Supporting Public-Private Partnerships for Industry Development in Rwanda

The Client

The United National Industrial Development Organization(UNIDO) in Vienna commissioned me to provide technical advice, program coordination and quality assurance to the National Industrial Research and Development Agency(NIRDA) in Rwanda. The program was funded by the Korean International Cooperation Agency(KOICA) and I liaised closely with KOICA Country Office in Rwanda.

The program, known as ‘Capacity Building for Industrial Research and Development in Rwanda’, began in 2016 and concluded in late 2019.

The Challenge

The program sought to improve the competitiveness of new and existing Rwandan industries to increase their export potential and their potential to substitute imports through increased local production. Support was provided to Rwanda enterprises in selected value chains to access technology to improve their competitiveness in national and international markets.

The Government of Rwanda established NIRDA in 2013 to support the diversification of the Rwandan economy. The new NIRDA replaced the Institute of Scientific and Technological Research and was more focused on industrial development concerns.

Following a review of its strategy and structure, the KOICA-UNIDO program supported the preparation of a new NIRDA strategy. The strategy repositioned NIRDA in the national industrial landscape and establishes a more demand-driven approach to industrial development.

The Process

The program involved a complete redesign of the agency’s strategy, organisational structure and staffing arrangements, programmes and services, and monitoring system.

Key elements included:

  • Strategy and action plan: A strategy and action plan for the operation of NIRDA to achieve its goals.
  • Organisational structure: An upgraded organisational structure for the management and operation of NIRDA.
  • Systems development for NIRDA: Operational systems, procedures and processes to maximize the efficient management and operation of NIRDA.
  • Capacity development: Capacity development programme for NIRDA’s management and staff to undertake their defined roles within the organisational structure.
  • Investments: Investments into NIRDA facilities and pilot projects.

The NIRDA strategy centres on the selection of priority value chains for technological upgrading. It describes how NIRDA works with selected enterprises in these value chains to help them improve their competitiveness through the acquisition and commercialisation of technologies.

In support of this approach, we identified a number of priority value chains and conducted technology auditsand value chain assessmentsto identify the kinds of technologies currently used by firms in these value chains and to assess their needs and capacities for new technologies that would improve productivity and competitiveness.

A new process for working with firms was piloted through the program. Known as ‘open calls’, NIRDA used the results of value chain assessments and technology audits to design a funding window for the selection of firms. In the pilot phase dealing with two value chains (garmentsand banana wine), 136 project concept notes were received. Of these 35 were invited to submit full proposals. By the end of the process, 12 projects were selected for support: six in the garment sector and six from the banana wine sector.

The Outcome

This program has contributed to a range of broader reform and development processes underway in Rwanda. The government has closely monitored NIRDA’s work and is using these experiences to inform its policy and program initiatives.

Government has indicated it will apply the open call process in all its industrial development programs. While far from perfect, this program created the space for government to engage more directly with private businesses in strategic value chains. It highlighted the organisational and cultural challenges that government face when trying to nurture a more competitive and innovative industrial sector.

Lessons Learned

It is now clear that the focus on equipment distorted the design of the project and the support provided to firms. While many firms applied because they wanted new equipment, in the end, the most valuable support provided was not equipment, but technical advice, assistance and training.

Another major lesson of this pilot phase was the importance of good business diagnostics. While many applicants were reluctant to share their commercial information with a government agency, it was important for NIRDA to invest time into building a relationship with firms so they could properly understand the challenges the business faced and their major constraints.

Good diagnosis informs good project design. When an accurate picture of the businesses is drawn and agreement is reached around its key challenges, it becomes possible to design interventions that have meaning, both to the business owner/manager and to NIRDA as a public agency.

Good firm diagnostics also helps to establish a monitoring and evaluation system that spans firm-level activities and outputs, with agency-wide performance indicators. It provides a critical baseline, while helping project designers to connect firm-level support to agency goals and economy-wide impacts.

For more information on this project see this article.

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