## 1rwaea2023002

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### Mission, scope, and contacts
- At the request of the Ministry of Finance and Economic Planning (MINECOFIN) of Rwanda, an IMF FAD team undertook a Public Investment Management Assessment (PIMA) and Climate PIMA (C-PIMA) during January 17-28 (virtually) and April 11-22 (in person).
- Mission leadership and composition:
  - Led by Bryn Battersby; team members included Andrew Ceber (fiscal economist), Eivind Tandberg (FAD), Imran Aziz (AFE), and Willie du Preez (FAD expert).
- Funding: mission was provided with funding assistance from Japan.
- Principal meetings: Minister of State in charge of Economic Planning, Dr. Uwera Claudine; MINECOFIN directorates; Rwanda Development Board; Ministry of Infrastructure; Ministry of Local Government; Local Administrative Entities Development Agency; Ministry of Environment; Office of the Auditor General; Rwanda Public Procurement Authority; several public corporations (Rwanda Energy Group, Energy Development Corporation Limited, Water Sanitation Corporation); and district governments (City of Kigali, District of Rwamagana, District of Rubavu).
- Coordination: thanks to the Rwandan government and Mr. Emmanuel Nyirimana for coordinating mission activities.

### Key diagnostics and context
- Public investment trends and fiscal context:
  - Public investment has averaged around 10 percent of gross domestic product (GDP) since the early 2000s; given depreciation and a high growth rate, this level is only sufficient to keep the public capital stock steady.
  - Public investment increased to about 12 percent of GDP prior to COVID-19.
  - In 2019 Rwanda committed 38 percent of total expenditure to capital.
  - During the COVID-19 crisis the fiscal deficit averaged around 10 percent of GDP.
  - Total public sector debt increased to around 75 percent of GDP; debt distress risk moved from low to moderate.
  - Rwanda issued a USD620.0 million (5.0 percent of GDP) Eurobond in 2021; around USD147.5 million was earmarked for strategic investment projects.
  - Rwanda committed to using 1.0 percent of GDP of the 2021 Special Drawing Rights allocation to fund infrastructure projects.
- Composition and financing:
  - Between 2016−19 the central government accounted for almost 80 percent of total public investment; public corporations (PCs) and districts each accounted for around 10 percent.
  - Over the past five years domestic resources accounted for around 55 percent of total investment resources.
  - In 2019 investment to GDP was 12.9 percent; around 40 percent of this was financed through foreign support.
    - Of foreign support: about 45 percent was from grants, and 55 percent was from highly concessional loans.
  - The government has signed 60 PPP contracts with a total project value of around USD1.8 billion; 93 percent of these are in the energy sector.
- Efficiency and access:
  - Public investment contributed around 40 percent of GDP growth since 2000.
  - Rwanda scores 4.7 out of 7 on the World Economic Forum Infrastructure Quality Index.
  - Secondary teacher ratio rose from 0.7 per 1000 students in 2000 to 2.6 in 2017.
  - Access to drinking water increased from 45 percent to 60 percent over the same period.
  - Globally, on average around one-third of the potential impact of public investment is lost due to inefficiencies in public investment processes.
- Geography and constraints:
  - Rwanda is landlocked with complex geography; it is among the highest-cost destinations in the world for a shipping container to reach.
  - Access to public education and drinking water infrastructure lags other low-income countries but has improved; Rwanda outperforms peers on access to health infrastructure (e.g., hospital beds).
- Climate commitments:
  - Rwanda’s Updated Nationally Determined Contribution (NDC), May 2020, lists 24 adaptation measures with an anticipated cost of more than USD5.3 billion (55 percent of GDP) by 2030.
  - Total NDC cost estimated at USD11.0 billion, of which USD4.2 billion is anticipated to come from national resources.

### PIMA institutional findings (design, effectiveness, and priorities)
- Overall assessment:
  - Rwanda performs well in both institutional design and effectiveness dimensions; institutional design generally stronger than effectiveness.
  - High-strength areas: national and sectoral planning; procurement.
  - Notable weaknesses: multi-year budgeting, project appraisal operationalization, portfolio management, asset monitoring.
- Summary of strengths (selected):
  - Planning institutions: HIGH institutional strength and HIGH effectiveness for national and sectoral planning; comprehensive strategic framework; tight integration of sub-national government investment plans.
  - Procurement: HIGH institutional strength and HIGH effectiveness; procurement processes are open, transparent, and published; procurement complaints are reviewed in a timely manner.
  - Budget comprehensiveness and unity: MEDIUM institutional strength and HIGH effectiveness; most capital spending is reflected through the budget; EBUs account for 3 percent of capital spending; externally financed projects and PC projects are included in budget documents.
- Summary of weaknesses and implementation gaps (selected):
  - Multi-year budgeting: MEDIUM design but LOW effectiveness; weak relationship between forecasts, ceilings, and capital spending.
  - Project appraisal and selection: appraisal framework exists (HIGH institutional strength) but appraisal documents are not published and the 2018 project appraisal framework is not fully operationalized (MEDIUM effectiveness).
  - Investment allocation and budgeting for investment: total project costs are not included in budget documents at time of appropriation (MEDIUM design, MEDIUM effectiveness).
  - Project implementation and portfolio management: MEDIUM design but LOW effectiveness; reports of stalled and abandoned projects; no systematic data or analysis on delays or cost overruns; reallocation discouraged; limited evidence of ex-post reviews.
  - Monitoring of public assets: MEDIUM design but LOW effectiveness; OAG reports issues with accuracy of asset registers; no asset values in Government Financial Accounts; depreciation not reflected in operating statements.
  - Availability of funding: MEDIUM design and MEDIUM effectiveness; quarterly cash forecasts and commitment ceilings required but no formal requirement for timely release of funds; external funding must be held at the central bank; cash flow stoppages by the Accountant General have led to stalled and abandoned projects.
- High reform priority items include:
  - Project appraisal operationalization, multi-year budgeting linkages, budgeting for total project costs, portfolio management, and asset monitoring.

### C-PIMA (climate-focused findings)
- Scale of needs:
  - NDC adaptation measures cost: USD5.3 billion (55 percent of GDP) by 2030.
  - To fully meet NDC goals, financing costs likely to be more than 10 percent of GDP annually through to 2030.
- Institutional strengths (selected):
  - C1 Climate-aware planning: HIGH institutional strength; NDC implementation framework assigns NDC targets to sectors and activities; National Land Use Plan guides climate-sensitive land use.
  - C2 Coordination between entities: MEDIUM institutional strength; annual dialogue on NDC implementation facilitates decisions between ministries, districts, and PCs.
- C-PIMA weaknesses (selected):
  - C3 Project appraisal and selection: LOW institutional strength and HIGH reform priority; EIAs and appraisal guidelines do not clearly facilitate climate-related project appraisal; PPP framework does not address climate-related risk sharing; summaries of appraisals are not published.
  - C4 Budgeting and portfolio management: MEDIUM strength; mainstreaming partially identifies climate-related expenditure; climate-related ex-post reviews are not conducted.
  - C5 Risk management: MEDIUM strength; contingency reserve usable for natural disasters exists, but Fiscal Risk Statement analysis is qualitative.
- Overall conclusion: strong climate-aware planning but material gaps in embedding mitigation and adaptation criteria into appraisal and selection and in conducting climate-focused ex-post reviews.

### Action orientation and priority recommendations (Executive Summary and Action Plan highlights)
- Publish fiscal and project information:
  - Publish the Fiscal Risk Review of Government Investment and improve reporting/consolidation of contingent liabilities from PCs, PPPs, and districts in the Fiscal Risk Statement.
  - Make major project appraisal documents publicly available while redacting commercial secrets or sensitive information.
  - Publish project cost estimates and multi-year projections by adapting data submitted and stored in IFMIS.
  - Compile and publish the project pipeline and standard project selection criteria.
- Strengthen project appraisal and validation:
  - Fully operationalize the 2018 Project Appraisal Guidelines and institute a robust, well-documented project validation process by MINECOFIN.
- Improve multi-year budgeting and links to annual capital budgets:
  - Strengthen linkage between MTFF/MTEF ceilings and annual capital budgets; issue multiyear budget ceilings at BA and district level earlier in the budget preparation process.
- Improve implementation, monitoring, and ex-post evaluation:
  - Improve portfolio management, systematic monitoring, and ex-post evaluation of projects; require ex-post evaluations for large projects.
  - Prepare and publish clear guidelines on when project payments may be withheld.
- Enhance asset management:
  - Include asset values in Government Financial Accounts and ensure depreciation is reflected in operating statements.
- Incorporate climate criteria into PIM:
  - Produce and require use of methodologies to assess GHG impact and climate resilience in feasibility studies.
  - Prepare specific selection criteria addressing mitigation and adaptation and update PPP guidelines on climate risk allocation.
  - Explore options to tag climate change-related investments in the budget.
  - Expand the Fiscal Risk Statement to include quantitative analysis of climate-related fiscal risks.
- Timing and responsibilities (selected, as presented):
  - Recommendation 1.1 Publish Fiscal Risk Review — Responsible: PC oversight, Treasury, and Macroeconomic Dept. — Timeline: 2022.
  - Recommendation 1.2 Operationalize 2018 Project Appraisal Guidelines — Responsible: MINECOFIN National Investment Dept. — Timeline: 2022-23.
  - Recommendation 1.3 Publish appraisal documents — Responsible: MINECOFIN National Investment Dept. — Timeline: 2022-23.
  - Recommendation 2.1 Issue earlier multiyear ceilings — Responsible: MINECOFIN Budget, Planning, Macro Depts. — Timeline: 2022.
  - Recommendation 2.2 Publish project costs and multiyear projections via IFMIS — Responsible: MINECOFIN National Investment Dept. — Timeline: 2023.
  - Recommendation 3.1 Publish guidelines on withholding payments — Responsible: Accountant General’s Department — Timeline: 2022.
  - Recommendation 3.2 Strengthen ex-post evaluations — Responsible: Line ministries — Timeline: 2023.
  - Recommendation 3.3 Include asset values in financial statements — Responsible: MINECOFIN — Timeline: 2022.
  - Recommendation 4.1–4.5 (climate PIM actions) — Responsible: MINECOFIN, National Investment Dept, MINALOC, Environment, Rwanda Development Board, and others — Timelines: 2022–2023.

### Selected key statistics and diagnostic figures (verbatim preservation)
- Public investment averages and shares:
  - Public investment has averaged around 10 percent of GDP since the early 2000s.
  - Public investment increased to about 12 percent of GDP prior to COVID-19.
  - In 2019 Rwanda committed 38 percent of total expenditure to capital.
  - Investment to GDP in 2019 was 12.9 percent; around 40 percent financed through foreign support.
- Debt and financing:
  - Total public sector debt increased to around 75 percent of GDP.
  - Rwanda issued a USD620.0 million (5.0 percent of GDP) Eurobond in 2021; around USD147.5 million was earmarked for strategic investment projects.
  - Government signed 60 PPP contracts with total project value of around USD1.8 billion; 93 percent in the energy sector.
- NDC and climate finance:
  - NDC adaptation cost: USD5.3 billion (55 percent of GDP) by 2030.
  - Total NDC cost: USD11.0 billion, with USD4.2 billion anticipated from national resources.
  - To fully meet the NDC goals, financing costs are likely to be more than 10 percent of GDP annually through to 2030.
- Project pipeline and portfolio:
  - Public Investment Plan spreadsheet: 471 projects total; 48 pipeline (USD1.2 billion) and 423 active ongoing projects (USD8.2 billion).
  - Evidence of stalled/abandoned projects amounted to 3 percent of total capital spending in 2020.
  - OAG found 62 cases of delayed contracts worth RWF216 billion (1.8 percent of GDP) in 38 public entities and projects (2020 audits).
  - Public entities had abandoned contracts worth RWF11.7 billion (0.1 percent of GDP) identified by audit completion (two cases worth RWF795 million during the year under audit; two prior cases worth RWF10.9 billion still abandoned).
- Budget ceiling variances (Table 5 examples):
  - FY2016-17: Second Budget Call Circular Ceiling 716.1; Finance Law 785.7; Absolute Percentage Change 10
  - FY2017-18: Second Budget Call Circular Ceiling 791.3; Finance Law 771.9; Absolute Percentage Change 2
  - FY2018-19: Second Budget Call Circular Ceiling 646.5; Finance Law 897.1; Absolute Percentage Change 39
- Procurement (Table 8 — 2018/19):
  - Tender value by category (RWF billions / Percentage): Goods 160; 26 — Works 368; 61 — Services 74; 121 — Total 604; 100
  - Tender counts (Number / Percentage): Goods 4,272; 76.25 — Works 725; 12.99 — Services 586; 10.50 — Total 5,583; 100.00
  - By method (Value and Number): Single Sourcing 184; 30; 316; 5.66 — Open 327; 54; 4,410; 78.99 — Other 93; 16; 1,173; 15.35 — Total 604; 100; 5,583; 100.00
- Appeals (Table 9 — 2010 to 2021):
  - Admissible and founded appeals: 36; 31.6
  - Admissible and unfounded appeals: 60; 52.5
  - Inadmissible appeals: 04; 3.5
  - Terminated procurement proceedings: 07; 6.0
  - No mandate: 04; 3.5
  - Withdrawn appeals: 02; 1.8
  - Appeal against decision: 01; 0.9
  - TOTAL: 114
- Maintenance guidance (LODA minimum maintenance costs — Table 7 examples):
  - Transport Infrastructure / Roads / 2 / 5-10 (South African percentages)
  - School Infrastructure / School buildings and related infrastructure / 2 / 4-6
  - Public Health Infrastructure / Health Centers and related Infrastructure / 2 / 5-8

### IT systems, institutional capacity, and proposed reforms
- IT and IFMIS developments:
  - IFMIS is being expanded to include a project module to cover planning, project review, selection for budgeting, project execution, and monitoring and reporting.
  - Planned project module functions include: require project costs and indicators at concept; two-stage project review and scoring in IFMIS; push approved projects into the budget module; quarterly reporting on milestones and deviations.
  - Districts have a financial management information system; PPP information is currently collected in Excel; planned consolidation into IFMIS.
- Institutional capacity and staffing:
  - National Investment Department staffing: nine staff members (a department head, four project design specialists, and four project design officers).
  - Accountant General’s Department: a team of three people oversees PCs.
  - Rwanda Development Board: six officers responsible for reviewing over 400 EIAs each year.
- Proposed revised budget calendar (Annex 4 high-level stages):
  - Stage 1: Calculate the baseline — June/August to October activities including training, issuance of 1st budget call circular, baseline calculation, macro forecast.
  - Stage 2: Set early expenditure ceilings — First half of November submission to Cabinet; End of November Budget Outlook Paper issuance; Beginning of December second budget call circular.
  - Stage 3: BA and district prioritization and drafting — December to April activities culminating in BFP publication in April and final budget approval in June.
  - Note: adoption may require amendment to Article 17 of the Ministerial Order of Financial Regulations.
- Action Plan excerpts (Annex 1):
  - Planning actions with timing 2022–2023 across Fiscal Risk Review publication, operationalizing appraisal guidelines, IFMIS development, and publication of appraisal documents.
  - Allocation and implementation actions with timing 2022–2023 covering earlier ceilings, publishing project costs and pipelines, maintenance methodologies, guidelines on withholding payments, ex-post evaluations, and inclusion of asset values in consolidated financial statements.
  - Climate PIMA actions with timing 2022–2023 covering methodologies for GHG and resilience assessment, PPP guideline updates, budget tagging exploration, and quantitative fiscal risk analysis.

### Detailed PIMA scores (Institutional Design / Effectiveness — Annex 3)
- Selected indicator scores (verbatim):
  - 1.a. Institutional Design: 2 / Effectiveness: 2
  - 2.a. Institutional Design: 3 / Effectiveness: 3
  - 3.b. Institutional Design: 1 / Effectiveness: 2
  - 4.c. Institutional Design: 3 / Effectiveness: 1
  - 6.b. Institutional Design: 2 / Effectiveness: 1
  - 8.a. Institutional Design: 1 / Effectiveness: 1
  - 11.a. Institutional Design: 3 / Effectiveness: 2
  - 11.b. Institutional Design: 3 / Effectiveness: 3
  - 12.c. Institutional Design: 3 / Effectiveness: 3
  - 13.a. Institutional Design: 3 / Effectiveness: 1
  - 14.c. Institutional Design: 3 / Effectiveness: 3
  - 15.a. Institutional Design: 3 / Effectiveness: 2
- Full list of 1–15 indicators and corresponding Institutional Design and Effectiveness scores preserved in Annex 3 of the source.

*IMF Fiscal Affairs Department mission report: Public Investment Management Assessment (PIMA) and Climate PIMA for Rwanda (Preface, Executive Summary, and selected chapters and annexes).*

### Preface ____________________________________________________________________________ 7

### 1rwaea2023002 - Preface

### Mission and scope
- At the request of the Ministry of Finance and Economic Planning (MINECOFIN) of Rwanda, an IMF FAD team undertook a Public Investment Management Assessment (PIMA) and Climate PIMA (C-PIMA) during January 17-28 (virtually) and April 11-22 (in person).
- Mission leadership and composition: led by Bryn Battersby; team members included Andrew Ceber (fiscal economist), Eivind Tandberg (FAD), Imran Aziz (AFE), and Willie du Preez (FAD expert).
- The mission was provided with funding assistance from Japan.
- The mission met the Minister of State in charge of Economic Planning, Dr. Uwera Claudine, and held meetings with a wide set of national and subnational entities, including MINECOFIN directorates, the Rwanda Development Board, Ministry of Infrastructure, Ministry of Local Government, Local Administrative Entities Development Agency, Ministry of Environment, Office of the Auditor General, Rwanda Public Procurement Authority, several public corporations (Rwanda Energy Group, Energy Development Corporation Limited, Water Sanitation Corporation), and district governments (City of Kigali, District of Rwamagana, District of Rubavu).
- The mission thanks the Rwandan government for cooperation and Mr. Emmanuel Nyirimana for coordinating mission activities.

### Key diagnostics and context
- Public investment has averaged around 10 percent of gross domestic product (GDP) since the early 2000s; given depreciation and a high growth rate, this level is only sufficient to keep the public capital stock steady.
- Recent acceleration in investment includes large public-sector projects such as the Kigali Convention Center, the Kigali Arena, and Bugesera International Airport, resulting in Rwanda’s level of public investment now being well above comparator countries and other low-income developing countries.
- Rwanda is landlocked with complex geography; it is among the highest-cost destinations in the world for a shipping container to reach.
- Access to public education and drinking water infrastructure lags other low-income countries but has improved significantly in the past decade; Rwanda outperforms peers on access to health infrastructure (e.g., hospital beds).

### PIMA institutional findings (design and effectiveness)
- Overall: Rwanda performs well in both the design and effectiveness dimensions of the PIMA diagnostic, scoring particularly strongly on institutional design and somewhat less on effectiveness.
- Strengths:
  - Planning institutions: HIGH institutional strength and HIGH effectiveness for national and sectoral planning; comprehensive strategic framework; tight integration of sub-national government investment plans.
  - Procurement: HIGH in institutional strength and HIGH in effectiveness; procurement is open and transparent; procurement processes are published; procurement complaints are reviewed in a timely manner.
  - Budget comprehensiveness and unity: MEDIUM institutional strength and HIGH effectiveness; most capital spending is reflected through the budget; EBUs account for 3 percent of capital spending; externally financed projects and public corporation (PC) projects are included in budget documents.
- Weaknesses and implementation gaps:
  - Multi-year budgeting: MEDIUM design but LOW effectiveness; weak relationship between forecasts, ceilings, and capital spending.
  - Project appraisal and selection: appraisal framework exists (HIGH institutional strength) but appraisal documents are not published and the 2018 project appraisal framework is not fully operationalized (MEDIUM effectiveness); project appraisal documentation and ex-post reviews are insufficiently documented.
  - Investment allocation and budgeting for investment: information on total project costs is not included in budget documents at time of appropriation (MEDIUM design, MEDIUM effectiveness issues).
  - Project implementation and portfolio management: reports of stalled and abandoned projects; MEDIUM design but LOW effectiveness for portfolio management and oversight; no systematic data or analysis on delays or cost overruns; reallocation discouraged; limited evidence of ex-post reviews.
  - Monitoring of public assets: MEDIUM design but LOW effectiveness; OAG reports issues with accuracy of asset registers; no asset values in Government Financial Accounts; depreciation not reflected in operating statements.
  - Availability of funding: MEDIUM design and MEDIUM effectiveness; quarterly cash forecasts and commitments required but no formal requirement for timely release of funds; external funding must be held at the central bank; cash flow stoppages by the Accountant General have led to stalled and abandoned projects.
- Table-level highlights (PIMA summary categories and reform priorities):
  - High reform priority items include: project appraisal operationalization, multi-year budgeting linkages, budgeting for total project costs, portfolio management and asset monitoring.
  - Medium and low reform priorities are assigned across other PIMA elements per assessed design and effectiveness (see diagnostic tables in source).

### Climate-related public investment findings (C-PIMA)
- Climate investment needs and scale:
  - Rwanda’s Updated Nationally Determined Contribution (NDC), May 2020, lists 24 adaptation measures with an anticipated cost of more than USD5.3 billion (55 percent of GDP) by 2030.
- C-PIMA institutional strengths:
  - C1 Climate-aware planning: HIGH institutional strength; public investment planning incorporates climate considerations; National Land Use Plan guides climate-sensitive land use; the NDC implementation framework assigns NDC targets to sectors and activities.
  - C2 Coordination between entities: MEDIUM institutional strength; annual dialogue on NDC implementation facilitates decisions between ministries, districts, and PCs, but there are no standard shadow prices for GHG emissions and no climate-specific decision criteria in public investment allocations.
- C-PIMA weaknesses:
  - C3 Project appraisal and selection: LOW institutional strength and high reform priority; unclear whether EIA guidelines facilitate climate-related project appraisal and selection; PPP framework does not address climate-related risk sharing; summaries of appraisals are not published.
  - C4 Budgeting and portfolio management: MEDIUM strength; mainstreaming processes partially identify climate-related expenditure; some asset policies address climate risks; climate-related ex-post reviews are not conducted.
  - C5 Risk management: MEDIUM strength; comprehensive risk management strategy in place and budget includes a contingency reserve usable for natural disasters.
- Overall: strong climate-aware planning but material gaps in embedding mitigation and adaptation criteria into project appraisal and selection, and in conducting climate-focused ex-post reviews.

### Cross-cutting institutional and transparency issues
- Many institutions would improve with small changes such as publication of relevant material; transparency gaps recur across PIMA and C-PIMA pillars.
- Key documents and data that are often unpublished include:
  - Fiscal Risk Review of the Government Portfolio;
  - costs of individual projects and their multi-year projections;
  - the list of Public-Private Partnership projects and projects undertaken by public corporations;
  - project selection criteria.
- Publishing these documents and data would strengthen scrutiny and accountability and is highlighted as an important set of reforms.

### Action orientation and recommendations summary
- Annex 1 of the source contains an action plan of recommendations proposed throughout the diagnostic.
- Among the most important recommended actions highlighted in the Executive Summary:
  - Fully operationalize the 2018 Project Appraisal Guidelines.
  - Improve transparency by publishing appraisal documents, project cost estimates and multi-year projections, the Fiscal Risk Review of the Government Portfolio, the list of PPPs and PC projects, and standardized project selection criteria.
  - Strengthen the linkage between MTFF/MTEF ceilings and annual capital budgets to address the weak relationship between forecasts, ceilings, and capital spending.
  - Improve portfolio management, systematic monitoring, and ex-post evaluation of projects to address stalled and abandoned projects, time and cost overruns, and lack of systematic data on delays and cost overruns.
  - Enhance asset management practices to ensure accurate asset registers, inclusion of asset values in Government Financial Accounts, and reflection of depreciation in operating statements.
  - Incorporate climate mitigation and adaptation criteria into project appraisal and selection, and institute climate-related ex-post reviews.
- The recommendations are summarized in Table 3 and detailed in the Action Plan (Annex 1) of the source.

*IMF Fiscal Affairs Department mission report: Public Investment Management Assessment (PIMA) and Climate PIMA for Rwanda (Preface and Executive Summary).*

### 1. Improve Investment Planning

### 1. Improve Investment Planning

### 1. Improve Investment Planning — Recommended Actions and Responsibilities
- 1.1 Publish the Fiscal Risk Review of Government Investment and improve reporting of contingent liabilities from PCs, PPPs, and districts.  
  - Responsible: PC oversight, Treasury, and Macroeconomic Dept.  
  - Timeline: 2022
- 1.2 Operationalize the 2018 Project Appraisal Guidelines, including a robust and well-documented project validation process by MINECOFIN.  
  - Responsible: MINECOFIN National Investment Dept.  
  - Timeline: 2022-23
- 1.3 Make all major project appraisal documents publicly available while redacting any commercial secrets or sensitive information.  
  - Responsible: MINECOFIN National Investment Dept.  
  - Timeline: 2022-23

### 2. Improve Investment Allocation — Recommended Actions and Responsibilities
- 2.1 Issue multiyear budget ceilings at the BA and district level earlier in the budget preparation process.  
  - Responsible: MINECOFIN Budget, Planning, Macro Depts.  
  - Timeline: 2022
- 2.2 Publish project costs and multiyear projections by adapting the data that is submitted and stored in the IFMIS.  
  - Responsible: MINECOFIN National Investment Dept.  
  - Timeline: 2023
- 2.3 Develop specific methodologies and thresholds for routine and major maintenance.  
  - Responsible: Line ministries  
  - Timeline: 2022
- 2.4 Automate and publish a pipeline of appraised major projects and publish project selection criteria.  
  - Responsible: MINECOFIN National Investment, IFMIS Depts.  
  - Timeline: 2022

### 3. Improve Investment Implementation — Recommended Actions and Responsibilities
- 3.1 Prepare and publish clear guidelines on when project payments may be withheld.  
  - Responsible: Accountant General’s Department  
  - Timeline: 2022
- 3.2 Strengthen the ex-post evaluation process and require evaluations for large projects.  
  - Responsible: Line ministries  
  - Timeline: 2023
- 3.3 Include asset values in the financial statements and consolidated asset values in the Consolidated Financial Statements.  
  - Responsible: MINECOFIN  
  - Timeline: 2022

### 4. Improve the Sensitivity of Public Investment Management to Climate Change — Recommended Actions and Responsibilities
- 4.1 Produce and require the use of methodologies to assess the GHG impact and climate change-resilience of projects in feasibility studies.  
  - Responsible: MINECOFIN, National Investment Dept, MINALOC, Environment  
  - Timeline: 2023
- 4.2 Prepare specific selection criteria addressing the mitigation and adaptation aspects of projects and produce relevant guidance.  
  - Responsible: MINECOFIN  
  - Timeline: 2023
- 4.3 Update the 2018 PPP guidelines to provide specific guidance on the sharing of climate change-related risks in PPP contracts.  
  - Responsible: Rwanda Development Board  
  - Timeline: 2023
- 4.4 Explore options to tag climate change-related investments in the budget.  
  - Responsible: MINECOFIN Budget, Accountant General and IFMIS Dept.  
  - Timeline: 2022
- 4.5 Expand the Fiscal Risk Statement to include quantitative analysis of the fiscal risks related to climate change.  
  - Responsible: MINECOFIN Macro Dept.  
  - Timeline: 2023

### A. Public Investment, Capital Stock, and Fiscal Policy — Key Findings and Statistics
- Rwanda experienced robust growth over the past 25 years; per capita incomes more than tripled and output performance surpassed comparator countries.
- Public investment contributed around 40 percent of GDP growth since 2000.
- Public investment has averaged around 10 percent of GDP since the early 2000s, increasing to about 12 percent of GDP prior to COVID-19.
- Public investment was directed in 2020 and 2021 toward school construction, healthcare resilience, and vaccination.
- Rwanda’s public investment is well above comparators and low-income countries; comparators averaged around 8 percent of GDP over the last five years, while Rwanda saw rates well above 10 percent of GDP.
- Rwanda has ambitious investment and climate commitments that will sustain high investment into the middle half of this decade.
- The capital stock declined before 2007 as public investment fell to around 4 percent in 2004, then rose from 2007 onwards; maintaining the capital stock ratio to GDP requires new public investment to first cover depreciation.
- In 2019 Rwanda committed 38 percent of total expenditure to capital.
- During the COVID-19 crisis the fiscal deficit averaged around 10 percent of GDP.
- Total public sector debt increased to around 75 percent of GDP; the risk of debt distress shifted from low to moderate.
- Rwanda has limited fiscal space; IMF-supported fiscal consolidation targets revenue mobilization and recurrent spending while maintaining high public sector investment.

### B. Composition and Financing of Public Investment — Key Findings and Statistics
- Between 2016−19 the central government accounted for almost 80 percent of total public investment; PCs and districts each accounted for around 10 percent.
- Major projects have focused on energy, water, and road infrastructure.
- Over the past five years domestic resources accounted for around 55 percent of total investment resources.
- In 2019 investment to GDP was 12.9 percent; around 40 percent of this was financed through foreign support.
  - Of foreign support: about 45 percent was from grants, and 55 percent was from highly concessional loans.
- In 2021 Rwanda issued a USD620.0 million (5.0 percent of GDP) Eurobond; around USD147.5 million was earmarked for strategic investment projects.
- Rwanda committed to using 1.0 percent of GDP of the 2021 Special Drawing Rights allocation to fund infrastructure projects.
- The government has signed 60 PPP contracts with a total project value of around USD1.8 billion; 93 percent of these are in the energy sector.

### II. The Efficiency of Public Investment — Key Findings
- Measures of infrastructure access are mixed: access to hospital beds outperforms peers, while education and water infrastructure access are below comparator countries.
- Secondary teacher ratio increased from 0.7 per 1000 students in 2000 to 2.6 in 2017.
- Access to drinking water increased from 45 percent to 60 percent over the same period.
- Rwanda scores 4.7 out of 7 on the World Economic Forum Infrastructure Quality Index, above low-income developing country and Sub-Saharan Africa averages.
- Under the IMF hybrid indicator combining quality and access, Rwanda sits at the public investment efficiency frontier; as capital stock grows Rwanda needs to improve both quality and access to remain on the frontier.
- Globally, on average around one-third of the potential impact of public investment is lost due to inefficiencies in public investment processes.

### III. Public Investment Management Institutions — PIMA Framework and Assessment Approach
- The IMF’s Public Investment Management Assessment (PIMA) framework assesses the quality of public investment management and identifies practical recommendations.
- PIMA evaluates 15 institutions across three stages of the public investment cycle: planning, allocation, and delivery.
- For each institution three indicators are analyzed and scored on institutional design, effectiveness, and reform priority.
  - Institutional design: whether organizations, policies, rules, and procedures are in place (scores: high, medium, low).
  - Effectiveness: degree to which intended purpose is achieved (scores: high, medium, low).
  - Reform priority: importance of improving issues given Rwanda’s specific conditions.

*Source: IMF Technical Assistance Report, "1. Improve Investment Planning".*

### 15.      Rwanda’s institutions for managing public investment compare very well against other

### 15.      Rwanda’s institutions for managing public investment compare very well against other

### Overview
- Rwanda scores strongly on institutional design and effectiveness for national and sectoral planning, coordination across government, and procurement, but is relatively weaker in some allocation institutions, including multi-year budgeting and budgeting for investment.
- Institutional design is generally stronger than institutional effectiveness; notable gaps exist where recent institutional changes are yet to be fully effective (project appraisal, portfolio management, public asset monitoring).
- Small changes—particularly around transparency and publication of existing information—would improve both institutional design and effectiveness.

### C. Investment Planning

#### 1. Fiscal Principles or Rules (Strength— Medium; Effectiveness—Medium; Reform Priority—Low)
- Key elements:
  - Rwanda publishes a medium-term fiscal framework (MTFF) with a stated fiscal limit and the supranational fiscal rules of the East African Community (EAC).
  - Under the Policy Coordination Instrument program, Rwanda committed to a deficit target of under 5.5 percent of GDP as a rolling average for the central government fiscal deficit.
  - Under EAC convergence criteria, Rwanda committed to a central government deficit rule of no more than 3 percent of GDP and a 50 percent of GDP ceiling on the present value of gross public debt.
  - The MTFF anchors the annual budget but does not distinguish between new and ongoing projects nor identify fiscal space for new projects.
- Observed issues and metrics:
  - The deficit was forecast to exceed the EAC supranational fiscal rule of 3 percent of GDP in each Budget Framework Paper (BFP) from 2016-17 to 2019-20.
  - The average discrepancy between the forecast for annual expenditure in the first year of the MTFF and the budgeted annual expenditure in the Annual State Finance Law was around 0.75 percent of GDP between 2016-17 and 2019-20.
  - Debt dynamics (present-value and nominal): "In present value terms, debt-to-GDP was around 40 percent in 2022 and was forecast to remain under the EAC ceiling of 50 percent of GDP in the medium term in the Medium-Term Debt Strategy. Debt-to-GDP rose sharply during the pandemic, from around 56 percent in 2019 to over 73 percent in 2021. Subsequently, the fiscal target under the Policy Coordination Instrument program was changed to achieving a path that reaches a debt to GDP of below 65 percent by 2029."
- Recommendations for transparency and MTFF—budget comparability:
  - Improve comparability between MTFF and the budget (directly comparable tables, including breakdown of capital spending into ongoing and new projects).

#### 2. National and Sectoral Plans (Strength— High; Effectiveness—High; Reform Priority—Low)
- Findings:
  - Comprehensive strategic framework: Rwanda Vision 2050 and National Strategy for Transformation 2017-2024 underpin sectoral and district strategies.
  - Sector strategies cover all major programs and projects regardless of funding source; annexes specify most major investment projects.
  - Sector strategies include overall cost estimates and financing strategies, but there is no costing of individual major projects.
  - Detailed outcome and output targets for major programs are included.
  - Performance management system (Imihigo) provides regular tracking; joint sector reviews and agency performance plans/reports are used, though project names/descriptions may evolve and there is no single table comparing sector strategies to performance reports.
- Suggested transparency improvements:
  - Systematic publication of project appraisal reports and PC oversight reports would positively impact planning.
  - More systematic references to projects in sector performance reports would add transparency.

#### 3. Coordination Between Entities (Strength— Medium; Effectiveness— Medium; Reform Priority— Medium)
- Findings:
  - District investment plans are integrated with central planning; district budget proposals are centrally reviewed and endorsed and included in annual budget documents.
  - MINALOC officials indicated the annual transfer to district development projects should be at least 10 percent of central government revenues.
  - Distribution of development funds among districts is determined in the annual budget process, guided by an internal MINECOFIN policy (geographical size, population, poverty levels), but not based on legally binding rules.
  - No central government guarantees to districts and no systematic reporting or monitoring of other district contingent liabilities.
  - Fiscal risks related to central government guarantees to PCs and PPPs are described in the Fiscal Risk Statement; other contingent liabilities of PCs are required to be reported in each PC’s financial statements but are not consolidated or presented in the Fiscal Risk Statement, government financial statements, or the (unpublished) Fiscal Risk Review of Government Investment.
- Priority for improvement:
  - Improvements in reporting contingent liabilities are a medium priority; consolidation of contingent liabilities of PCs, PPPs, and districts in the Fiscal Risk Statement is required.

#### 4. Project Appraisal (Strength— High; Effectiveness— Medium; Reform Priority—High)
- Findings:
  - MINECOFIN has issued detailed guidelines for project appraisal (Guidelines for preparation and assessment of Feasibility Study Reports of Projects at Central Government level in Rwanda), distinguishing small, medium, and major projects and including methodologies for risk analysis.
  - Appraisal requirements for major projects are very stringent; a risk-analysis checklist is specified (sensitivity analysis, scenario analysis, downside scenarios such as increases of 25 percent on construction costs, delays of 6/12/24 months, increases of 25 percent on annual operating costs, risk prevention/mitigation, probabilistic risk analysis).
  - In practice, feasibility studies and appraisal documents are not published and there is no requirement for external review.
  - The appraisal framework from the 2018 guidelines is not yet fully effective; MINECOFIN capacity and procedures are still being established. The appraisal process is not well documented; no publicly available documentation demonstrates rigorous validation by MINECOFIN.
  - MINECOFIN maintains a spreadsheet database of proposed and ongoing projects but it contains minimal information and is mainly used for budgeting purposes.
  - Projects financed by international finance institutions are generally subject to stringent appraisal by those institutions.
  - The Government Integrated Financial Management and Information System (IFMIS) is being expanded to include a project module, which will enhance appraisal effectiveness.
- High-priority recommendations:
  - Operationalize the 2018 Project Appraisal Guidelines, including a robust and well-documented project validation process by MINECOFIN.
  - Make all major project appraisal documents publicly available while redacting any commercial secrets or sensitive information.
  - Systematic application and publication of appraisal documents to enable external scrutiny and improve quality of decisions.

#### 5. Alternative Infrastructure Financing (Strength— High; Effectiveness— Medium; Reform Priority— Medium)
- Findings:
  - The 2017 National Investment Policy emphasizes expanding private sector involvement; private companies generally allowed in infrastructure markets with some exceptions.
  - Regulatory and facilitation institutions: Rwanda Utility Regulatory Authority, Rwanda Development Board, Rwanda Inspectorate, Competition and Consumer Protection Authority.
  - Market structures and private market shares (as reported):
    - Telecommunications: Competitive, Private market share 99
    - Electricity generation: Competitive, Private market share 25
    - Electricity transmission: Transmission - State monopoly (no private market share listed)
    - Electricity distribution: Off-grid is competitive, Distribution private market share 52
    - Land transport: Competitive, Private market share 100
    - Air transport: Competitive, Private market share ?
    - Water infrastructure: Water operations - Public; Competitive in districts; Water operations private market share 30
  - Legislation: PPP law (Law Governing PPPs in Rwanda (2016)) and Public Private Partnership Guidelines (2018).
  - Only a few PPPs fully developed under the PPP law; only one PPP completed (Kigali Bulk Water project reached financial closure in 2017 and began operations in 2021).
  - PC investments: most financed from the budget; oversight of budget-funded and development partner-funded PC investments is extensive; oversight of PC investments financed by own resources is limited (reported to be very limited).
  - Example: Rwanda Energy Group had capital investments of RWF147 billion in 2021, all financed by grants and loans from the government and development partners.
  - Fiscal Risk Review of Government Investment has comprehensive coverage of public corporations but is not published, undermining effectiveness.
- Medium-priority recommendation:
  - Increase transparency around PC investments and financial performance, including publishing the Fiscal Risk Review of Government Investment.

### D. Investment Allocation

#### 6. Multi-year Budgeting (Strength— Medium; Effectiveness— Low; Reform Priority—High)
- Findings:
  - Budget documents include medium-term capital spending projections at an aggregated level and indicative multi-year ceilings, but do not reflect total project costs.
  - Projections of total capital spending are forecast at the project level by budget agencies and districts and published at an aggregate level in the BFP.
  - Multi-year ceilings are first issued in February (five months before the start of the fiscal year) and are indicative—amendable during budget consultations.
  - Ceilings comprise domestic and externally financed components for the development budget and recurrent spending for BAs and districts.
  - Total construction costs of projects are not published, although this information is stored in the IFMIS and local government management information system.
- Implication:
  - The lack of published total project cost information limits the usefulness of multi-year ceilings for informed investment allocation and monitoring.

### Recommendations (consolidated from sections above)
- Publish the annual Fiscal Risk Review of Government Investment and improve reporting of contingent liabilities from PCs, PPPs, and districts; provide a consolidated overview in a published Fiscal Risk Statement.
- Operationalize the 2018 Project Appraisal Guidelines, including a robust and well-documented project validation process by MINECOFIN.
- Make all major project appraisal documents publicly available while redacting commercial secrets or sensitive information.
- Improve comparability between the MTFF and the Annual State Finance Law (directly comparable tables, breakdown of capital spending into ongoing and new projects).
- Enhance transparency and consolidation of contingent liabilities of PCs, PPPs, and districts in the Fiscal Risk Statement.
- Increase transparency around PC investments and financial performance, including publishing the Fiscal Risk Review of Government Investment.
- Expand IFMIS project module and ensure project-level total construction costs are published to support multi-year budgeting and investment allocation.

*Source: IMF Staff, IMF Technical Assistance Report (chapter content).*

### 34.      While the medium-term expenditure framework (MTEF) is well-established and closely

### 1rwaea2023002 - 34.      While the medium-term expenditure framework (MTEF) is well-established and closely aligned to Rwanda’s fiscal strategy, it is not a reliable anchor for projecting capital spending over the medium term.

### MTEF performance and deviations in capital spending
- Aggregate capital budget allocations deviate from the budget.
- In the previous three financial years before COVID-19, spending exceeded the development budget ceiling with an average deviation of 11 percent.
- Multi-year ceilings are issued late compared to neighboring EAC countries (Uganda and Kenya).
- There was a 17 percent variation between the ceilings in the second budget call circular and the Annual State Finance Law in the three years before the pandemic.
- The lack of publication for project costs means changes in construction costs are not identified or explained to guide budget decision-making.
- Table 5: Variance between Budget Capital Ceilings and the Finance Law (RWF billions and percentage change)
  - FY2016-17: Second Budget Call Circular Ceiling 716.1; Finance Law 785.7; Absolute Percentage Change 10
  - FY2017-18: Second Budget Call Circular Ceiling 791.3; Finance Law 771.9; Absolute Percentage Change 2
  - FY2018-19: Second Budget Call Circular Ceiling 646.5; Finance Law 897.1; Absolute Percentage Change 39

### Strengthening the budget calendar and enforcing ceilings (Box 2 — three stages)
- Stage 1: Calculating the budget baseline
  - Improve costing of existing projects (capital budget baseline) with sharper focus on costing techniques and methodologies.
  - Integrate methodologies into IFMIS to support National Investment Department multi-year projections.
  - Accurately estimate multi-year commitments, including expropriation costs, counterpart funding, and other major cost drivers.
  - Expand the first budget call circular to provide instructions guiding this process.
- Stage 2: Set early expenditure ceilings
  - BA and district expenditure ceilings for the development budget to be communicated earlier as part of the Budget Outlook Paper in November.
  - Compare ceilings with budget baseline results to indicate any fiscal gap with fiscal objectives, targets, and rules.
  - High-level investment priorities communicated to Cabinet for approval before issuance in the second budget call circular.
- Stage 3: BA and district prioritization
  - From November to March, BAs and districts prioritize project allocations within expenditure ceilings, ensuring ongoing projects are adequately funded.
  - Basis for Public Investment Committee (PIC) hearing in January and quality assurance and budget challenge roles by National Investment Department, LODA, and Rwanda Development Board.
  - By BFP publication in April, deliberations finalized and ceilings binding.

- Note: Article 17 of the Ministerial Order of Financial Regulations would require amendment if this approach is adopted.

### Project cost transparency and IFMIS integration
- Capturing and publishing project costs and revisions is important to ensure changes are known and accounted for.
- No costs are published currently; no visibility on revisions or explanations for changes.
- Project costs could be added to existing annexes or presented in a supplementary document; Annex 5 offers a potential format.
- IFMIS adoption could be quick, drawing on in-house IT expertise (see Section IV.B).

### Budget comprehensiveness and extra-budgetary units (EBUs), PCs, and PPPs
- Strong legal and regulatory framework covers public investments by EBUs, PCs, and PPPs; recurrent and development budgets prepared and presented together.
- EBUs must disclose plans to spend retained revenues as part of the second budget call circular.
- Detailed project annex to the budget (Annex II-3) is comprehensive and includes externally financed projects and public investments by public corporations funded through the government budget.
- Total capital and recurrent budgets prepared and presented by MINECOFIN based on fully integrated program and functional classifications by each ministry and BA.
- EBUs have accounted for only 3 percent of total capital expenditure on average (assessment of the three most recent years).
- The most significant capital projects (including EBUs) are disclosed individually and by funding sources except for PPPs and some significant PCs.
- Recommendation: All PPP and PC projects should be included in budget documentation and presented as one comprehensive investment portfolio as part of a Public Investment Plan.

### Budgeting for investment and protection of projects during implementation
- No total project outlays are appropriated by the legislature at project commencement.
- First budget call circular prioritizes completion of ongoing projects ahead of new ones to ensure allocations match contractual commitments and expenditure needs.
- No clear legal or regulatory requirement that information on total project costs is included in the budget; Article 34 of the Organic Law on State Finances and Property (OLSFP) provides unclear guidance.
- Transfers between capital and current spending generally not permitted without specific approval of the Minister for Finance and Economic Planning.
- Net virements from the development budget averaged 1.2 percent of capital spending over the past five years.
- Almost 90 percent of the Public Investment Plan comprises ongoing active projects.
- A three-year average from 2019-20: new projects accounted for 11 percent of total projects retained for budgeting.
- Evidence of project delays, cost overruns, and stalled projects amounted to 3 percent of total capital spending in 2020.
- Public Investment Plan spreadsheet: 471 projects total; 48 pipeline (USD1.2 billion) and 423 active ongoing projects (USD8.2 billion).
- Recommendation: Publish planned costs and multi-year planned disbursements stored in IFMIS; link IFMIS and procurement database to capture multi-year contracts.

### Maintenance funding and methodologies
- Methodologies for routine and capital maintenance and for major improvements exist, but coverage is mixed.
  - Standard methodologies only available at the local government level.
  - MININFRA responsible for road sector policies and maintenance of classified road network.
  - Rwanda Energy Group uses operation and maintenance manuals from equipment suppliers.
  - Routine maintenance manuals for public buildings are not yet in place.
- Budgets for maintenance identifiable but no clear distinction between routine and capital maintenance; unclear if funding is sufficient to retain asset values.
- Road Maintenance Fund revenues: petrol and diesel levy approximately 69.4 percent of revenues and a road toll charged on foreign heavy vehicles approximately 29.6 percent of revenues.
- LODA publishes minimum maintenance costs, but these are low by international standards.
- Table 7. Rwanda: LODA Minimum Maintenance Costs (Project category / Project Sub-category / Percentage of infrastructure investment / South African percentages (Comparative))
  - Transport Infrastructure / Roads / 2 / 5-10
  - Energy / Solar energy systems / 1 / (blank)
  - Water and sanitation / Water supply systems / 2 / 4-8
  - Water and sanitation / Storage tanks / 2 / 2-3
  - Water and sanitation / Water pump stations / 2 / (blank)
  - Administrative Infrastructure / District/sector offices / 2 / 4-6
  - School Infrastructure / School buildings and related infrastructure / 2 / 4-6
  - Public Health Infrastructure / Health Centers and related Infrastructure / 2 / 5-8
- Recommendation: Complete operation and maintenance manuals by all Government entities; develop systematic methodologies to determine routine- and capital maintenance needs, including costing.

### Project selection, pipeline, and central review
- MINECOFIN undertakes central review of major project appraisals from a project pipeline before inclusion in the budget; role of the PIC is formalized through the National Investment Policy (2017).
- National Investment Department acts as lead secretariat for the PIC and reviews project submissions using published broad selection criteria (2017 National Investment Policy and updated in the Budget Outlook Paper).
- Review process covers BAs, districts, PCs, and PPPs but excludes externally financed projects.
- Decisions recorded in project profile documents, now included in IFMIS project module.
- Government maintains a project pipeline (manually updated spreadsheet) that is not published; includes projects implementable by general government, PCs, or as PPPs.
- Central review shows rigor: 13 percent of new projects were rejected on average over 2018–2021; 40 percent of projects were rejected in the current budget round at the district level.
- The standalone spreadsheet includes detailed selection criteria scored 1-5 for dimensions: (i) technical feasibility; (ii) strategic fit; (iii) value for money; and (iii) appropriateness of request and funding model.
- Recommendation: Compile and publish the project pipeline as stated in the National Investment Policy; publish the review process, detailed selection criteria, and composition of the pipeline to strengthen transparency.

### Consolidated recommendations to improve investment allocation (preserve wording and numbering)
- Issue: Budget ceilings are issued late and do not serve as an adequate fiscal constraint.
  - Recommendation 2.1: MINECOFIN to issue multiyear budget ceilings at the BA and district level earlier in the budget preparation process. This would be provided as an annex to the Budget Outlook Paper. Cabinet approval should be solicited before issuance in the second budget call circular. This should draw upon the revised budget calendar proposed in Annex 4.
- Issue: Information on project costs, their revisions, and multi-year planned expenditures are not published at the time of appropriation.
  - Recommendation 2.2: MINECOFIN to publish project costs and multiyear projections in the budget annexes, or as a standalone budget document, by adapting the data that is submitted and stored in the IFMIS and district management information system. This should include cost revisions, drawing upon the illustration provided in Annex 5.
- Issue: There is a lack of methodologies to guide maintenance needs and cost projections.
  - Recommendation 2.4: MINECOFIN to develop guidelines and thresholds for maintenance that include specific methodologies and thresholds for routine and major maintenance.
- Issue: There is no published consolidated project pipeline of appraised projects nor criteria for selection of projects for inclusion in the budget.
  - Recommendation 2.5: MINECOFIN to automate and publish a pipeline of appraised major projects to compare within and across sectors transparently and competitively, and to publish project selection criteria.

### Procurement (summary)
- Procurement system judged Strength—High; Effectiveness—High; Reform Priority—Low.
- System is open and transparent; substantial efforts made to bring public procurement closer to international standards.
- Open, transparent, and competitive procurement required for major projects; RPPA mandated to monitor procuring agencies and bidders.
- Procurement database exists with detailed information; government publishes and uses reports from the database.
- Legal framework provides for an independent complaints review body; when an appeal is lodged the procurement process must be suspended.
- Most major projects are tendered openly and competitively; electronic database is comprehensive and effectively used.
- All rewards are published and included in the system; RPPA published reference prices and a list of blacklisted companies (including reasons and duration).
- Single-sourced tenders constitute around 30 percent of tenders (reflecting emergency responses and unlocking stalled projects).
- Reports from the electronic database include number and value of transactions by procurement method and types of goods procured; statistical reviews are conducted yearly.
- Monitoring captured in Annual RPPA Report; Independent Review Panel reviews procurement complaints.
- Table 8 (summary of tenders awarded in 2018/19 and appeals between 2010 and 2021) referenced in source.

*IMF Staff based on BFPs, original Annual State Finance Laws and budget execution reports (various years).*

### 51.      Notwithstanding the substantial progress that has been made on public procurement,

### 1rwaea2023002 - 51.      Notwithstanding the substantial progress that has been made on public procurement,

### Public procurement: progress and persistent issues
- RPPA 2018/19 Annual Report noted substantial issues across procuring entities, including:
  - Delays in the execution of contracts.
  - Forged documentation.
  - 303 personnel from procuring entities are not trained in the procurement procedures, and some are on the Procuring Committee.
- Training of procurement entities is recommended to be prioritized.

- Table 8 — Awarded Tenders in 2018/19 (Rwanda Public Procurement Authority)
  - By Value (RWF billions) and Percentage:
    - Goods: 160; 26
    - Works: 368; 61
    - Services: 74; 121
    - Total: 604; 100
  - By Number and Percentage:
    - Goods: 4,272; 76.25
    - Works: 725; 12.99
    - Services: 586; 10.50
    - Total: 5,583; 100.00
  - By Methods (Value and Percentage; Number and Percentage):
    - Single Sourcing: 184; 30; 316; 5.66
    - Open: 327; 54; 4,410; 78.99
    - Other: 93; 16; 1,173; 15.35
    - Total: 604; 100; 5,583; 100.00

- Table 9 — Summary of Appeals from 2010 to 2021 (Rwanda Public Procurement Authority)
  - Admissible and founded appeals: 36; 31.6
  - Admissible and unfounded appeals: 60; 52.5
  - Inadmissible appeals: 04; 3.5
  - Terminated procurement proceedings: 07; 6.0
  - No mandate: 04; 3.5
  - Withdrawn appeals: 02; 1.8
  - Appeal against decision: 01; 0.9
  - TOTAL: 114

- Box 3 — Identified Concerns Across Procurement Entities (RPPA Annual Activity Report for 2018/19)
  - Lack of clear technical specifications in bidding documents.
  - Delay in execution of some awarded contracts and penalties for delays were not applied.
  - Use of discriminatory criteria for some tenders resulting in only one or two bidders.
  - Many cases of forged documents; no due diligence conducted.
  - Some contracts with very high prices; some prices differ from prices provided by the successful bidder; modification of nature for the tender award in favor of another unplanned tender.
  - Minutes for reception of goods or works and validation of reports for studies are not available.
  - Awarded contract prices are between 29 percent and 1,532 percent higher than the planned cost.
  - Contractors appointed before supervision consultants are appointed, causing delays and overruns.

### Availability of funding for projects
- Institutional arrangements
  - Article 64 of the Financial Regulations requires quarterly cash-flow forecasts and commitment ceilings for the full fiscal year.
  - Cash flow reports are prepared; MINECOFIN submits monthly user expenditure reports to the Treasury.
  - Accountant General can determine lagging projects and has discretion to delay payments.
  - Expenditure reports prepared daily and monthly for internal use and cash monitoring.
  - Rwanda Aid Policy Manual of Procedures requires external financing to be fully integrated with the main government bank account structure.
- Observed funding outcomes
  - Cash for project outlays is usually provided promptly, though sometimes cash is rationed.
  - OAG identified projects put on hold or abandoned due to delayed payments.
  - Public entities had abandoned contracts worth RWF11.7 billion (0.1 percent of GDP) by the completion of the current year's audit:
    - Two cases worth RWF795 million identified during the year under audit.
    - Two cases worth RWF10.9 billion from previous audits that are still abandoned.
  - 16 projects were stalled due to budget constraints and lengthy procurement procedures.
  - Some procuring entities award tenders with assured financing resources, but resources are not released on time during implementation.
  - All external funding is channeled through the National Bank of Rwanda and is visible in Budget Annex II-2.
- Recommendations for funding availability
  - Put in place formal mechanisms to ensure timely release of project funds when payments come due, including clearly defining circumstances when the Accountant General can delay payments.
  - Accountant General should carefully analyze causes of project delays before withholding funding.
  - More detailed cash forecasting (for instance, monthly) could help better plan cash requirements for project funding.

### Portfolio management and oversight
- Institutional framework and weaknesses
  - 2021 National Monitoring, Evaluation, and Learning Guidelines require monitoring and oversight of projects and describe monitoring, frequency, and reporting through IFMIS.
  - Reporting template lacks critical information for thorough evaluation and analysis; no reference to analysis of information in reports.
  - PFM Manual allows reallocation of funds between projects up to 20 percent in a fiscal year; reallocation of externally funded project funds requires approval of the funding entity.
  - National Investment Policy requires ex-post evaluations between three and five years after completion; no requirement for independent expert ex-post reviews.
- Effectiveness issues and empirical findings
  - OAG reported stalled, idle, and abandoned projects with no clear corrective action from MINECOFIN, LODA, or MININFRA.
  - 2020 audits found 62 cases of delayed contracts worth RWF216 billion (1.8 percent of GDP) in 38 public entities and projects.
    - Fifty of the delayed projects (RWF21 billion) were carried over from previous audits.
  - No evidence of reallocation of funds or use of relevant procedures; reallocation is discouraged and seldom utilized.
  - Ex-post reviews are required but not conducted for all major projects; where conducted, information lacks credibility or is not applied in future projects.
- Recommendations to improve portfolio oversight
  - Improve the monitoring template to include information more comparative to contractual situations.
  - Strengthen and ensure application of ex-post evaluations and ensure lessons are learned for future projects.

### Management of project implementation
- Rules and mandates
  - National Monitoring, Evaluation, and Learning Guidelines require major projects to be monitored weekly, quarterly, and annually and assign a senior project manager.
  - Implementing agencies responsible for physical and financial monitoring.
  - Amendments up to 20 percent of project cost allowed; amendments above 20 percent must be tendered.
  - All cost adjustments must be analyzed, documented, and approved by MINECOFIN.
  - No legal requirement to review project rationale, cost, and outputs prior to approval of cost adjustments.
  - OAG mandated to conduct ex-post financial, compliance, performance, IT, and special audits.
- Observed implementation performance
  - Project monitoring by senior officials is undertaken but implementation plans are not prepared.
  - OAG found project management at district level not effective; execution of contracts progressing slowly and far from completion.
  - Analytical tools (e.g., S-Curve analysis) could have identified slow progress earlier.
- Table 10 — Details of Slow Progress at Project Sites (Report from the OAG, June 2020)
  - Construction of port at Rubavu and Rusizi Lake Kivu: Contract amount (RWF billion) 11; Percentage of work completed 9; Percentage of the execution period lapsed 61
  - Upgrading works for Nyagatare-Rukomo road: Contract amount (RWF billion) 45; Percentage of work completed 70; Percentage of the execution period lapsed 93
  - Rehabilitation and widening of Rbengera-Rambura Road: Contract amount (RWF billion) 13; Percentage of work completed 19; Percentage of the execution period lapsed 67
  - TOTAL: 70
- Box 4 — Shortfalls Identified by the OAG and RPPA in Project Management
  - Delayed construction works without valid contractual agreement.
  - Failure to charge penalties for delays to correct defects.
  - Lack of adequate supervision and internal control.
  - Project stalled because of budget constraints.
  - Projects are delayed up to 257 percent of original contract period.
  - Contract prices higher than the budgeted amount; actual cost varied between 29 percent to 1532 percent of planned cost.
  - Unrealistic project timeframes.
  - Low level of contractor’s understanding of the project.
  - Low standard of feasibility studies.
  - Project governance not good.
  - Final inspections in arrear of two year.
  - Some projects took five years to commence after completion of feasibility studies.
  - Lack of qualified staff.
  - Organizational setup is weak.
  - Some entities commence projects without a site available.
  - Projects commenced without adequate funding for expropriation.

- Suggested improvements for project management
  - Use analytical tools (e.g., S-Curve analysis) for early identification and remediation of slow progress.
  - Focus training of project managers and contract engineers on correct application of contracts and enforcement of contract regulations to accelerate claims process.
  - Ensure progress reports include physical and financial progress details and analysis of remaining risks to inform management decisions.

### Monitoring of public assets
- Institutional framework and current gaps
  - Asset inventory management process contained in PFM Manual; several laws and orders applicable.
  - International Public Sector Accounting Standards-based accounting system not yet functional; comprehensive asset register not yet compiled (in development with OAG).
  - Institutions with large numbers of assets may appoint consultants for asset verification.
  - PFM Manual requires asset values be recorded in financial statements; depreciation is defined and applied using straight-line methodology.
- Observed irregularities and effectiveness issues
  - Asset registers not fully updated according to PFM Manual; minimal reporting of asset values; depreciation not recognized in financial statements.
  - Chapter 14 of PFM Manual requires depreciation be included in the asset register and financial statements, but same manual states that depreciation or impairment and revaluations will not be recognized in financial statements — contradiction requiring correction.
  - Depreciation currently recorded in fixed asset registers of entities.
- Box 5 — Irregularities in Asset Management Identified by the OAG (Annual Report of the OAG, June 2020)
  - Value of disclosed assets in financial statements were not supported by asset registers.
  - Disclosed assets without reliable sources.
  - Failure to disclose assets acquired during the year under review.
  - Unexplained differences between amounts recorded in asset registers and those disclosed in financial statements.
  - Assets with no estimated value.
  - Absence of title deeds for disclosed assets.
  - Incomplete information in the disclosure note; lacks important information such as date of acquisition, depreciation, accumulated depreciation.
- Recommendations to improve asset monitoring
  - Address inconsistencies in the PFM Manual and require depreciation to be recognized in financial statements.
  - Present consolidated asset values in the financial statements and ensure entities present asset values in their financial statements.

### Recommendations to Improve Investment Implementation (selected)
- Issue: Funds are withheld from projects with low execution progress.
  - Recommendation 3.1: Prepare and publish clear guidelines on when payments may be withheld.
- Issue: Systematic procedures for ex-post review are not always used.
  - Recommendation 3.2: Strengthen the ex-post evaluation process and require evaluations for large projects.
- Issue: Asset management is limited and asset values are not published.
  - Recommendation 3.3: Include asset values in the financial statements and consolidated asset values in the Consolidated Financial Statements.

### Climate change and public infrastructure (overview and investment implications)
- Climate trends and vulnerability
  - Mean temperature has risen between 1.4 and 2.6 degrees in Rwanda's southwest and eastern regions over the past 50 years.
  - Increased intensity and variability of rainfall; drivers of droughts, floods, landslides, and storms affecting infrastructure.
- National commitments and costs
  - Rwanda developed Green Growth and Climate Resilience Strategy (2011).
  - Rwanda updated its Nationally Determined Contribution (NDC) in 2020 with an emission reduction objective of 38 percent from the business-as-usual (BAU) scenario.
  - To fully meet the NDC goals, financing costs are likely to be more than 10 percent of GDP annually through to 2030.
- NDC adaptation and investment requirements (Box 6 — Rwanda’s Nationally Determined Contribution (NDC) 2020 Update)
  - Emissions reduction objective: 38 percent from the BAU scenario in the year 2030, of which 16 percent is unconditional (‘domestic measures’) and 22 percent is conditional on international support and external funding.
  - The NDC defines 24 measures for climate change adaptation, with a combined cost of USD5.3 billion.
    - Largest measures:
      - Expansion of irrigation and improved water management: USD2.3 billion.
      - Improved transport infrastructure: USD0.6 billion.
      - Improvements to high-density buildings: USD0.4 billion.
      - Stormwater management: USD0.4 billion.
  - Total cost of the NDC is estimated to be USD11.0 billion, of which USD4.2 billion is anticipated to come from national resources; the rest is contingent on external funding.
  - Development and improvement of climate-resilient infrastructure and improvement of existing infrastructure makes up over 85 percent of the value of adaptation measures.
  - The NDC adaptation cost (USD5.3 billion) represents 55 percent of annual GDP by 2030.
  - 60 percent of this investment, including the largest projects, is contingent on co-financing.

### Climate Public Investment Management Assessment (C-PIMA)
- Purpose and scope
  - C-PIMA assesses five public investment management practices from a climate change perspective and extends the existing PIMA framework.
  - C-PIMA institutions closely resemble corresponding PIMA institutions; some C-PIMA dimensions combine separate PIMA institutions.
  - Institution 5 in C-PIMA (risk management) has no counterpart in PIMA.

*Source: IMF Technical Assistance Report*

### 68.      The C-PIMA covers the following specific issues:

### 68.      The C-PIMA covers the following specific issues:

### C1. Planning (Institutional Strength— High; Reform Priority— Low)
- National and sectoral strategies for public investment are consistent with climate change policies, including the 2020 NDC update.
- The NDC builds on the 2011 Green Growth and Climate Resilience Strategy and forms the basis for the 2019 National Environment and Climate Change Policy.
- Actions from the Green Growth and Climate Resilience Strategy and previous NDC versions are embedded in the 2017 – 2024 NST and relevant sector strategies.
- Rwanda has a well-designed and effective national planning system that applies to climate change considerations.
- The National Land Use and Development Master Plan (2020) and National Land Use Strategy (2011) provide detailed guidance on reflecting climate change in district land use plans.
- Urban Planning and Building Law (2012) and the Ministerial Order Determining Urban Planning and Building Regulations (2019) establish land use planning, permitting responsibilities, a minimum green building compliance system, and energy and water efficiency standards.
- District land use plans are developed locally, reviewed by a national technical committee, and approved by Parliament; construction permits are issued at district level with sub-district initial reviews.
- The Rwanda NDC and the first budget call circular provide guidance for agencies to provide and cost climate-aware public investment strategies, including costed interventions, key performance indicators, and alignment to implementing agencies.
- Yearly capacity building and guidelines are provided at the start of each planning cycle to mainstream climate change-related interventions into planning and budgeting.

- Box 7: Mainstreaming stages in planning and budgeting
  - Stage 1: Integrate climate interventions and targets into sector plans via consultations between Ministry of Environment and lead sectors/budget agencies.
  - Stage 2: Climate change monitoring statement in the first budget call circular, including a matrix of indicators/interventions and costed budget allocations.
  - Stage 3: Budget hearings to assess mainstreaming into the medium-term budget; BA and district plans and budgets reviewed.
  - Stage 4: Annual reporting using a traffic light approach; budget agencies and districts ranked according to progress.

### C2. Coordination (Institutional Strength— Medium; Reform Priority— Medium)
- Climate-related investment decisions are coordinated through annual dialogue on NDC commitments with central ministries and agencies prior to budget submissions and during budget hearings; year-end reporting exists.
- No standardized mechanism ensures consistent weighting of climate objectives across sectors (e.g., no standardized shadow prices on GHG emissions, no special budget incentives tied to NDC targets).
- MINALOC and LODA’s financial management information system for district governments includes a project module with standard criteria; climate change is not a standard criterion and is considered outside the system.
- PCs participate in annual NDC dialogues with parent ministries, but no stringent mechanism ensures fully consistent climate-aligned project decisions across central and subnational levels.
- Medium-priority reforms suggested:
  - Adopt robust appraisal methodologies (standard shadow prices for GHG, resilience assessments).
  - Include climate considerations in MINALOC information system and central IFMIS project module to enhance transparency and consistency.

### C3. Appraisal and Selection (Institutional Strength— Low; Reform Priority— High)
- Major infrastructure project approval requires an Environmental Impact Assessment (EIA) prior to appraisal; MINECOFIN rejects major projects without an approved EIA.
- Guidelines do not clearly require climate change-specific analysis in EIAs or project appraisals (no mandatory hazard analysis, risk mapping, loss and damage estimation, BAU GHG emissions, net GHG impacts, marginal abatement cost curves, or shadow prices of carbon).
- Appraisal documents are not published; EIAs are not readily available.
- PPP framework: 93 percent of existing PPP projects are in the energy sector; remainder in water and sanitation, culture, tourism, and logistics.
  - PPP Law requires a feasibility study with an EIA for major projects but lacks explicit guidance on allocation of climate change-related risks between government and PPP partners.
  - Standard force majeure clauses do not specify cost-sharing for predictable climate-related events or allocation of transition risk costs.
- Project selection checklist exists but lacks specific climate change-related selection criteria (consistency with mitigation objectives, design to reduce adaptation exposure).
- With over USD5.3 billion in climate change-related infrastructure investment planned in the NDC 2020 update, strengthening appraisal and selection is critical.
- Recommended institutional strengthening:
  - Incorporate methodologies to assess project sensitivity to climate change in feasibility studies.
  - Provide guidance on sharing climate change-related risks in PPP contracts within PPP guidelines.
  - Introduce specific selection criteria addressing mitigation and adaptation and guidance on assessment/application.

### C4. Budgeting and Portfolio Management (Institutional Strength— Medium; Reform Priority— Medium)
- Budget documents do not explicitly identify planned climate change-related investment expenditures; mainstreaming produces action plans but does not translate easily to the budget structure.
- Manual efforts identify climate-related projects through the mainstreaming process.
- The Chart of Accounts structure could enable climate change budget tagging at program, sub-program, output, activity, and input levels, but integration with ongoing performance information reforms is required.
- Ex-post reviews and audits do not assess climate change mitigation and adaptation; Ministry of Environment does not conduct ex-post reviews beyond decommissioning inspections in EIA guidelines.
- Government asset management policies do not refer to climate change considerations; some PCs incorporate climate impacts in maintenance (Rwanda Energy Group and Rwanda Transport Development Agency examples).
- Need for specific budgeting, review, and maintenance practices:
  - For mitigation projects, ex-post reviews should compare actual GHG emissions against projected and BAU scenarios.
  - For adaptation projects, reviews should assess hazard and risk impacts on completed infrastructure.
  - Maintenance manuals/schedules should guide requirements where climate change increases damage (e.g., hydrological events, higher temperatures).
- Annex 8 references green budgeting elements identified by the European Commission, IMF, and OECD.

### C5. Risk Management (Institutional Strength—Medium; Reform Priority— Medium)
- Rwanda’s disaster risk management strategy addresses natural hazards with mitigation measures.
- Natural disasters account for around 0.3 percent of GDP in annual losses.
- Principal natural disaster risks: floods and earthquakes.
- Ministry of Emergency Management produces a National Risk Atlas (2015) and a climate change vulnerability assessment (2018); the Atlas assesses exposure, vulnerability, and economic costs for five hazard categories and includes contingency plans.
- The climate change monitoring statement includes disaster preparedness indicators that budget agencies and districts must adhere to.
- OBLSF allows an emergency budget reserve contingency not exceeding 3 percent of the current budget; contingency appropriated under MINECOFIN with Ministerial authorization for use.
  - Specific emergency reserve contingency is not identifiable in budget documents or execution reports; no separate quarterly report on contingency utilization.
  - No other financing mechanism exists for climate change-related damages, though plans to initiate an emergency disaster fund exist.
- MINECOFIN publishes a Fiscal Risk Statement with qualitative analysis of climate-related risks, including a chapter on natural disasters with hazard types, affected sectors, and estimation of budgetary commitments and mitigation measures.
  - Suggested enhancement: expand to quantitative analysis using methods in the National Risk Atlas and IMF approaches for long-term fiscal sustainability and climate risk assessment.

### Recommendations to Improve the Sensitivity of Public Investment Management to Climate Change
- Issue: The appraisal and selection of projects do not contain assessments of project mitigation and adaptation aspects.
  - Recommendation 4.1: Produce and require the use of methodologies to assess the GHG impact and climate change-resilience of projects in feasibility studies.
  - Recommendation 4.2: MINECOFIN to prepare specific selection criteria addressing the mitigation and adaptation aspects of projects and produce guidance on how these criteria should be assessed and applied.
- Issue: There is no guidance on how climate change-related risks (such as predictable climate change-related natural disasters and transition risks) should be shared between government and PPP partners.
  - Recommendation 4.3: Rwanda Development Board to update the 2018 PPP guidelines to provide specific guidance on the sharing of climate change-related risks in PPP contracts.
- Issue: Climate change-related investments cannot be identified in the budget.
  - Recommendation 4.4: MINECOFIN to explore options to tag climate change-related investments in the budget and incorporate other elements of green PFM in the PFM framework. This should build on the existing streamlining reforms and the recent analytical work on green PFM undertaken by the European Commission, Organization for Economic Cooperation and Development, and IMF.
- Issue: The analysis of fiscal risks related to climate change is qualitative and does not provide a measure of the scale of the possible risks related to climate change in Rwanda.
  - Recommendation 4.5: MINECOFIN to expand the Fiscal Risk Statement to include quantitative analysis of the fiscal risks related to climate change. This should start with an assessment of long-term fiscal sustainability under different climate change scenarios and discrete fiscal risks directly affected by climate change.

*Source: IMF Technical Assistance Report (excerpt).*

### 86.       A comprehensive legal, policy, and regulatory framework covers all key aspects of public

### 1rwaea2023002 - 86.       A comprehensive legal, policy, and regulatory framework covers all key aspects of public

### Legal, policy, and regulatory framework for Public Investment Management (PIM)
- Comprehensive framework covers all key aspects of public investment management; Rwanda’s legal system combines civil law and common law practices.
- Many important issues are covered in legislation; some public investment institutions are primarily governed by regulations, policies, and guidelines.
- The revised OLSFP was passed in 2022, but public investment management considerations did not directly drive the changes.
- Public Investment Management (including climate-relevant public investments) is well covered by current legal and regulatory framework, though some recommendations in the report will have implications for laws and regulations and will require minor amendments over time.

- Key legislation, regulations, and guidelines linked to PIMA and Climate PIMA institutions (selected entries from Table 11):
  - A. Planning
    - Fiscal principles or rules: Organic Law on State Finances and Property (2022)
    - National and sectoral plans: National Strategy for Transformation (2017); Manual of Public Financial Management (PFM) Policies and Procedures (2019)
    - Coordination between entities: Planning and budgeting guidelines for decentralized development projects (2013)
    - Project appraisal: National Investment Policy (2017); Feasibility study guidelines (2018)
    - Alternative infrastructure financing: National Investment Policy (2017); Law Governing PPPs in Rwanda (2016); Public Private Partnership Guidelines (2018); Monitoring and evaluation planning guidelines and tools for state owned corporations
  - B. Allocation
    - Multi-year budgeting: Organic Law on State finances and property (2013); Ministerial order on financial regulations (2016); Guidelines for planning and budgeting; Manual of Public Financial Management (PFM) Policies and Procedures (2019)
    - Maintenance funding: Road maintenance Fund Law (2013); Organic Law on State finances and property (2013)
    - Project selection: National Investment Policy (2017); Feasibility study guidelines (2018)
  - C. Implementation
    - Procurement: Public procurement law (2018)
    - Availability of funding: Ministerial order on financial regulations (2016); Manual of Public Financial Management (PFM) Policies and Procedures (2019)
    - Portfolio management and oversight; Project implementation: The National Monitoring, Evaluation and Learning Guidelines (2021); Public procurement law (2018); OAG law (2013)
    - Management of public assets: Organic Law on State finances and property (2013)
  - Climate PIMA highlights
    - Climate-aware planning: Environment Law (2018); Ministerial Order Preventing Activities that Pollute the Atmosphere (2010); Environment and climate change policy (2018); Law governing urban planning and building (2012)
    - Budgeting and portfolio management; Risk management: Organic Law on State finances and property (2013); The National Disaster Management Policy, 2012

### IT systems and data management
- IT systems and data management are well rooted in Rwanda’s public investment management cycle with strong in-house capacity to adapt and customize.
- Districts have a financial management information system that can store project information (feasibility studies, reviews, appraisals, selection decisions).
- The E-Procurement system is operational; plans exist to link multi-year contractual commitments with IFMIS.
- Disbursements of externally financed projects can be effectively tracked with a bridge to the government’s accounting framework.
- IFMIS is being expanded to include a project module; the homegrown system evolved from an early Oracle platform that was inflexible and expensive to maintain.

- Planned project module: aims and functions (from Table 12)
  - Planning/Project concept: require completion of criteria including project costs, performance indicators, project milestones, activity plans.
  - Project review: two-stage review in IFMIS — 1) National Investment Department scores projects using ranking criteria and requires document uploads consistent with the National Investment Policy; 2) PIC decision where documentation and minutes are uploaded and status changed to “approved,” making project eligible for selection.
  - Project selection for budgeting: approved projects pushed into the budget module where MTEF constraint is introduced; selection prioritizes completion of ongoing projects with known and verified future commitments; scoring and ranking undertaken.
  - Project Execution: maintain up-to-date implementation plan, annual work plan, and commitment plan on quarterly and annual basis.
  - Monitoring and Reporting: quarterly reporting on performance against milestones with explanations for deviations, changes to design and scope, and corrective measures.

- Coverage and integration
  - Planned project module will cover districts, PPPs, and most PCs as the sole repository of information for projects.
  - Current district information captured via separate management information system; PPP information collected in Excel; both consolidated in the PIC with plans to integrate through IFMIS.
  - Need to ensure procedural consistency and links with other IT systems: evidence of mismatches (e.g., unit cost guidelines exist but are not incorporated in IFMIS; contracts requested to be uploaded could be linked to procurement database for greater security and accuracy).

- Implementation notes
  - Locally hired programmers now manage IFMIS upgrades (supported by World Bank and other development partners).
  - Findings on the planned module are based on a demonstration of the system; no project document or user requirements were provided.

### Institutional capacity and staffing
- National Investment Department staffing and role
  - The National Investment Department has nine staff members: a department head, four project design specialists, and four project design officers.
  - Staffing levels are consistent with Kenya and Ethiopia but fewer than Uganda and Malawi (who have between 15 and 20 staff).
  - Department plays a vital coordination role with budget agencies (BAs) and districts; central expertise supports BAs and districts.
  - Staff capacity appears high, but more time could be dedicated to analytical functions to support PIM; current manual data collection reduces time available for analysis as IFMIS project module automation is still ongoing.

- Other capacity constraints
  - Planned organizational restructuring in MINECOFIN provides opportunity to define functional roles and responsibilities; current organogram has poorly delineated roles (e.g., project monitoring and evaluation is under a separate directorate).
  - Accountant General’s Department: a team of just three people oversees PCs despite PCs being responsible for much of the nation’s critical infrastructure.
  - As new systems (e.g., IFMIS project module) are developed, officials will need training; procurement entities and procurement committee members require training on procurement procedures.
  - Climate PIM capacity needs: mainstreaming mitigation and adaptation across PIM and PFM will require training; climate change-related EIAs require more climate change expertise in Rwanda Development Board where six officers are responsible for reviewing over 400 EIAs each year.

- Suggested organizational functions (from Table 13)
  - Financial: assessment of affordability and financial viability of projects; coordination roles: Budget, Debt and PPP Departments.
  - Economic: economic and social assessment; coordination role: Macro unit.
  - Technical: appraisal of technical issues (designs, land, environment, social); coordination: Line ministries.
  - Monitoring and Evaluation: monitoring of project delivery and evaluation; coordination: Budget Department, Line ministries.
  - Analysts: research, analysis, modelling; coordination: All.

### Action Plan — priority issues and recommended actions (selected entries from Annex 1)
- A. Planning — Sustainable Levels of Public Investment
  - Issue: No systematic collection or publication of information about fiscal risks from contingent liabilities related to PCs, PPPs, and districts.
    - Actions:
      - Publish the annual Fiscal Risk Review of Government Investment.
      - Improve reporting of contingent liabilities from PCs, PPPs, and districts and provide a consolidated overview in a published Fiscal Risk Statement.
      - Update accounting regulations for PCs, PPPs, and districts to specify that all contingent liabilities must be reported to MINECOFIN.
      - Prepare section for Fiscal Risk Statement on contingent liabilities for whole of public sector and publish.
    - Capacity building needs: Capacity building on Fiscal Risk Statement.
    - Responsibility: MINECOFIN Treasury dept.; MINECOFIN Macroeconomic dept.
    - Timing: 2022; 2023.
  - Issue: 2018 Project Appraisal guidelines are not fully operationalized.
    - Actions:
      - Operationalize 2018 project appraisal guidelines including a robust and well-documented project validation process by MINECOFIN.
      - Ensure Government IFMIS is developed to support public investment process.
      - Make major project appraisal documents publicly available while redacting commercial secrets or sensitive information.
    - Capacity building needs: Training on good practices for project validation.
    - Responsibility: MINECOFIN Investment department.
    - Timing: 2022 - 2023.

- B. Ensuring Public Investment is Allocated to the Right Sectors and Projects
  - Issue: Budget ceilings issued late and do not serve as adequate fiscal constraint.
    - Action: MINECOFIN to issue multiyear budget ceilings at BA and district level earlier as annex to Budget Outlook Paper and solicit Cabinet approval prior to issuance in second budget call circular.
    - Capacity building: Working sessions to update budget documentation; Training of trainers.
    - Responsibility: MINECOFIN (Budget, Planning, Macro).
    - Timing: 2022.
  - Issue: Project costs, revisions, and multi-year planned expenditures not published at time of appropriation.
    - Action: Publish project costs and multi-year projections in budget annexes or standalone document by adapting data submitted and stored in IFMIS and district management information system.
    - Capacity building: Design of formats for cost estimates.
    - Responsibility: MINECOFIN (National Investment Department).
    - Timing: 2023.
  - Issue: No published consolidated project pipeline of appraised projects nor criteria for selection into budget.
    - Action: Automate and publish pipeline of appraised major projects and publish detailed selection criteria.
    - Capacity building: Specification of IFMIS project module and design of document.
    - Responsibility: MINECOFIN (National Investment Department, IFMIS Department).
    - Timing: 2023.
  - Issue: Maintenance methodologies required.
    - Action: Develop methodologies for routine- and major maintenance, inclusive of indicative cost calculation principles.
    - Capacity building: Working sessions.
    - Responsibility: Line ministries.
    - Timing: 2022.

- C. Delivering Productive and Durable Public Assets
  - Issue: Funds are withheld from projects with low execution progress.
    - Action: Prepare and publish clear guidelines on when payments may be withheld.
    - Capacity building: Working sessions.
    - Responsibility: Accountant General’s Department.
    - Timing: 2022.
  - Issue: Ex-post review procedures exist but are not always used.
    - Action: Strengthen ex-post evaluation process and require evaluations for large projects.
    - Capacity building: Continuous professional development training.
    - Responsibility: Line Ministries.
    - Timing: 2023.
  - Issue: Asset management is limited and asset values are not published.
    - Action: Include asset values in financial statements and consolidated asset values in Consolidated Financial Statements.
    - Capacity building: Updated PFM manual.
    - Responsibility: MINECOFIN.
    - Timing: 2022.

- Climate PIMA actions
  - Issue C3: Appraisal and selection do not assess mitigation and adaptation aspects.
    - Actions:
      - Produce and require methodologies to assess GHG impact and climate change-resilience of projects in feasibility studies.
      - Prepare specific selection criteria addressing mitigation and adaptation and guidance on assessment and application.
    - Capacity building: Update EIA Guidelines; Updated and transparent selection criteria.
    - Responsibility: National Investment Dept, MINALOC, Environment; MINECOFIN.
    - Timing: 2023.
  - Issue C3: PPP framework lacks guidance on climate change-related risk allocation.
    - Action: Update PPP Guidelines to include climate risk allocation guidance.
    - Capacity building: Update the PPP Guidelines.
    - Responsibility: Rwanda Development Board.
    - Timing: 2023.
  - Issue C4: Climate change-related investment not readily identified in the budget.
    - Action: Explore tagging and incorporating elements of green PFM, building on existing reforms and recent work by European Commission, OECD, and IMF.
    - Capacity building: Chart of Accounts design options from other countries.
    - Responsibility: MINECOFIN (Budget, Accountant General and IFMIS) Ministry of Environment.
    - Timing: 2022.
  - Issue C5: Climate change-related fiscal risk analysis is largely qualitative.
    - Action: Expand Fiscal Risk Statement to include quantitative analysis by assessing long-term fiscal sustainability under different climate change scenarios and discrete fiscal risks methodology.
    - Capacity building: Formats and analytical techniques for quantification.
    - Responsibility: MINECOFIN (Macro), Ministry of Environment.
    - Timing: 2023.

*Source: IMF Technical Assistance Report (excerpts provided).*

### 3.   Coordination between Entities: Is there effective coordination of the investment plans of central and other governm

### 3.   Coordination between Entities: Is there effective coordination of the investment plans of central and other government entities?

### Coordination between central government and SNGs
- 3.a. Is capital spending by SNGs coordinated with the central government?
  - "Capital spending plans of SNGs are not submitted to, nor discussed with central government."
  - "Major SNG capital spending plans are published alongside central government investments, but there are no formal discussions, between the central government and SNGs on investment priorities."
  - "Major SNG capital spending plans are published alongside central government investments, and there are formal discussions between central government and SNGs on investment priorities."

- 3.b. Does the central government have a transparent, rule-based system for making capital transfers to SNGs, and for providing timely information on such transfers?
  - "The central government does not have a transparent rule-based system for making capital transfers to SNGs."
  - "The central government uses a transparent rule-based system for making capital transfers to SNGs, but SNGs are notified about expected transfers less than six months before the start of each fiscal year."
  - "The central government uses a transparent rule-based system for making capital transfers to SNGs, and expected transfers are made known to SNGs at least six months before the start of each fiscal year."

- 3.c. Are contingent liabilities arising from capital projects of SNGs, PCs, and PPPs reported to the central government?
  - "Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are not reported to the central government."
  - "Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are reported to the central government, but are generally not presented in the central government’s budget documents."
  - "Contingent liabilities arising from major projects of SNGs, PCs, and PPPs are reported to the central government, and are presented in full in the central government’s budget documents."

*Indicator Scoring: 1 = To no or a lesser extent 2 = To some extent 3 = To a greater extent*

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### 4.  Project Appraisal: Are project proposals subject to systematic project appraisal?

### Rigor and transparency of project appraisal
- 4.a. Are major capital projects subject to rigorous technical, economic, and financial analysis?
  - "Major capital projects are not systematically subject to rigorous, technical, economic, and financial analysis."
  - "Major projects are systematically subject to rigorous technical, economic, and financial analysis."
  - "Major projects are systematically subject to rigorous technical, economic, and financial analysis, and selected results of this analysis are published or undergo independent external review."

- 4.b. Is there a standard methodology and central support for the appraisal of projects?
  - "There is no standard methodology or central support for project appraisal."
  - "There is either a standard methodology or central support for project appraisal."
  - "There is both a standard methodology and central support for project appraisal."

- 4.c. Are risks taken into account in conducting project appraisals?
  - "Risks are not systematically assessed as part of the project appraisal."
  - "A risk assessment covering a range of potential risks is included in the project appraisal."
  - "A risk assessment covering a range of potential risks is included in the project appraisal, and plans are prepared to mitigate these risks."

*Indicator Scoring: 1 = To no or a lesser extent 2 = To some extent 3 = To a greater extent*

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### 5.   Alternative Infrastructure Financing: Is there a favorable climate for the private sector, PPPs, and PCs to finance infrastructure?

### Market structure, PPP policy, and oversight of PCs
- 5.a. Does the regulatory framework support competition in contestable markets for economic infrastructure (e.g., power, water, telecoms, and transport)?
  - "Provision of economic infrastructure is restricted to domestic monopolies, or there are few established economic regulators."
  - "There is competition in some economic infrastructure markets, and a few economic regulators have been established."
  - "There is competition in major economic infrastructure markets, and economic regulators are independent and well established."

- 5.b. Has the government published a strategy/policy for PPPs, and a legal/regulatory framework which guides the preparation, selection, and management of PPP projects?
  - "There is no published strategy/policy framework for PPPs, and the legal/regulatory framework is weak."
  - "A PPP strategy/policy has been published, but the legal/regulatory framework is weak."
  - "A PPP strategy/policy has been published, and there is a strong legal/regulatory framework that guides the preparation, selection, and management of PPP projects."

- 5.c. Does the government oversee the investment plans of public corporations (PCs) and monitor their financial performance?
  - "The government does not systematically review the investment plans of PCs."
  - "The government reviews the investment plans of PCs, but does not publish a consolidated report on these plans or the financial performance of PCs."
  - "The government reviews and publishes a consolidated report on the investment plans and financial performance of PCs."

*Indicator Scoring: 1 = To no or a lesser extent 2 = To some extent 3 = To a greater extent*

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### B. Ensuring Public Investment is Allocated to the Right Sectors and Projects

### 6. Multi-Year Budgeting: medium-term projections and ceilings
- 6.a. Is capital spending by ministry or sector forecasted over a multiyear horizon?
  - "No projections of capital spending are published beyond the budget year."
  - "Projections of total capital spending are published over a three to five-year horizon."
  - "Projections of capital spending disaggregated by ministry or sector are published over a three to five-year horizon."
- 6.b. Are there multiyear ceilings on capital expenditure by ministry, sector, or program?
  - "There are no multiyear ceilings on capital expenditure by ministry, sector, or program."
  - "There are indicative multiyear ceilings on capital expenditure by ministry, sector, or program."
  - "There are binding multiyear ceilings on capital expenditure by ministry, sector, or program."
- 6.c. Are projections of the total construction cost of major capital projects published?
  - "Projections of the total construction cost of major capital projects are not published."
  - "Projections of the total construction cost of major capital projects are published."
  - "Projections of the total construction cost of major capital projects are published, together with the annual breakdown of these cost over a three-five-year horizon."

### 7. Budget Comprehensiveness and Unity: coverage of capital and recurrent spending
- 7.a. Is capital spending mostly undertaken through the budget?
  - "Significant capital spending is undertaken by extra-budgetary entities with no legislative authorization or disclosure in the budget documentation."
  - "Significant capital spending is undertaken by extra-budgetary entities, but with legislative authorization and disclosure in the budget documentation."
  - "Little or no capital spending is undertaken by extra-budgetary entities."
- 7.b. Are all capital projects, regardless of financing source, shown in the budget documentation?
  - "Capital projects are not comprehensively presented in the budget documentation, including PPPs, externally financed, and PCs’ projects."
  - "Most capital projects are included in the budget documentation, but either PPPs, externally financed, or PCs’ projects are not shown."
  - "All capital projects, regardless of financing sources, are included in the budget documentation."
- 7.c. Are capital and recurrent budgets prepared and presented together in the budget?
  - "Capital and recurrent budgets are prepared by separate ministries, and/or presented in separate budget documents."
  - "Capital and recurrent budgets are prepared by a single ministry and presented together in the budget documents, but without using a program or functional classification."
  - "Capital and recurrent budgets are prepared by a single ministry and presented together in the budget documents, using a program or functional classification."

### 8. Budgeting for Investment: protection during implementation
- 8.a. Are total project outlays appropriated by the legislature at the time of a project’s commencement?
  - "Outlays are appropriated on an annual basis, but information on total project costs is not included in the budget documentation."
  - "Outlays are appropriated on an annual basis, and information on total project costs is included in the budget documentation."
  - "Outlays are appropriated on an annual basis and information on total project costs, and multiyear commitments is included in the budget documentation."
- 8.b. Are in-year transfers of appropriations (virement) from capital to current spending prevented?
  - "There are no limitations on virement from capital to current spending."
  - "The finance ministry may approve virement from capital to current spending."
  - "Virement from capital to current spending requires the approval of the legislature."
- 8.c. Is the completion of ongoing projects given priority over starting new projects?
  - "There is no mechanism in place to protect funding of ongoing projects."
  - "There is a mechanism to protect funding for ongoing projects in the annual budget."
  - "There is a mechanism to protect funding for ongoing projects in the annual budget and over the medium term."

### 9. Maintenance Funding: routine maintenance and major improvements
- 9.a. Is there a standard methodology for estimating routine maintenance needs and budget funding?
  - "There is no standard methodology for determining the needs for routine maintenance."
  - "There is a standard methodology for determining the needs for routine maintenance and its cost."
  - "There is a standard methodology for determining the needs for routine maintenance and its cost, and the appropriate amounts are generally allocated in the budget."
- 9.b. Is there a standard methodology for determining major improvements, and are they included in national and sectoral investment plans?
  - "There is no standard methodology for determining major improvements, and they are not included in national or sectoral plans."
  - "There is a standard methodology for determining major improvements, but they are not included in national or sectoral plans."
  - "There is a standard methodology for determining major improvements, and they are included in national or sectoral plans."
- 9.c. Can expenditures relating to routine maintenance and major improvements be identified in the budget?
  - "Routine maintenance and major improvements are not systematically identified in the budget."
  - "Routine maintenance and major improvements are systematically identified in the budget."
  - "Routine maintenance and major improvements are systematically identified in the budget, and are reported."

### 10. Project Selection: institutions and procedures
- 10.a. Does the government undertake a central review of major project appraisals before decisions are taken to include projects in the budget?
  - "Major projects (including donor- or PPP-funded) are not reviewed by a central ministry prior to inclusion in the budget."
  - "Major projects (including donor- or PPP-funded) are reviewed by a central ministry prior to inclusion in the budget."
  - "All major projects (including donor- or PPP-funded) are scrutinized by a central ministry, with input from an independent agency or experts prior to inclusion in the budget."
- 10.b. Does the government publish and adhere to standard criteria, and stipulate a required process for project selection?
  - "There are no published criteria or a required process for project selection."
  - "There are published criteria for project selection, but projects can be selected without going through the required process."
  - "There are published criteria for project selection, and generally projects are selected through the required process."
- 10.c. Does the government maintain a pipeline of appraised investment projects for inclusion in the annual budget?
  - "The government does not maintain a pipeline of appraised investment projects."
  - "The government maintains a pipeline of appraised investment projects but other projects may be selected for financing through the annual budget."
  - "The government maintains a comprehensive pipeline of appraised investment projects, which is used for selecting projects for inclusion in the annual budget, and over the medium term."

*Indicator Scoring: 1 = To no or a lesser extent 2 = To some extent 3 = To a greater extent*

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### C. Delivering Productive and Durable Public Assets

### 11. Procurement: openness, monitoring, and complaints
- 11.a. Is the procurement process for major capital projects open and transparent?
  - "Few major projects are tendered in a competitive process, and the public has limited access to procurement information."
  - "Many major projects are tendered in a competitive process, but the public has only limited access to procurement information."
  - "Most major projects are tendered in a competitive process, and the public has access to complete, reliable and timely procurement information."
- 11.b. Is there a system in place to ensure that procurement is monitored adequately?
  - "There is no procurement database, or the information is incomplete or not timely for most phases of the procurement process."
  - "There is a procurement database with reasonably complete information, but no standard analytical reports are produced from the database."
  - "There is a procurement database with reasonably complete information, and standard analytical reports are produced to support a formal monitoring system."
- 11.c. Are procurement complaints review processes conducted in a fair and timely manner?
  - "Procurement complaints are not reviewed by an independent body."
  - "Procurement complaints are reviewed by an independent body, but the recommendations of this body are not produced on a timely basis, nor published, nor rigorously enforced."
  - "Procurement complaints are reviewed by an independent body whose recommendations are timely, published, and rigorously enforced."

### 12. Availability of Funding: timely financing for capital spending
- 12.a. Are ministries/agencies able to plan and commit expenditure on capital projects in advance on the basis of reliable cash-flow forecasts?
  - "Cash-flow forecasts are not prepared or updated regularly, and ministries/agencies are not provided with commitment ceilings in a timely manner."
  - "Cash-flow forecasts are prepared or updated quarterly, and ministries/agencies are provided with commitment ceilings at least a quarter in advance."
  - "Cash-flow forecasts are prepared or updated monthly, and ministries/agencies are provided with commitment ceilings for the full fiscal year."
- 12.b. Is cash for project outlays released in a timely manner?
  - "The financing of project outlays is frequently subject to cash rationing."
  - "Cash for project outlays is sometimes released with delays."
  - "Cash for project outlays is normally released in a timely manner, based on the appropriation."
- 12.c. Is external (donor) funding of capital projects fully integrated into the main government bank account structure?
  - "External financing is largely held in commercial bank accounts outside the central bank."
  - "External financing is held at the central bank, but is not part of the main government bank account structure."
  - "External financing is fully integrated into the main government bank account structure."

### 13. Portfolio Management and Oversight: monitoring and reallocations
- 13.a. Are major capital projects subject to monitoring during project implementation?
  - "Most major capital projects are not monitored during project implementation."
  - "For most major projects, annual project costs, as well as physical progress, are monitored during project implementation."
  - "For all major projects, total project costs, as well as physical progress, are centrally monitored during project implementation."
- 13.b. Can funds be re-allocated between investment projects during implementation?
  - "Funds cannot be re-allocated between projects during implementation."
  - "Funds can be reallocated between projects during implementation, but not using systematic monitoring and transparent procedures."
  - "Funds can be re-allocated between projects during implementation, using systematic monitoring and transparent procedures."
- 13.c. Does the government adjust project implementation policies and procedures by systematically conducting ex post reviews of projects that have completed their construction phase?
  - "Ex post reviews of major projects are neither systematically required, nor frequently conducted."
  - "Ex post reviews of major projects, focusing on project costs, deliverables and outputs, are sometimes conducted."
  - "Ex post reviews of major projects focusing on project costs, deliverables, and outputs are conducted regularly by an independent entity or experts, and are used to adjust project implementation policies and procedures."

### 14. Management of Project Implementation: project management and audits
- 14.a. Do ministries/agencies have effective project management arrangements in place?
  - "Ministries/agencies do not systematically identify senior responsible officers for major investment projects, and implementation plans are not prepared prior to budget approval."
  - "Ministries/agencies systematically identify senior responsible officers for major investment projects, but implementation plans are not prepared prior to budget approval."
  - "Ministries/agencies systematically identify senior responsible officers for major investment projects, and implementation plans are prepared prior to budget approval."
- 14.b. Has the government issued rules, procedures and guidelines for project adjustments that are applied systematically across all major projects?
  - "There are no standardized rules and procedures for project adjustments."
  - "For major projects, there are standardized rules and procedures for project adjustments, but do not include, if required, a fundamental review and reappraisal of a project’s rationale, costs, and expected outputs."
  - "For all projects, there are standardized rules and procedures for project adjustments and, if required, include a fundamental review of the project’s rationale, costs, and expected outputs."
- 14.c. Are ex post audits of capital projects routinely undertaken?
  - "Major capital projects are usually not subject to ex post external audits."
  - "Some major capital projects are subject to ex post external audit, information on which is published by the external auditor."
  - "Most major capital projects are subject to ex post external audit information on which is regularly published and scrutinized by the legislature."

### 15. Monitoring of Public Assets: asset registers and accounting
- 15.a. Are asset registers updated by surveys of the stocks, values, and conditions of public assets regularly?
  - "Asset registers are neither comprehensive nor updated regularly."
  - "Asset registers are either comprehensive or updated regularly at reasonable intervals."
  - "Asset registers are comprehensive and updated regularly at reasonable intervals."
- 15.b. Are nonfinancial asset values recorded in the government financial accounts?
  - "Government financial accounts do not include the value of non- financial assets."
  - "Government financial accounts include the value of some non- financial assets, which are revalued irregularly."
  - "Government financial accounts include the value of most nonfinancial assets, which are revalued regularly."
- 15.c. Is the depreciation of fixed assets captured in the government’s operating statements?
  - "The depreciation of fixed assets is not recorded in operating statements."
  - "The depreciation of fixed assets is recorded in operating statements, based on statistical estimates."
  - "The depreciation of fixed assets is recorded in operating expenditures, based on asset-specific assumptions."

*Indicator Scoring: 1 = To no or a lesser extent 2 = To some extent 3 = To a greater extent*

---

### Cross-cutting issues
- A. IT support. "Is there a comprehensive computerized information system for public investment projects to support decision making and monitoring?"
- B. Legal Framework. "Is there a legal and regulatory framework that supports institutional arrangements, mandates, coverage, procedures, standards and accountability for effective PIM?"
- C. Staff capacity. "Does staff capacity (number of staff and/or their knowledge, skills, and experience) and clarity of roles and responsibilities support effective institutions?"

*IMF Technical Assistance Report | 64–71*

*Source: 1rwaea2023002 - 3.   Coordination between Entities: Is there effective coordination of the investment plans of central and other government entities?*

### ANNEX 3. DETAILED PIMA SCORES

### ANNEX 3. DETAILED PIMA SCORES

### Detailed indicator scores (Institutional Design / Effectiveness)
- 1.a. Institutional Design: 2 / Effectiveness: 2
- 1.b. Institutional Design: 2 / Effectiveness: 2
- 1.c. Institutional Design: 2 / Effectiveness: 3
- 2.a. Institutional Design: 3 / Effectiveness: 3
- 2.b. Institutional Design: 2 / Effectiveness: 2
- 2.c. Institutional Design: 3 / Effectiveness: 3
- 3.a. Institutional Design: 3 / Effectiveness: 3
- 3.b. Institutional Design: 1 / Effectiveness: 2
- 3.c. Institutional Design: 2 / Effectiveness: 2
- 4.a. Institutional Design: 2 / Effectiveness: 2
- 4.b. Institutional Design: 3 / Effectiveness: 2
- 4.c. Institutional Design: 3 / Effectiveness: 1
- 5.a. Institutional Design: 3 / Effectiveness: 2
- 5.b. Institutional Design: 3 / Effectiveness: 2
- 5.c. Institutional Design: 2 / Effectiveness: 2
- 6.a. Institutional Design: 2 / Effectiveness: 2
- 6.b. Institutional Design: 2 / Effectiveness: 1
- 6.c. Institutional Design: 1 / Effectiveness: 1
- 7.a. Institutional Design: 2 / Effectiveness: 3
- 7.b. Institutional Design: 2 / Effectiveness: 2
- 7.c. Institutional Design: 3 / Effectiveness: 3
- 8.a. Institutional Design: 1 / Effectiveness: 1
- 8.b. Institutional Design: 2 / Effectiveness: 3
- 8.c. Institutional Design: 3 / Effectiveness: 2
- 9.a. Institutional Design: 1 / Effectiveness: 2
- 9.b. Institutional Design: 2 / Effectiveness: 2
- 9.c. Institutional Design: 2 / Effectiveness: 1
- 10.a. Institutional Design: 2 / Effectiveness: 2
- 10.b. Institutional Design: 2 / Effectiveness: 2
- 10.c. Institutional Design: 2 / Effectiveness: 2
- 11.a. Institutional Design: 3 / Effectiveness: 2
- 11.b. Institutional Design: 3 / Effectiveness: 3
- 11.c. Institutional Design: 3 / Effectiveness: 3
- 12.a. Institutional Design: 2 / Effectiveness: 1
- 12.b. Institutional Design: 1 / Effectiveness: 2
- 12.c. Institutional Design: 3 / Effectiveness: 3
- 13.a. Institutional Design: 3 / Effectiveness: 1
- 13.b. Institutional Design: 2 / Effectiveness: 1
- 13.c. Institutional Design: 2 / Effectiveness: 1
- 14.a. Institutional Design: 2 / Effectiveness: 1
- 14.b. Institutional Design: 2 / Effectiveness: 1
- 14.c. Institutional Design: 3 / Effectiveness: 3
- 15.a. Institutional Design: 3 / Effectiveness: 2
- 15.b. Institutional Design: 2 / Effectiveness: 1
- 15.c. Institutional Design: 2 / Effectiveness: 1

*Annex A. Planning; B. Allocation; C. Implementation (section headings retained from source).*

---

### ANNEX 4. PROPOSED REVISED BUDGET CALENDAR

### Stage 1: Calculate the Baseline (steps and timing)
- Step 1 — Timing: 1 June/August
  - Conduct training for BAs on the new budget and planning procedures.
  - BA actions: Participate in trainings; Districts: Participate in trainings.
- Step 2 — Timing: Begin September
  - MINECOFIN issues the 1st budget call circular to instruct BAs on the budget baseline exercise and planning requirements for the upcoming MTEF period.
  - BA actions: Receive the 1st budget call circular; Districts: Receive the 1st budget call circular.
- Step 3 — (i) the budget baseline exercise based on the costing methodology. (ii) the planning requirements for the upcoming MTEF period.
- Step 4 — Timing: September – mid October
  - Technical support for BAs to answer questions during the baseline calculation.
  - Guides on Backward Looking Joint Sector Reviews (ToRs; technical and quality support for reports, participating in meetings).
  - BA actions: Calculate the budget baseline and submit to MINECOFIN by end of August; Conduct Backward Looking Joint Sector Review activities (prepare and submit draft reports to MINECOFIN, holding meetings).
  - Districts: Calculate the budget baseline and submit to MINECOFIN by end of August.
- Step 5 — Timing: Second half of October
  - MINECOFIN assesses submitted baseline calculations, requires amendments if necessary; consolidates BA baselines into total budget baseline; compares to fiscal objectives (EAC convergence criteria) and assesses fiscal space.
  - MINALOC/LODA to harmonize priorities and targets for the upcoming 3 FYs.
  - BA/District actions: Interact with MINECOFIN in case of clarification and participate in consultative meetings.
- Step 6 — Timing: Second half of October
  - Macro department: Conducts a macroeconomic forecast (update of the projection from April) and calculates total expenditure ceilings for 3 upcoming FYs.

### Stage 2: Set early expenditure ceilings
- Step 7 — Timing: First half of November
  - MINECOFIN submits expenditure ceilings (total and BA specific) to Cabinet for approval.
- End of November
  - MINECOFIN issues a Budget Outlook Paper including macroeconomic forecast, total and BA specific expenditure ceilings.
- Beginning of December
  - MINECOFIN issues a second budget call circular which, based on Cabinet approval of expenditure ceilings, instructs on drafting the budget estimates.

### Stage 3: BA Prioritization and drafting
- December
  - BAs: Participate in ministerial planning consultations; Conduct ministerial planning consultations and input from PIC to inform prioritization of policies within set expenditure ceilings; Participate in Local Government Project Advisory Committee.
  - Districts: Participate in Local Government Project Advisory Committee; Participate in Local Government Project Advisory Committee.
- December and January
  - MINECOFIN: Guides and supports BAs to prioritize within set expenditure ceilings.
  - BAs: Prioritize expenditure to comply with set expenditure ceilings; Develop costed proposals for corrective action if existing programs and projects cannot be fully covered; Submit to MINECOFIN by end of November detailed budget estimates proposals and proposals for costed corrective action.
  - Districts: Submit to the joint team of MINALOC, LODA and MINECOFIN by the end of November draft district plans.
- First half of February
  - MINECOFIN assesses draft budget estimate submissions from BAs to ensure compliance with set expenditure ceilings and other provisions of the second budget call circular.
  - BA/District: Quality assurance of draft plans and investments; Interact with MINECOFIN in case of clarification and amendment requirements.
- Second half of February
  - If required, MINECOFIN coordinates with BAs adjustments of draft budget estimates and proposals for costed corrective action.
  - BA/District: Interact with MINECOFIN or joint team of MINALOC, LODA and MINECOFIN to conduct the adjustments.
- February: National Leadership Retreat
- March
  - MINECOFIN issues guidelines and roadmap for PBB and Imihigo and shares with BAs.
  - Organizes consultative meetings among central and local governments in collaboration with MINALOC/LODA to harmonize performance based budgeting and Imihigo priorities and targets.
  - BAs finalize their PBB contributions and draft Imihigos and share with MINECOFIN. Districts finalize their PBB contributions.
- Second half of March
  - Macro department: Conducts a macroeconomic forecast and calculates its impact on total expenditure ceilings for 3 upcoming FYs.
- First half of April
  - MINECOFIN assesses PBB and Imihigo submissions (for districts in cooperation with MINALOC/LODA) and if required discusses with BAs and requests amendments.
  - MINECOFIN conducts ministerial budget consultations based on macroeconomic forecast and its impact on total expenditure ceilings for the three upcoming FYs.
- March/April
  - MINECOFIN prepares the BFP (with final total and BA specific expenditure ceilings; reference to EAC convergence criteria; the Fiscal Risk Statement as an Annex).
- Mid-April
  - Request any amendments of draft PBB contributions and Imihigos if required as result of ministerial budget consultations.
- April
  - MINECOFIN submits draft budget documents including BFP to Cabinet and Parliament.
  - Issues ToRs for Forward Looking Joint Sector Reviews (FLJSR) and participates in FLJSR meetings. Provides technical support and quality assurance for the FLJSR draft reports.
  - BAs/Districts: Prepare and submit to MINECOFIN draft reports for FLJSR; Hold FLJSR meetings; Submit to MINECOFIN signed FLJSR reports.
- May/June
  - MINECOFIN responds to issues emanating from Parliamentary review.
- June
  - Final budget approval – Finance Law.

Notes preserved from source:
- If possible, the ceilings for those FYs which were already included in the previous MTEF should not be changed to support planning reliability.
- This requires an amendment of the Ministerial Order relating to financial regulations as currently, this legal document requires the Budget Outlook Paper to be issued by the end of September.
- If possible and consistent with the macroeconomic forecast conducted in March, the ceilings should be the same as by end of September to support planning reliability.
- Central government BAs and districts can start the preparation of their performance based budgeting and Imihigo contributions earlier, at the latest in February based on the results of the expenditure prioritization.

---

### ANNEX 5. SUGGESTED FORMAT TO INCLUDE TOTAL PROJECT COSTS AND MULTIYEAR PROJECTIONS

### Table structure (column headings preserved)
- Columns numbered 1 to 11 with headings:
  1. Ministry Budget Agency
  2. Project Details
  3. Total Project Cost
  4. Revised Total Cost
  5. Spent to Date
  6. Remaining Balance
  7. Agency Budget Allocation
  8. Year 1 allocation
  9. Year 2 allocation
  10. Remaining Balance
  11. (Remaining balance beyond the MTEF period required to complete the project)
- Notes (verbatim from source):
  - 1 As currently listed in existing Budget Annex II-3
  - 2 As currently listed in existing Budget Annex II-3
  - 3 As currently listed in existing Budget Annex II-3
  - 4 Including all contractual commitments and planned expenditures
  - 5 Any planned revisions that have been discussed, reviewed, and verified
  - 6 Spending to date by all funding sources for the project
  - 7 Balance left for the duration of the project until completion
  - 8 Budget allocation for the appropriated budget year inclusive of all funding sources
  - 9 Budget allocation for the first outer year
  - 10 Budget allocation for the second outer year
  - 11 Remaining balance beyond the MTEF period required to complete the project

---

### ANNEX 6. TRANSPARENCY IN PROJECT SELECTION DECISIONS

### Required recording fields for Project Selection Committee decisions
- Date and Time of Meeting:
- Place of Meeting:
- Committee Chair:
- Names of Scoring Committee Members:
- Others Present and Purpose of Attendance:
- Concerning Budget Year:
- Fiscal Space Available for New Projects:
- Number of New Projects Presented:
- Number of Qualifying New Projects Assessed:
- Number of New Projects Selected within Fiscal Space:
- Dissentions, Concerns Raised and Other Remarks:
- Signature of Chair:

### Project scoresheet structure and scoring elements
- Example column headings preserved:
  - Name of Project
  - Proposing Entity
  - Capital Value (MWK)
  - Scorer 1 … Scorer 11
  - Average
  - Weighting
  - Weighted Score
- Scoring criteria (as listed):
  1. Government Sector Priority
  2. Line Ministry Sector Priority
  3. Project Efficiency
  4. Number of Beneficiaries
  5. Distributional Effects
- Scoring notes:
  - Scores (1-3 for each criterion) Maximum possible score per project = 15
  - Scorer Comments (in case of disagreement)
  - Totals, Scorer Name, Place of Scoring, Date of Scoring, Assessment Start, Assessment End
  - Rank, Project #, Total Average score, Total Weighted Score, Capital Value, Cumulative Capital Value, Aggregate Scoresheet

---

### ANNEX 7. THE CALIFORNIAN S-CURVE

### Purpose and interpretation
- The S-Curve is described as an early detection tool to determine the course of a project.
- Explanation bullets preserved:
  - The percentage progress versus the percentage time lapsed on any given date, is indicate in the S-Curve.
  - The green line indicates the upper limit of expenditure, and the red line indicates the lower limit of expenditure of the project.
  - The purple line indicates the actual expenditure versus time of the project, at any timeframe.
  - A project that follows the blue line, within the envelop is a well-managed and resourced project.
- Risk guidance:
  - Once a project follows the direction of the purple line, below the green and red envelop, it is an indication that the project run a severe risk of cost and time overrun. Urgent action steps are then required to bring the purple line back into the envelop.
  - Once the purple line continues to stay below the envelop, a management decision is required to request a method statement from the Contractor on how he/she envisages to rectify the under-performance.

### Chart axis and sample values (preserved)
- Expenditure (VAT Incl) axis labels:
  - R0.00, R10,000,000.00, R20,000,000.00, R30,000,000.00, R40,000,000.00, R50,000,000.00, R60,000,000.00, R70,000,000.00, R80,000,000.00, R90,000,000.00
- Time axis sample dates:
  - Tuesday, April 25, 2017
  - Thursday, May 25, 2017
  - Sunday, June 25, 2017
  - Tuesday, July 25, 2017
  - Friday, August 25, 2017
  - Monday, September 25, 2017
  - Wednesday, October 25, 2017
  - Saturday, November 25, 2017
  - Monday, December 25, 2017
  - Thursday, January 25, 2018
  - Sunday, February 25, 2018
  - Sunday, March 25, 2018
  - Wednesday, April 25, 2018
  - Friday, May 25, 2018
  - Monday, June 25, 2018
  - Wednesday, July 25, 2018

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### ANNEX 8. CLIMATE CHANGE AND GREEN BUDGETING

### Key characteristics and good practices (verbatim emphasis)
- Budgets are a crucial instrument for climate action and the green transition, and governments are increasingly deploying green budgeting to align their policies with climate commitments.
- Green budgeting is more efficient when:
  - It is inserted in a strategic framework laying out a country’s climate change-related national plan.
  - It uses budgetary policy tools to contribute to evidence-based decision-making.
  - It relies on an institutional design with clearly defined responsibilities and a timeline for actions.
  - It uses transparent reporting and independent oversight to ensure openness and accountability.
- For reporting, reporting methods on green budgeting vary across countries, from tables in budget plans to comprehensive reports.
- A good practice in various countries is the publication of a ‘Green Budget Statement’. They can be a single document or incorporated in existing budget documents, depending on what is appropriate in individual country settings.

### Country examples and practices (preserved)
- Over the last decade several countries have published Green Budget Statements parallel to the main budget using a variety of specially designed expenditure tracking methodologies to identify climate change-related expenditures but without reporting their mitigation or adaptation impacts.
- Other countries have reported information on the impact of the annual budget on GHG emissions:
  - Scotland’s Climate Change Act 2009 requires the government to submit to Parliament an assessment of the impact of proposed expenditures on GHG emissions.
  - In Norway the Climate Change Act (2018) requires government to state in the annual budget the expected impact of the budget on GHG emissions and how Norway can achieve the climate targets set out in the Act.
  - In Sweden, the Climate Change Act 2018 requires the government to submit an annual climate report to Parliament in the Budget Bill.
- France:
  - France has incrementally deepened the extent to which environmental issues are presented in annual budget documents.
  - In 2019 a methodology was piloted ex post on that year’s enacted State Budget and in 2021 a ‘Report on the Environmental Impact of the State’ was presented with the budget.
  - The report rates these elements on a scale of -1 (unfavorable) to +3 (very favorable) with respect to each of the six environmental objectives in the EU Taxonomy of Sustainable Environmental Outcomes, resulting in three categories: green, mixed and unfavorable expenses.

*Italic source attribution: IMF Technical Assistance Report — ANNEX 3 through ANNEX 8 (selected annexes and tables).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1rwaea2023002.pdf_