the EICV4.

4. The existing literature provides strong evidence on the impact of safety nets programs on poverty reduction and human development outcomes. Ralston et al. 2017 conducted meta‐analysis from a wide range of impact evaluations in Africa and show strong impact on consumption, food security, building risk management capacity, promoting resilience, boosting education and health outcomes and productive inclusion. Their findings also show that the value of the transfer matters: to ensure sizable

17

61

39

78

1619

39

53

0

10

20

30

40

50

60

70

80

90

National Among Beneficiaries National Among Beneficiaries

Extreme Poverty Overall Poverty

pove

rty

head

coun

t %

Pre-Program Post-Program


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impacts on consumption, the transfers need to be sufficiently large. The predictability and timing of benefits may impact outcomes as well. Outcomes were positive partly for this reason in programs in Kenya and in the Zambia Child Grant Program. In contrast, the weak impacts of the Ghana Livelihood Empowerment against Poverty Program and the Lesotho Child Grants Program have been largely attributed to irregular payments.

5. Several evaluations and reviews have demonstrated the VUP’s positive impacts at the household level. A 2014 impact evaluation in Rwanda (Hartwig, 2014) found that both DS and PW can have short‐term positive impacts on livestock accumulation, but that some design features and implementation issues constrain impacts. Various analytical work (Ayliffe et al. 2015a, 2015b; FAO, 2015; and FATE Consulting, 2015) has suggested that stronger impacts of VUP can be expected if: i) coverage is increased; ii) the timeliness and predictability of DS and PW payments is improved; iii) PW provide higher transfers; iv) responsiveness to shocks is improved; and v) linkages to services and information are stregthened.

Analysis of Expected Costs and Benefits

6. The VUP has been recently re‐designed to address these design issues and achieve the targets related to the reduction of poverty and malnutrition30. This section simulates the expected benefits from improvements in the overall effectiveness of the programme in terms of coverage, timeliness of payments and adequacy of PW transfers. It also includes the simulated impact of the ePW. Error! Reference source not found. details the different aspects regarding revised targeting groups, increased coverage, timeliness, and adequacy of payments.

Table 4.2. VUP Project Design Features for Simulation

VUP Target Group and Eligibility Criteria:

Ubudehe Category 1

Scale up: Geographic and Household Targeting

Timelines Adequacy of Payments

DS

Extremely poor, severely labor‐constrained households: DS to households with no member aged 18‐64 able to work and, Extend DS to severly labour constrained households with only 1 worker caring for a person/s with severe

The DS scheme shall be implemented in every sector in Rwanda. DS: 95,846 households Extend DS: 11,000 households

Monthly

‐Head of Household: 250 RwF per day. ‐Second household member: 150 RwF per day. ‐Each additional member of the household (max. 3): 100 RwF per day. The maximum household

30 In response to the second EDPRS in Rwanda, the NSPS was revised and approved in 2013 setting strategic priorities, which the VUP is obligated to respond to improve coverage, targeting and effectiveness by increasing coverage of the poor, improving timeliness of payments and adequacy of public work transfers. It also includes the implementation of the ePW (table 4.1) to cover extremely poor, labor‐constrained households caring for either persons with severe disabilities or children. The Ubudehe household classification system was revised – resulting in a four, rather than six, tier system. Extreme poverty in Rwanda has fallen from 40 percent in 2000/1 to 16.3 percent in 2014. The GoR aims to eradicate extreme poverty by 2020 and achieve a rate of below 9 percent by 2018.


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VUP Target Group and Eligibility Criteria:

Ubudehe Category 1

Scale up: Geographic and Household Targeting

Timelines Adequacy of Payments

disabilities or serious chronic illness.

entitlement is 700 RwF per day.

PW

Extremely poor, labor endowed households: Reside in a c‐PW sector and have at least one member aged 18‐64 able to work and not receiving DS or ePW

VUP PW schemes shall be scaled‐up gradually as resources allow. The poorest sectors will be prioritized. 141,361 households

15 days

Wage rates for cPW shall be set by Umurenge in line with prevailing unskilled wage rates for a full working day but shall not be lower than the official applicable minimum wage rate. Workdays: 70 days on average Transfer amount: RWF 1,125 per day

ePW

Extremely poor, labor‐constrained households: with only one member able to work AND at least one child aged 0‐14 years; or only one member able to work where the worker is aged 60‐64 years and unable to engage in full‐time PW.

75,000 households

Monthly

All ePW participants will be paid the same rate, irrespective of the type of employment. RWF 10,000 per month for 12 months. Workdays: 10 days per month.

Nutrition Support Services

The VUP Nutrition Support Grant shall target extremely poor pregnant mothers and children aged 0‐2 years.

103,000 households

Source: Analysis of Ubudehe data provided by LODA (Oct 2017).

7. Expected cost and benefits are analyzed for the three safety net components: DS, cPW and ePW. Ex‐ante microsimulations are conducted to estimate the expected impacts on poverty and inequality. The simulated scenarios follow the specifics of revised VUP components (table 4.2) and the consumption levels are simply adjusted by the amount of the transfer. In all cases, VUP beneficiaries will be identified as those belonging to the revised Ubudehe category 1 (Box 1). The overall targeting accuracy, impact on consumption and poverty indicators will depend significantly on the Ubudehe categorization and therefore will be affected by targeting errors (Box 1).


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For DS, it is assumed that it is implemented in every sector in Rwanda, targeting all extremely poor in Ubudehe category 1 with no labor and severly labor constrained. DS payments are assumed to be paid monthly according to the size and composition of the household.

For PW, it is assumed that every beneficiary household selected chooses to participate, that a member of that household works the total number of days offered and received the full amount of the transfer for which the household is eligible. That is, all extremely poor households in ubudehe category 1 that have at least one member aged 18‐64 able to work participate for a minimum of 75 days and are paid every 15 days. The transfer amount is on average RWF 1,125 per day. For the analysis, the benefit amount for current beneficiaries is kept and RWF 1,125 per day is assumed for new beneficiaries.

Finally, ePW is assigned to those extremely poor households in Ubudehe Category 1 with only one member able to work and that worker must be caring for a child under 14. The benefit level is set to be paid monthly for 10 working days. The transfer amount is RWF 10,000 per month for 12 months.

Box 1: Ubudehe categories and Targeting Accuracy

In Rwanda, Ubudehe Categorization has been used since 2002, as the basis for targeting access to social benefits and services. Ubudehe categorization is based on community‐based social‐economic mapping. Initially, six categories were identified to stratify the population according to social and economic well‐being and Ubudehe categories 1 and 2 were eligible for VUP benefits. In 2014, Ubudehe Categories were reviewed and the 2015 Ubudehe categorization ranked Rwandan households into four categories, starting with Category1 to Category 4 according to the current social and economic situation of households31.

The EICV4 database includes the previous six categories. In EICV4 in 2014, only 60,292 households were classified under Ubudehe category 1 which is far below the target number of households of the revised VUP components (Table 4.2): DS: 94,500, Extended DS: 11,000, cPW: 270,000 and ePW: 125,000). Using both Ubudehe categories 1 and 2 and the target groups of VUP components, the total number of beneficiaries is close to the target number of beneficiaries of the Government (Table 4.5). Moreover, under the 6‐category classification, the VUP was using as eligibility criteria Ubudehe categories 1 and 2.

Table 4.3. Total Number of Households by Ubudehe Categories, 2014

Ubudehe Categories Total Households Percent

Extremely poor (1) 60,292 2.42

Very poor (2) 491,422 19.71

Poor (3) 1,179,352 47.31

Self‐reliant (4) 97,485 3.91

Rich (5) 5,621 0.23

Very rich (6) 1,714 0.07

Don't know 655,978 26.31

Missing 1,181 0.05

Total 2,493,044 100

31 Republic of Rwanda. Local administrative entities development agency (LODA). 2016. Ubudehe social categorization report.


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Ubudehe categorization used two independent methods to rank the households: (1) The community based categorization, where households have been categorized by the community appreciation; (2) The response based categorization where households have been categorized through a structured questionnaire administration with the household head providing data (LODA, 2016). The advantage of community‐based targeting is that it relies on local information on individual circumstances, which may be more accurate and less costly to collect than using other methods (Grosh et al. 200832). At the same time, several challenges have been identified under community targeting approach. Local actors may have other incentives besides good targeting of the program and can continue or exacerbate any existing patterns of social exclusion (Grosh et al. 2008). In Rwanda, problems may emerge because Ubudehe criteria are not specific or ‘objective’/easily measurable making them difficult to apply consistently across different localities and regions or over time (Gatzinsi et al. 2014)33.

The overall targeting accuracy of the program depends significantly on the Community‐based targeting process. Gatsinsi et al. 2014, find that Ubudehe is not effectively categorizing the poor by matching households in the EICV3 national household survey with their Ubudehe status contained in the Ubudehe database: very few of the poorest households (2 percent) were identified as Ubudehe category 1, and richest quintile households were equally likely to be allocated that status as the poorest. According to the EICV4, Ubudehe categories 1 and 2 (eligible for VUP) allocate 30 percent of resources to bottom quintile, 25 percent to second lowest quintile, 20 percent to the third quintile, 17 percent to the fourth quintile and 9 percent to the top quintile (table 4.4). These targeting errors mean that poverty impacts will not be as large as expected (even if coverage is increased) since significant resources are allocated to richest quintiles under Ubudehe categories 1 and 2.

Table 4.4. Distribution of Ubudehe Categories within Consumption Quintiles and Poverty Status (% households), 2014

Categories Status

Consumption Quintiles Poverty Status

Q1 Q2 Q3 Q4 Q5 Extreme Poor

Poor Non‐Poor

Ubudehe1 Extremely poor 40 23 18 13 6 33 29 38

Ubudehe2 Very poor 29 25 20 17 9 24 29 47

Ubudehe3 Poor 13 18 21 24 24 10 20 70

Ubudehe4 Self‐reliant 5 8 13 23 52 4 8 87

Ubudehe5 Rich 0 3 0 3 93 0 3 97

Ubudehe6 Very rich 0 0 0 0 100 0 0 100

Ubudehe 1 and 2 Extremely poor and poor 30 25 20 17 9 25 29 46


8. Tables 4.5 and 4.6 present the simulation results assuming full coverage of Ubudehe categories 1 and 2 according to the previous 6 category classification. This coverage level is close to the projected coverage numbers of the project (the simulation estimates 355,369 beneficiary households with full coverage, whereas the project has projected 415,500 beneficiary households). Table 4.5 shows the total number of beneficiary households, and coverage rates of total population, by quintiles of consumption, poverty status and Ubudehe categories. The total number of beneficiaries depend on the revised targeting

32 Grosh, Margaret, Carlo del Ninno, Emil Tesliuc, and Azedine Ouerghi. 2008. For Protection and Promotion: The Design and Implementation of Effective Safety Nets. Washington, DC: World Bank. 33 Rachel Sabates‐Wheeler, Samantha Yates, Emily Wylde and Justine Gatzinsi. 2014. Challenges of Measuring Graduation in Rwanda


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criteria and profile of households in Ubudehe categories 1 and 2 according to the EICV4. The new program will increase coverage of total population from 2.4 percent to 12.9 percent. Increased coverage is largely due to increases in both PW and ePW. Coverage of the poorest quintiles and the poor increased as well, reaching around 20 percent compared to 3 percent under the current program. With the new program, more than 60 percent of households in categories 1 and 2 are covered compared to less than 10 percent in the current program. Results also show that coverage of the richest quintiles increases as well and this is due to targeting errors of the Ubudehe targeting mechanism (Box 1).

Table 4.5. Total Beneficiaries and Coverage Rates by Groups, Current, and New VUP

VUP

Total Quintiles of per capita

Consumption Poverty Ubudehe

Households

% Population

Q1

Q2

Q3

Q4

Q5

Extreme poor

Poor

Non‐poor

Catego

ry 1 and 2

Catego

ry 3‐6

Current Program

DS 69,109 1.1 1.0 1.1 0.8 1.3 1.2 1.4 1.1 1.0 3.9 0.4

PW 37,307 1.3 1.9 1.9 1.2 1.2 0.5 1.6 2.5 0.9 3.2 0.8

All 31,802 2.4 2.8 3.0 2.1 2.6 1.7 2.9 3.6 1.9 7.1 1.2

New Program

DS 85,438 2.0 1.2 1.4 1.7 2.8 2.9 2.8 2.3 1.7 9.6 0.0

PW 229,691 9.7 16.0 13.4 8.9 6.5 3.6 18.2 13.7 5.9 46.5 0.0

ePW 40,239 1.2 1.8 1.5 1.1 1.2 0.7 3.1 1.7 0.6 6.0 0.0

All 355,369 12.9 19.0 16.2 11.7 10.4 7.3 24.1 17.7 8.2 62.1 0.0

New program using only Ubudehe 1

DS 14,466 0.3 0.2 0.2 0.2 0.5 0.4 0.5 0.5 0.2 1.5 0.0

PW 21,827 0.9 1.9 1.0 0.5 0.6 0.3 2.3 1.2 0.4 4.1 0.0

ePW 5,260 0.1 0.2 0.3 0.1 0.1 0.1 0.4 0.3 0.0 0.7 0.0

All 41,553 1.3 2.3 1.5 0.8 1.2 0.8 3.2 1.9 0.6 6.3 0.0


9. Table 4.6 shows the expected impacts in coverage, poverty headcount rates and poverty gaps at the national level and among beneficiaries, for different simulated scenarios and VUP components:

The first scenario “Increased coverage” simulates the poverty impacts when the DS is expanded to all households in Ubudehe categories 1 and 2 including the extended DS, PW benefit all eligible households and ePW is introduced. When coverage is increased, other things equal, the extreme poverty rate decreased from 16 percent to 12 percent and the total poverty rate decreased from 38.5 to 31.3 percent. Poverty rates among beneficiaries significantly reduced from 19.4 to 2.3 percent among extreme poor households and from 52.8 to 7.7 percent among poor households.


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The second scenario simulates the expected impact when transfers are paid on time: DS and ePW every month and PW every 15 days, other things equal (coverage, benefit levels etc.). As shown in table 4.6, timely transfers can contribute to poverty reduction and among beneficiaries, poverty is halved.

The third scenario simulates the impact on poverty when beneficiary households receive the adequate benefit levels: DS transfer amounts vary by household composition; PW benefit level is at least RWF 1,125 per day and ePW benefits are RWF 10,000 per month. Both extreme poverty and overall poverty reduced by almost 1 percentage point (15 percent and 37 percent respectively) and among beneficiaries, poverty is more than halved.

Finally, the fourth scenario shows the poverty impact of the new design features of the VUP which combines the previous scenarios (increased coverage, timeliness and adequacy). The new program, can reduce extreme poverty rate by 4 percentage points, from 16 percent to 12 percent and overall poverty decreased by 5 percentage points from 38.5 to 31.3 percent. Among beneficiaries, extreme poverty declined to 1.3 percent and total poverty to 6.6 percent.

10. As expected, the program and each of its components can reduce the levels of poverty in Rwanda in particular, among beneficiaries. Impacts on poverty could be larger if targeting errors are reduced.

Table 4.6. Simulated impact Poverty rates and Poverty Gaps

Simulated Scenarios

Extreme Poverty rates

Extreme Poverty Gap

Overall Poverty Rates

Overall Poverty Gap

National

Among Ben

eficiaries

National

Among Ben

eficiaries

National

Among Ben

eficiaries

National

Among Ben

eficiaries

Current Program

DS 16.1 20.3 3.9 5.2 38.5 43.3 11.9 14.7

PW 16.1 18.7 3.9 5.1 38.5 60.5 11.9 17.5

ePW 16.1 40.5 3.9 11.9 38.5 70.9 11.9 27.6

Combined 16.1 19.4 3.9 5.1 38.5 52.8 11.9 16.2

1. Increased coverage

DS 15.7 8.0 3.8 2.0 37.7 17.6 11.6 5.9

PW 13.3 2.4 3.2 0.7 32.9 8.0 9.9 2.3

ePW 16.5 1.1 4.4 0.8 38.3 6.6 12.3 1.4

Combined 12.4 2.3 2.9 0.6 31.3 7.7 9.3 2.1

2. Timeliness

DS 16.0 10.8 3.8 3.1 38.4 29.0 11.8 9.2


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Simulated Scenarios

Extreme Poverty rates

Extreme Poverty Gap

Overall Poverty Rates

Overall Poverty Gap

National

Among Ben

eficiaries

National

Among Ben

eficiaries

National

Among Ben

eficiaries

National

Among Ben

eficiaries

PW 16.0 15.0 3.8 4.9 38.5 57.8 11.8 16.3

ePW 16.5 1.1 4.4 0.8 38.3 6.6 12.3 1.4

Combined 15.4 8.3 3.7 2.5 37.5 30.3 11.5 8.4

3. Adequacy

DS 16.1 19.2 3.9 10.6 38.4 29.5 11.9 15.2

PW 15.8 6.0 3.8 1.2 38.0 30.8 11.7 7.2

ePW 16.5 1.1 4.4 0.8 38.3 6.6 12.3 1.4

Combined 15.3 7.5 3.7 3.3 37.1 20.8 11.4 7.0

4. All (of the above)

DS 16.0 2.3 4.1 1.0 37.9 5.1 11.9 1.8

PW 13.5 0.4 3.3 0.3 32.7 0.9 10.0 0.4

ePW 16.5 1.1 4.4 0.8 38.3 6.6 12.3 1.4

Combined 12.7 1.3 3.2 0.9 31.3 3.3 9.6 1.3


11. Benefit‐cost ratios of the revised VUP show that the program is cost effective. Figure 2 presents simplified benefit‐cost ratios for the VUP and each of its components, where the benefit is the reduction in the poverty gap due to the transfer, and the cost is the total amount spent on the program. The ratio of these two quantities generates the benefit‐cost ratio, which indicates the reduction in poverty gap obtained for each US$1 spent in the program. A program is cost‐effective when this ratio is equal to 1 meaning that for every RWF 1 spent on the program, a RWF 1 of poverty gap reduction is obtained. In Rwanda, for every Rwandan franc spent in the VUP, 70 percent goes directly to reduce the poverty gap (Figure 4.2). The benefit cost ratio of PW is lower than other components largely because the total cost is higher and because around 20 percent of resources are allocated to the two‐top consumption quintiles. The ePW targeting accuracy is lower than PW but the total cost of the program is lower making it more cost effective. These ratios are very high compared to other programs in the Africa region where benefit‐cost ratios are on average 20 percent (Mauritius, South Africa, Uganda), Beegle et al. (forthcoming)34

34 Kathleen Beegle, Aline Coudouel, and Emma Monsalve, editors. forthcoming. Realizing the Full Potential of Social Safety Nets in Africa. Washington, DC: World Bank.


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Figure 4.2. Benefit‐Cost Ratio ‐ Revised VUP


Section II ‐ Component 2: Enhancing access to human capital and economic inclusion services

Context

12. Component 2 aims to improve the contribution of the social protection sector to boost human capital creation, especially on nutrition and ECD goals. This will be done by expanding the community sensitization and mobilization component of VUP, including BCC campaigns; supporting community‐tailored, home‐based childcare modalities in ePW sites, including parenting, early stimulation and cooking demonstrations; and enhancing livelihoods to increase access to economic opportunities.

13. The stunting rate has decreased in the past few years but continues to be high especially among the poor. Stunting prevalence reduced from 48 percent in 2000 to 38 percent in 2015. Reduction was lower among the poor where malnutrition prevalence is still around 50 percent. The underlying factors driving nutrition outcomes are food security, care practices, the disease environment, and access to health services. Improvements occurred in coverage of antenatal, birth, and postnatal practices; use of insecticide treated nets by children; breastfeeding has been maintained at high levels; and access to improved water and sanitation facilities. Care interventions, particularly coverage of four or more ANC visits during pregnancy and, interactions between care practices, adequacy of food and feeding practices, and improved coverage of environmental health interventions were associated with significantly reduced probability of stunting. Maternal characteristics were found to explain a substantial percentage of child stunting (stature, Body Mass Index and education) and child’s size at birth was found to also contribute

to the likelihood of being stunted35.

35 Rwanda Nutrition Situation Analysis

0.70 0.71 0.69

0.79

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

VUP Direct support Classic PublicWorks

Expanded PublicWorks

Ben

efit

-C

ost r

atio


72

Analysis of Expected Costs and benefits

Costs

14. Stunting in childhood matters because it is associated with adverse outcomes throughout the life cycle. Stunting is related to reduced stature in adulthood, lower cognitive and socioemotional skills, lower levels of educational attainment, and hence lower incomes. Also, non‐communicable diseases are more likely in later life.

15. Stunting leads to increased health care costs and lower income per capita. Galasso, et al. 2017 quantify the per capita income penalty a country incurs for not having eliminated stunting when today’s workers were children.36 On average, this per capita income penalty is around 7 percent, Africa and South Asia incur larger penalties – around 9‐10 percent of GDP per capita. Rwanda is one of the countries with large ‘stunting penalties’, around 13 percent, together with Ethiopia, Burundi, Guatemala, Malawi, Mozambique, and Vietnam. This rate is high if compared to countries with stunting‐induced per capita income reductions less than 2 percent such as Bermuda, Chile, Fiji, Hong Kong (China), Samoa, Seychelles, Tonga, and Trinidad and Tobago.

Benefits

16. There is robust evidence for the considerable economic returns of reducing chronic malnutrition among newborn children. The evidence comes from countries in Africa, Southeast Asia and Central America. The exact magnitude of the economic returns, however, varies considerably with the regional and local context. Galasso et al. estimate the economic returns of a nutrition program. They simulate the impacts on stunting and the rate‐of‐return to scaling‐up to 90 percent coverage, over a period of 10 years, a package of 10 nutrition‐specific interventions in 34 countries, using estimates of costs and stunting impacts from a study by Bhutta et al37. They find that implementing the Bhutta et al. program38, and factoring in the annual trend decline of 1.5 percent p.a., will leave the stunting rate in 2025 at 36 percent below its 2010 value – 4 percentage points shy of the 40 percent target reduction adopted by the 65th World Health Assembly. The rate‐of‐return for the 34 countries as a whole is 17 percent, with a benefit‐cost ratio of 15:1. Africa is the region with the lowest rate of return (15 percent) reflecting the high per capita program cost, the relatively low initial GDP per capita, and the relatively low GDP growth rate; these numbers are offset only partly by the relatively high rate of return to education in Africa. In Rwanda, the rate of return is 9:1.

17. International evidence clearly suggests that social protection programs can be designed and implemented to make significant contributions to addressing malnutrition. Interventions aimed at

36 Galasso, E. A. Wagstaff et al, « The Economic Costs of Stunting and How to Reduce Them » World Bank Policy Research Note, World Bank, 2016. 37 Bhutta ZA, Das JK, Rizvi A, et al. Evidence‐based interventions for improvement of maternal and child nutrition: what can be done and at what cost? Lancet 2013; 382(9890): 452‐77. 38 The Bhutta et al. package includes 10 interventions, each of which is assumed to be taken to 90 percent coverage: (a) salt iodization, (b) multiple micronutrient supplementation in pregnancy including iron‐folate, (c) calcium supplementation in pregnancy, (d) energy‐protein supplementation in pregnancy, (e) vitamin A supplementation in childhood, (f) zinc supplementation in childhood, (g) breastfeeding promotion, (h) complementary feeding education, (i) complementary food supplementation, and (j) severe acute malnutrition management.


73

helping mothers (e.g. breastfeeding promotion, education about complementary feeding, provision of vitamins and micronutrients) have had fairly modest impacts on stunting, although they do affect child mortality. Moreover, scaling‐up these ‘nutrition‐sensitive’ interventions have also proven a challenge, although some countries have managed to do so with impressive results, including most recently in Peru and Senegal. These interventions are, however, relatively inexpensive, and the impact of stunting on income is sufficiently large to make nutrition‐sensitive programs a potentially worthwhile investment Galasso et al. 2017.

18. BCC can improve nutrition outcomes by changing nutrition practices through, for example, education, counseling, and social media. Spray. 2016 finds that efforts around nutrition education and BCC cover many of the factors driving malnutrition beyond infant and young child feeding, including WASH, preventive care, ANC, child psychosocial stimulation, schooling, and other parenting practices. BCC is delivered not only to beneficiaries and caregivers but also in many cases to the entire community. Supply‐side improvements such as training in nutrition best practices, counseling for health workers, and provision of nutrition‐related equipment is also common.39 USAID, 2014 provides a summary of peer‐reviewed evidence regarding the effectiveness of social and behavior change communication (SBCC) for preventing and reducing stunting:

Findings related to women’s dietary practices during pregnancy and lactation: The body of literature on the effectiveness of SBCC to improve women’s dietary practices during pregnancy and lactation is still small (only 15 peer‐reviewed studies met the inclusion criteria), but indicates that SBCC approaches can and do succeed in improving uptake of the behaviors promoted.

Findings related to breastfeeding practices (15 studies): The body of literature on the

effectiveness of SBCC approaches in improving breastfeeding practices is strong and broad

(62 peer‐reviewed studies met the inclusion criteria) and supports the claim that SBCC

approaches can and do succeed in improving uptake of the behaviors promoted. Evidence

from several studies strongly suggests that increasing the number of contacts increases the

positive effect of SBCC on breastfeeding practices.

19. Findings related to complementary feeding practices: The evidence of the effect of SBCC on complementary feeding practices is quite broad (30 studies met the inclusion criteria) and clearly indicates that SBCC interventions can improve a wide range of complementary feeding practices.

20. International evidence shows that livelihoods interventions can yield some positive results in consumption. Simulations were not performed on the potential impact of the livelihood activities given the lack of information on the design and coverage. A proper assessment will be carried out once the design is clarified with the GoR. However, the review of international evidence points to some beneficial effects derived from this type of intervention, although they could vary considerably. Productive assets, especially related to agriculture, can improve households’ resilience, positively affecting their ability to save and increasing their incomes and consumption. On the other hand, investments in cattle ownership

39 Spray, Andrea L.. 2016. Leveraging Social Protection Programs for Improved Nutrition : Report on the Proceedings of the Global Forum on Nutrition‐Sensitive Social Protection Programs, 2015. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/25337 License: CC BY 3.0 IGO.”


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present smaller effects in consumption.40 A randomized evaluation of BRAC’s ultra‐poor program in Bangladesh found beneficial effects on poor women, improving their self‐employment and labor market participation, and leading to an increase of 36 percent in their average annual income. BRAC’s intervention was implemented pairing productive assets with appropriate training.41 Similarly, J‐PAL has found that a comprehensive graduation model encompassing productive asset transfers, technical skills training, consumption support (temporary cash or food transfers), financial education, home visits and health education, can effectively help the ultra‐poor to shift from their vulnerability status. Positive outcomes include consumption increases of 7.3 percent in Bangladesh, 16.4 percent in Ethiopia, 13.6 percent in India and 10.2 percent in Pakistan, while no significant impact was observed in Peru and Honduras.42

Rationale for public sector provision

21. The provision of social protection services and redistribution are natural functions of the state, and are explicitly mentioned in Rwanda’s National Social Protection Strategy (2013–2018) and Economic Development and Poverty Reduction Strategy‐2 (2013–2018). This is especially true in absence of other effective formal or informal insurance mechanisms. The provision of direct support to the households with no earning capacity and expanded public works to moderately labor‐constrained households caring for children to support home‐based childcare work along with community‐based parenting training and supervision can generate positive externalities on human capital and the economy that cannot be fully internalized by the private agents. An investment through a national program of this nature is justified by conventional public finance principles suggesting that redistribution is a role more appropriately handled at the central level to address inter‐regional inequalities. The principle that people of similar circumstances in a country should be treated alike also underlies the rationale for investments in national safety net programs such as the VUP.

Value added of Bank’s Support

22. Over the last 8 years (2009‐2017), the Bank has been supporting the Government of Rwanda through a series of development policy operations (DPOs), which helped establish the foundation of Rwanda’s social protection system. The proposed operation capitalizes and builds upon the GoR and the Bank’s long standing commitment to expand the coverage of the flagship VUP by also introducing innovations to support labor constrained households with child caring responsibilities. In addition, the objective of further strengthening the efficiency, transparency, and accountability of country’s safety net system remains relevant. The Bank is well‐placed to provide this support based on its rich experience in the country, strong partnership with the government and other development partners, and access to the global knowledge on delivering similar services to the poor and vulnerable groups through an appropriate program mix as well as institutional arrangements.

40 Andrews, Hsiao and Ralston. The Impacts of Safety Nets in Africa – how can they contribute to development objectives? World Bank, working paper, 2017 41 Bandiera, Burgess, Das, et. Al. Asset Transfer Programme for the ultra‐poor: A randomized control trial evaluation, CPFR Working paper, 2011 42 J‐PAL (Abdul Latif Jameel Poverty Action Lab) and IPA (Innovations for Poverty Action). 2015. “Building Stable Livelihoods for the Ultra‐Poor.” Cambridge, MA: Abdul Latif Jameel Poverty Action Lab and Innovations for Poverty Action.


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The World Bank · national poverty line and 16 percent below the extreme poverty line, a reduction...

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