Beneficiaries of health insurance

 

COVID-19 has triggered an unprecedented economic contraction in Rwanda. After a period of sustained growth averaging 7.8 percent over the last two decades, the economy is now estimated to have dropped to a growth rate of  -3.4 percent in 2020 and unemployment surged to 22.1 percent in May of the same year. Although recovery has begun, many people find themselves coping with levels of poverty unseen in many years.

It is in this context that Rwanda is charting a roadmap back to growth and to public health. Controlling COVID-19 and rebuilding the economy are twin goals. Their achievement will take strong will and innovation by the government and people of Rwanda.  The country’s Home-Grown Solutions (HGSs) can play a key role in this endeavor, as demonstrated in the recently released United Nations Development Programme (UNDP) National Human Development Report.

The report demonstrates the instrumental role of Rwanda’s HGSs in its social and economic development over the past 20 years. Between 2000 and 2020, life expectancy in Rwanda increased from 49 years to 67.8 years, along with significant reductions in maternal, infant and child mortality. Health, education, and the standard of living all improved significantly.

During that time, homegrown solutions contributed to improved access to health care and nutritious food and access to education.  For example:

  • The Girinka program that provides one cow per family improved food security and nutrition.
  • Collective work projects of Umuganda that had constructed 3,170 classrooms between 2006 and 2017 brought basic education infrastructure closer to where it was most needed.
  • Two components of the social protection initiative known as Vision 2020 Umurenge Program (VUP) increased household consumption and lowered poverty rates. The Direct Support component, which provides monthly cash transfers, increased participants’ consumption by 11 percent and reduced poverty by 10 percent. The Financial Services component increased consumption by 17 percent.
  • Rwanda’s Community Based Health Insurance, in which households pool resources to provide health insurance for every family member, facilitated access to health care. It contributed to decreased household expenditures in health while also making it more likely that families would seek medical care.

For sure, there is room for improvement and further innovation. The benefits of HGS have not always been shared equally with the poorest segments of the population, and not always had the intended impact.

This was the case with a third component of the VUP program, VUP-Public Works.  It offered short-term employment in public works construction and was associated with 27 percent decrease in consumption and increased poverty over time. Analysis showed that the low-pay and too-few work-days generated too little income.

Yet taken as a whole, experience with Rwanda’s Home-Grown Solutions over the past 20 years shows the powerful impact of development programs that are tailored to their specific context and that draw on community knowledge of social and economic conditions. 

Today, the profound impacts of the COVID-19 pandemic on human development demand an improved set of HGS. Inspired solutions are needed to: address the rise in poverty especially among informal sector workers; build social safety nets that strengthen communities; increase household savings, and rebuild service sectors such as tourism.

There have been some key lessons: The strategic inclusion of HGSs into recovery plans and national policies should draw on the knowledge of local people and address their aspirations and constraints. The strengthening of citizen engagement is fundamental to success. 

Investments and policies should also bolster enabling conditions such as gender equality and environmental health. Policies that recognize the connections between human and economic development and environmental health will have the strongest benefit for the poor who rely on “natural capital”—healthy soils, clean water, biodiverse forests, and wetlands—for their livelihoods. Such natural capital is the “GDP of the poor.”

Therefore, Rwanda needs to carefully consider how it measures economic progress and human well-being. Rwanda, like most countries, has gauged progress based largely on Gross Domestic Product (GDP), which accounts for goods and services produced by an economy but not for the natural assets used to produce them.

This may soon change. Rwanda recently decided to include natural resources in its GDP calculation. This is a crucial step toward more inclusive development. It places Rwanda within the global vanguard of countries that recognize the vital importance of natural capital to human development.

As the country advances its National Economic Recovery Plan and the National Strategy for Transformation, it is worth examining the role of nature in Human Development and in the country’s Home Grown Solutions. This nexus could yield solutions that both protect the economic assets of the poor and bolster crucial sectors such as agriculture and tourism.

Despite the extreme hardships of the past year, by moving forward with confidence in our own achievements and lessons learned, Rwanda’s recovery will be robust, sustainable, green, and inclusive.

 

  • Dr. Uzziel Ndagijimana is the Rwanda Minister of Finance and Economic Planning. He contributed to the National Human Development Report. Twitter: @undagijimana
  • Maxwell Gomera is the Resident Representative of the United Nations Development Program in Rwanda. He is an expert on nature and agriculture. Twitter: @GomeraM

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