Page 2 - Belgian Development Cooperation Newsletter_draft

and supply for local products meet, so to generate
income for citizens and improve quality of life for local
citizens. RDSP is supporting the Government of Rwanda
to stimulate local economic development.
Supporting local economic development (LED) is one of There are many ways of supporting LED going from
the main objectives of the Rwanda Decentralisation improving basic infrastructure like roads and water supply
Support Programme (RDSP). Investing only in national to give better access to markets, to marketing local
economic development is not sufficient to bring the assets, to offer bookkeeping training to small businesses
required development which will improve the quality of life or to implement a grant fund to stimulate local private
of all Rwandans, even though it is important. It is also sector development. Hence, in November 2016, the
known that the trickle-down effect of national economic Government of Rwanda, with the support of RDSP,
development has its limitations and cannot reach all. launched the “Local Competitiveness Facility” (LCF) grant
Focusing on the local economy is hence needed to fund with an initial value of 2.4 million €.
develop an economy on the local level, where demand

LCF was designed after an assessment was conducted to better
understand local realities. The assessment indicated that businesses in
Rwanda are very small, have a low turnover, are mostly informal, have
low institutional capacity and most importantly, have difficulty in
accessing finance and markets. Agriculture remains the most important
sector however there is a large need to focus on off-farm jobs. Hence,
the fund will support innovating business partnerships in value chain
development with a pro-poor objective in the following sectors: agro-
processing, tourism, handcraft, ICT and distribution and services.

Funding for business partnerships is available under two funding
windows with the first window specifically targeting smaller companies
in which also informal companies or cooperatives can be part of.

Funding possibilities under the second window are larger, but all
companies or cooperatives part of the partnership need to be part of the
formal economy and so should be officially registered.

LCF information meeting © RDSP

Project applicants need to also provide
part of the project funding they require.

As LCF is a fund for supporting LED, the
local government is closely involved in
the management of LCF. The fund is
implemented under the joint responsibility
of the Local Administrative Entities
Development Agency , under the Ministry
of Local Government (MINALOC) and the
respective local authorities.