Rwanda established targets for GrossDomestic Product (GDP) growth and poverty reduction, to beachieved by the year 2020; these were to (i) raise real percapita income from $230 to $900; and (ii) reduce the povertyincidence by half. To reach these targets, the Governmentprojected in its 2002 Poverty Reduction Strategy Paper(PRSP) that GDP growth will to be in the range of 6 to 7percent over the medium term. The PRSP focused on sixpriority areas: (i) rural development and agriculturaltransformation; (ii) human development; (iii) economicinfrastructure; (iv) good governance; (v) private sectordevelopment; and (vi) institutional capacity development.While increased spending in the social sectors led tosubstantial improvements in outcomes there has been onlylimited spending for economic services, including investmentto improve productivity in agriculture and manufacturing.Improvements in poverty have been marginal, due to a numberof factors: (i) lack of investment in infrastructure duringthe recovery and stabilization phase, to complement thereforms undertaken to improve the business environment; (ii)lack of investments in capacity, institutions, andland/water management in the agricultural sector; (iii)continued low use of inputs; (iv) instability within theregion; (v) delays in Rwanda's accession to the EastAfrica Community (EAC); and (vi) a slower than expected paceof reform in key sectors such as the tea industry. The PRSPanticipated that growth in the agricultural sector willproceed with progressive commercialization, with ensuingdemand for agricultural and non-agricultural goods andservices in rural areas, resulting in increasing non-farm employment.
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