Prioritising agricultural research and development for economic growth in Rwanda

Policy brief 28 Jun 2021 Firms

Authors

The Rwandan government recognizes agriculture's importance towards achieving its medium-term development objectives. Successive strategic plans since PSTA-1 (2007) have included substantial increases in total allocations to agriculture.
Officials face difficult decisions allocating limited resources across sectors and activities. In a high- performance context, activities with long-term benefits such as agricultural R&D can face static or declining allocations in favor of short-term support measures.
To help guide budget allocation, we used Computable General Equilibrium (CGE) modelling, using data for Rwanda to analyze the impact of increased research and development’ (R&D) investment on economic indicators of high priority to decision makers.
The findings show that raising investment in Agricultural R&D from 0.44 percent of GDP currently to 1 percent could increase agricultural productivity by around 50 percent. This could result in a decline in poverty—measured at the $1.90 level— by 12 percentage points. Allocating R&D resources according to value of output would give almost as large a gain as the poverty reduction benefit, which is harder to evaluate.