Greening policies and villages for poverty reduction

[Stories of Change from Africa] Set on the steep hills on the north of the country, Rubaya village, located 1507m above sea level, is a typical village in Rwanda. Heavy rainfall washes away the most fertile soil and sometimes even houses, or large chunks of the hill. Such soil erosion, precipitated by over-cultivation of the land for agriculture and inadequate soil conservation, is leading to ever lower productivity. Yet since 2010, a profound change has taken place here, for now the village serves as an inspirational model on how to integrate economic development with environmental sustainability, how to reduce poverty through reducing vulnerability, and how to make the environment everyone’s business, including those in central government. Ms. Muhawenimana Solange, the leader for the cooperative in the village, says that since the village adopted a more holistic approach to environmental sustainability ‘we are getting more crops, yields are bigger and we live in better houses’.

Soil erosion impacts significantly on people’s livelihoods as agriculture generates 80% of employment, contribute to 90% of national food needs and over 30% of GDP1. Rwanda’s economy and its people depend heavily on natural resources which are affected by unsustainable use, soil erosion, pollution, deforestation and the impact of climate change. Consequently, economic opportunities, the well-being among the poor and the achievement of national development goals are under steady decline. Since 2005, the joint UNDP-UN Environment Poverty-Environment Initiative (PEI) has supported the government of Rwanda to bring solutions to these challenges and to enhance the contribution of sound environmental management to poverty reduction. 

Unsustainable use of natural resources is expensive

The “Economic Analysis of Natural Resource Management in Rwanda”, a PEI-supported study, has helped the Government embark on a programme to adopt policies to reverse soil erosion. For example, the first EDPRS introduced a specific target on soil erosion control, and promote sustainable agricultural practices through village level interventions. The analysis found that because of environmental degradation, poverty had increased, livelihood opportunities had declined, provincial health budgets were escalating, and soil loss of 15 million tons per year was costing the country 2% of its GDP annually. This was equivalent to a reduction in the country’s capacity to feed 40, 000 people every year. 

By using the study findings, the PEI team worked together with Rwanda’s Environment Management Authority (REMA) to successfully advocate for the integration of environmental sustainability into the Economic Development and Poverty reduction Strategy (EDPRS) 2007-2013. The Ministry of Finance and Economic Planning (MINECOFIN) led and coordinate the development of the EDPRS emphasizing the importance of environmental sustainability for development and poverty reduction. 

The economic analysis contained two case studies based on two specific habitats (Gishwati forest and Rugezi wetland) demonstrating the economic value of the economic services provided by these regions. The results showed that the cost of electricity increased by up to 167% per unit cost following the degradation of the forest and the wetland. The analysis revealed that siltation from soil erosion and the reduced water levels in the lakes and in the hydropower reservoirs downstream from the Rugezi wetland decreased electricity generation and resulted in an extra cost of $65,000 per day in fossil-fuel generated electricity. 

While REMA’s ecosystem restoration efforts of the Rugezi wetland began in 2005, the 2006 economic analysis helped to make it a top priority. Increased water levels resulting from the restoration reduced hydro electricity generation and contributed to savings of $149,670/per year, and led to the construction of a 2.1 MW hydro power station and jobs for rural residents with multiplier effects for other socio-economic activities. Alongside the rehabilitation of the wetlands a large scale programme was put in place to resettle farmers and introduce more sustainable farming techniques and other income generating activities. This case has also informed other national policies, such as on energy and agriculture, to integrate more sustainable environmental practices, including amongst others, sustainable watershed management.

The Government takes the lead

Dr. Rose Mukankomeje, Director General of REMA explains that “now in Rwanda, due to the [economic] valuation, we know very well the importance of ecosystem services [and that]…it is the role of institutions like ours, to conduct assessments to bring facts to the table, share the policy recommendations, and then take proper actions”. This helps the mainstreaming of poverty-environment objectives across sectors.

In order to assess environment-related spending in different sectors, a landmark study known as the Public Environment Expenditure Review (PEER) was carried out in 2009 with the support of PEI. The review showed that only 0.4% of the overall national budget was allocated to environment and climate change. As a result, Mr. Fred Sabati, the PEI National Manager, explains that MINECOFIN made the request to all ministries to plan and budget for the environment through the annual budget call circular. To facilitate this change in planning and budgeting processes, the training of national planners and budget support staff is now an annual event. Currently, development and sector strategic plans in 30 districts of the country incorporate poverty-environment and climate change related objectives.

Now the challenge is to ensure that the integration of the environment into all sectors leads to sustainable resource management which also benefits the poor. To this extent, Rwanda created FONERWA, a National Climate and Environment Fund, in order to finance the shift to a greener, more inclusive economy. Mr. Mulisa explains that it “was designed with input from PEI to address the issue of sustainable financing of poverty-environment objectives at the national and local level.” The UK Department for International Development (DFID) operationalized the fund by supporting it with US$ 36 million. Funds are now being used to support green, climate-resilient projects related to renewable energy, ecosystem rehabilitation, sustainable land and forest management, integrated water resources management, and responsible mining. It is expected that the investments will contribute to reduce poverty for the vast majority of the Rwandan population which depends on natural resources for their livelihoods. In 2013, a second PEER PEI supported Public Expenditure Review for Environment and Climate Change noted that since 2004 Rwanda’s the country’s expenditure on the environment and climate change has increased six fold from 0.4 to 2.5 %.

Making the Environment Everybody’s Business

To demonstrate in practical terms how this could be achieved, REMA and partners, including PEI, began an initiative in 2009 which has transformed the Rubaya village (provided video and provided poster) into a model for pro-poor sustainable development. By adopting new technologies including rainwater harvesting systems, the use of biogas residue as a fertilizer, tree planting for climate proofing, and terracing agriculture productivity has increased. Excess production is being sold in the market generating an annual income of $26,000 for the women led cooperative that manages the initiatives. Moreover, having water closer to hand and biogas for cooking has saved significant time, and women and children can now spend their time on more productive activities including school work. Mrs. Solange proudly says that “before at this site, the poor people were the poorest among the poor but if you see them now, they look better off. Living conditions are better.” Today all district development plans include the objective to establish at least one green village and work have already started in Muyebe with support from REMA and the Swedish International Development Cooperation Agency (SIDA).

By presenting the quest for environmental sustainability in economic terms, as a percentage of GDP, and demonstrating change on the ground, the environment has become everybody’s business and a policy shift has occurred with poverty and environment objectives now being integrated into national and sector development, plans and budgets. REMA and the Ministry of Finance and Economic Planning continues to demonstrate leadership towards addressing environment, poverty and economic challenges through new integrated approaches in line with the new post 2015 agenda.