At the centre of this shift is the SDG Costing and Budgeting exercise, a government-led initiative supported by the United Nations Development Programme (UNDP), designed to align national spending with measurable development outcomes.
The exercise, anchored in Rwanda's National Strategy for Transformation 2 (NST2), is changing how public and private resources are mobilised, allocated and monitored, moving beyond traditional budgeting toward results-driven financing.
Technical support for smarter financing
UNDP has provided technical leadership and advisory support throughout the SDG costing process, working closely with the Ministry of Finance and Economic Planning (MINECOFIN). The agency supported the development of costing methodologies, scenario modelling and the integration of SDG targets into national budget systems.
In a recent SDG Costing report, Fatmata Sesay, UNDP Rwanda Resident Representative, underscored the importance of strategic financing in achieving sustainable development outcomes.
"Right-financing is not about doing more with less. It is about doing better with what we have, structuring public funds to de-risk investment, aligning incentives to development outcomes and building the fiscal architecture to manage complexity over time," she said.
UNDP also supported the application of global tools such as the IMF SDG Financing Tool, helping Rwanda adapt international models to local realities.
Aligning SDGs with Rwanda's national priorities
Rather than treating SDGs as a parallel agenda, the costing exercise embeds them directly into NST2 flagship programmes. Each SDG target is mapped to NST2 pillars and priority areas, ensuring they are delivered through national systems.
By integrating SDG costing into Rwanda's Medium-Term Expenditure Framework (MTEF), MINECOFIN can now clearly see which priorities are fully funded, partially funded or unfunded. This allows policymakers to sequence interventions strategically and focus limited resources on areas with the highest development impact, including poverty reduction, job creation and climate resilience.
According to the report, Rwanda requires Rwf 63.6 trillion to implement NST2 between 2024 and 2029. Of this amount, 43 percent is expected to come from private sector investments, particularly domestic financial institutions, while the remaining 57 percent will be mobilised from public sources such as taxes, grants and concessional loans.
The largest allocations are directed to education, health, electricity, water and sanitation, and roads. The sectors are prioritised because of their central role in human capital development and economic transformation. By 2029, spending in these areas is projected to reach nearly 20 percent of GDP, up from around 10 percent in 2024.
Where Rwanda stands on the SDGs
The report presents a mixed picture of Rwanda's SDG performance. About 28 percent of targets are already achieved or on track, while 53 percent are showing limited progress. Another 19 percent of targets are regressing, highlighting areas where progress has stalled or reversed.
Rwanda has recorded notable gains in clean water access, clean energy, gender equality and climate action. However, challenges persist in job creation, institutional capacity and inclusive economic growth, signalling the need for more targeted financing and policy acceleration in these areas.
These gaps in progress are closely linked to the country's SDG financing shortfall, now estimated at 21.3 percent of GDP, up from 15.7 percent before the COVID-19 pandemic. Closing this gap will require stronger domestic revenue mobilisation, better public spending efficiency and deeper private sector involvement.
The report makes it clear that traditional public financing alone will not be enough. Instead, Rwanda is increasingly turning to blended finance, public-private partnerships and impact-linked financing to mobilise additional capital while maintaining fiscal sustainability.
To support long-term planning, the report outlines three possible development pathways. Under the Resilience First scenario, SDGs would be achieved by 2054 if current trends continue. The Smart Sequencing scenario projects achievement by 2044 through moderate acceleration and efficiency gains. The most ambitious pathway, All-in Leap, targets SDG achievement by 2034, requiring major fiscal reforms, strong private sector mobilisation and international cooperation.
These scenarios allow policymakers to weigh ambition against fiscal risk and implementation capacity.
A major innovation introduced through the exercise is Budgeting for SDGs (B4SDG). Unlike traditional budgeting approaches that focus on institutional spending lines, B4SDG tracks how each allocation contributes to concrete development outcomes.
This enables cross-sector coordination and makes trade-offs visible, strengthening transparency and accountability. For example, investments in renewable energy simultaneously advance climate action, job creation and economic growth.
Crowding in the private sector
Private sector participation is also becoming central to Rwanda's SDG financing strategy. Through the Integrated National Financing Framework (INFF), SDG priorities are transformed into bankable projects supported by guarantees, concessional finance and results-based payments.
These instruments reduce investment risk and attract private capital into sectors such as renewable energy, agriculture, housing, MSMEs and health, helping scale development impact beyond what public funding alone can achieve.
Managing fiscal risks and climate resilience
The report also flags potential fiscal risks, including rising debt service costs and contingent liabilities from public-private partnerships. To manage these risks, Rwanda is embedding SDG financing within a prudent macro-fiscal framework guided by debt sustainability thresholds and phased implementation.
Climate risk is fully integrated into investment planning. Projects are screened for resilience and aligned with green bonds and climate funds, ensuring long-term sustainability.
As Rwanda prepares for global platforms such as the Summit of the Future, the United Nations system has reaffirmed its commitment to supporting the country's development agenda.
"As we move towards the Summit of the Future and beyond, the United Nations system in Rwanda remains fully committed to supporting the government in mobilising the right type of capital to accelerate progress towards the SDGs," said Ozonnia Ojielo, United Nations Resident Coordinator in Rwanda.
With UNDP's technical support and strong government ownership, Rwanda's SDG costing exercise is emerging as a regional model for results-based development financing, demonstrating how data, partnerships and innovative finance can turn ambition into measurable impact.
Wycliffe Nyamasege
