By Gilberthe Benimana and David Spielman
Rwanda posted an annual growth rate of 10.9 percent in 2021—a strong recovery from the downturn caused by COVID-19 in 2020. But today, as new crises upset the global economy, Rwanda must again muster the strength to navigate uncertain times and maintain its course. That means staying on track to achieve the long-term social and economic transformation outlined in the National Strategy for Transformation.
Ambitious goals require difficult decisions, and a data-driven and evidence-based approach to prioritization is critical to making those decisions. This was the motivation behind a recent learning event conducted by the International Food Policy Research Institute under its Rwanda Strategy Support Program (Rwanda SSP), and in collaboration with the Ministry of Agriculture and Animal Resources (MINAGRI).
Picture 1: Emerta Aragie, Research Fellow at IFPRI facilitating the learning session
The event focused on the tools and techniques of economic policy modeling, with a heavy dose of macro-economy theory. Participants were drawn from the ranks of MINAGRI, MINECOFIN, National Bank of Rwanda, University of Rwanda, the High Lands Centre of Leadership for Development, and the Economic Policy Research Network. Together, these participants spent a full five days getting deep into the structure and use of a computable equilibrium (CGE) model of the Rwandan economy to answer tough questions about the potential effects of changes in tax policy, trade regulations, economic recovery spending, and other public spending priorities.
The learning event was kicked off with a seminar where IFPRI presented recent research using the model to analyze alternative public investment priorities in the agriculture sector, rural economy, and food systems. The Honorable Jean-Chrysostome Ngabitsinze, Minister of State for Agriculture and Animal Resources, provided keynote remarks to kick off the seminar. He emphasized the critical importance of policy analysis to provide the evidence needed for better policy formulation, and strongly encouraged researchers to collaborate in generating and sharing their work to inform policy.
Picture 2: Dr. Jean-Chrysostome Ngabitsinze, Minister of State for Agriculture and Animal Resources, providing opening remarks
David Spielman, head of the IFPRI-Rwanda Program and Emerta Aragie, an IFPRI research fellow based in Washington, DC, discussed an application of the Rwanda CGE model to explore the accomplishments of the PSTA 4, now at its midpoint, and to consider the effects of an increased and modest reallocation of the agriculture budget on growth, employment, poverty, and diet quality outcomes in Rwanda.
These findings prompted a lively discussion among seminar participants, beginning with remarks from Chantal Ingabire, Director General of Planning at MINAGRI, who noted the importance of evidence as they consider various portfolios at MINAGRI to strengthen its food system and advance a structural transformation. The seminar was closed by Ksenija Maver, project leader at Internationale Zusammenarbeit (GIZ) GmbH, who called for continued collaboration between research organization such as IFPRI and counterparts in government, development agencies, and think tanks to expand these types of analyses.
Picture 3: David J Spielman, program leader Rwanda SSP, presenting the main results from recent IFPRI research
Following the seminar, participants in the learning event went on to tackle the Rwanda CGE model developed by IFPRI and adapted to the Rwandan context in partnership with the Ministry of Finance and Economic Planning (MINECOFIN) and the National Institute of Statistics of Rwanda (NISR). The model—a data-hungry, mathematically intricate approach to simulating alternative economic scenarios—provides analysts with a powerful tool to explore different “what if” scenarios in the Rwandan economy.
Participants first learned the theory behind CGE models and, specifically, the IFPRI model and its adaptation to Rwanda. They then discussed how to prepare the data needed to run simulations of the entire economy. Finally, they practiced running and interpreting model simulations, including scenarios that explore the impact of cash transfers, productivity shocks in agricultural and non-agricultural sectors, global price shocks on food and other commodities, and increases in government tax revenues. At the end of the week, participants reflected on how CGE models can be used in their own work to improve the evidence-base used in policy design and implementation.
Stay tuned for more to come.
About the Authors
Gilberthe Benimana Uwera is a research analyst in the IFPRI Rwanda Strategy Support Program
David J Spielman is the program leader of the IFPRI Rwanda Strategy Support Program.
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