1. Background. 2. Tourism Sector. 3. Advisory Services Program

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1 Terms of Reference Support to RDB for the Implementation of Tourism Regulatory Agency: World Bank Group Investment Climate Program for Rwanda November Background The World Bank Group s (WBG) Rwanda Investment Climate Reform Program Phase 3 (RICRP3) aims to support the Government of Rwanda's (GoR) economic development agenda by; (1) Addressing key macro level constraints that continue to exist in the business environment, and (2) Helping diversify the economy outside of Kigali to contribute to GoR's rural development program. Building on previous phases of WBG support to Rwanda, this program will focus on addressing key constraints to increasing private investment in the GoR s priority sectors of agricultural inputs, horticulture and tourism. 2. Tourism Sector Defined as a priority in the revised national Export Strategy, the government has ambitious targets for the tourism sector. As the country s leading foreign exchange earner, accounting for 21% of total exports between 2001 and 2010 and for 4.2% of GDP in 2012, tourism is estimated to directly support 34,000 jobs with a further 74,000 jobs supported indirectly. Both arrivals and private investment have been increasing in recent years. Earning USD million in 2012 the GoR aims to increase revenues earned to USD 800million by With the expected increase in tourism establishments, the government will create a tourism regulatory agency within RDB. This agency requires some institutional support in setting-up, as well as the creation of a number of regulations that will enable the new agency to implement their full mandate as foreseen in the Tourism Law (2014). 3. Advisory Services Program Although Rwanda is experiencing healthy growth in both arrivals and tourism investment, a significant acceleration in growth is required to meet the GoR s revenue target in Through the Advisory Services of the Trade and Competitiveness Global Practice, the WBG will support RDB to address some key constraints and boost revenue for the sector. Support has been divided into two parallel workstreams; Workstream 1 Regulatory reform and institutional support: Support the establishment and development of a tourism regulatory body in accordance with international best practice. According to the Tourism Law (passed December 2014) the regulatory body will be responsible for licensing and regulation of tourism enterprises, grading and inspection of tourism entities, approval of training courses, maintaining a database of tourism enterprises, concession contracts in protected areas, and inspections. The program will work to develop the institutional and

2 operational framework for the agency, as well as the tourism regulatory framework to enable effective implementation of the agency's mandate. Workstream 2 Investment generation: Generating investment around new products and destinations will require identifying realistic and market based investment opportunities, implementing recommendations to remove barriers to growth, and securing at least 5 new private sector investments. In line with the Tourism Master Plan, this approach will support the development of new tourism hubs and spokes as well as additional revenue generating opportunities at existing hubs. The tourism sector has strong job creating potential, especially for women and youth including in rural areas. The program has been designed to take place over a period from December 2014 December This ToR is relevant to Workstream 1 Regulatory Reform and Institutional Support. 4. Tourism Regulatory Function of RDB The 2014 Tourism Law mandates RDB to expand their regulatory role of the tourism sector. In an effort to stimulate growth and improve standards, the Tourism Law foresees the expansion of certain regulatory functions (licensing), as well as the creation of new ones (the levy). Four Ministerial Orders (Regulations) have been drafted and/or approved. The Orders are: Licensing Grading Tourism Concessions Levy RDB has requested support from the WBG in operationalizing this framework. The agency would like technical assistance in setting up competitive operational capacity, including processes and systems through which to administer the new Orders. A consultancy firm has previously been working closely with RDB in this regard and has achieved the full development of all the processes associated with operationalizing the framework, provided advice on staffing and organizational set-up, and facilitated the automation of a licensing pilot. In continuation of this work, the WBG requires consulting services to support RDB in the completion of all activities associated with operationalizing the framework, evaluating its efficiency, and amending it accordingly. The WBG sets out three guiding principles for effective tourism regulatory frameworks 1 : 1. Tourism regimes should, through harmonization with other sectors legislation, contribute to macro level government or public interest objectives, such as inclusive economic growth, poverty reduction or environment protection. 2. Tourism regimes should support government sector policies through regulating entry into markets and conduct within them. 3. Tourism regimes should have a role in fostering competitiveness through minimizing compliance costs and being flexible while still supporting Principles 1 and 2. 1 Licensing principles and key issues in tourism: S Mann 2013

3 The WBG also uses a good regulatory design framework developed by OECD to evaluate and frame the discussion of different practices: regulatory frameworks should a) have a clearly stated purpose, b) be the minimum to achieve objectives, c) not be unduly prescriptive, d) be accessible, transparent and accountable, e) be integrated and consistent with other laws and regulations, f) be communicated effectively, g) be mindful of the compliance burden imposed, and, h) be enforceable. 4. Scope of Work WBG requires the service of a qualified and experienced Consulting Firm to undertake the following activities. All activities should be conducted collaboratively with RDB, under supervision of the WBG. Part 1 Cross-cutting support to RDB (applies to all MOs unless stated otherwise) Executive Leadership Kickoff support WBG to host a kickoff with RDB Executive Leadership to include the Chief Tourism Officer and Chief Executive Officer. Consultant will develop content, facilitate the kickoff, and capture outputs. Outputs to include key decisions to be made by the Executive Leaders to facilitate the implementation of this project, including budget and resources needed for staffing the Tourism assessment organization; MOU s needed for codifying the working relationship with external stakeholders, such as RRA for TDL collections; agreement on milestones for the project including timing of passing the Ministerial Orders and dedicating the team members needed for successful implementation. o One output of this process should be a detailed implementation plan for RDB covering the next 6 months, with review at the end of 6 months. Design and implement a communications and sensitization strategy for the private sector regarding the operationalization of the four MOs. This should be implemented in conjunction with RDB and other relevant institutional stakeholders. It can be phased and does not need to address all four MOs simultaneously, but should provide the private sector (and general public) with all the answers and information they need in order to comply with the rules, and help effective implementation. All forms of media as well as other channels may be considered. o This should include the creation of a public interface with the private sector, including sets of FAQs, information on all regulatory requirements (including for inspections, grading and licensing), and more specialized issues that require greater explanation and technical guidance. Design and implement an effective organizational structure and staffing plan for the regulatory agency under RDB. Support the RDB in aligning their structure with mandated functions, staffing their organization with the appropriate skills/people needed to effectively operationalize the agency and regulate the sector. Activities include proposing adaptations for the organizational structure, developing a hiring plan with key milestones for hiring, onboarding and training these resources; supporting the third party vendor in training the newly hired/contracted (and existing) resources for full Roll-out of Licensing and Grading. Develop any additional staffing plans, analyses and trainings needed by RDB leadership to enable the decision for allocating resources. This should include; o The definition of necessary departments of units that will address the regulatory functions (see 4 MOs), together with roles, responsibilities and detailed job descriptions o Provide an estimate of the volume of work required to effectively administer and implement the regulatory functions when at capacity and taking into account incremental

4 year on year growth. Provide recommendations on numbers of staff to hire in each capacity o Provide assessment and recommendations on technical capacity at RDB and trainings or other suggestions for how to improve capacity o Provide training to assessors and inspectors on the purpose of the regulations, how to use checklists, scoring and how to accurately interpret and record information. Training will not focus on utilization of the automation tool but on the methodology and good practices of conducting assessments. o Provide support to RDB in hiring inspectors and assessors, aligning budgets, searching for appropriate candidates etc. o Development of operational procedures manual for regulators to guide them through each regulatory process (grading and licensing), that provides interpretation of the legislation, and guidelines for effective operation. o Provide other types of support and training where necessary to ensure a well -staffed and functioning regulatory agency. 6 month evaluation. After the initial six months of design and implementation work, conduct a detailed assessment of the effectiveness and efficiency of the tourism licensing, grading and TDL system with regard to both the regulator and private sector. All aspects of functionality should be taken into account, particularly concerning the OECD and key principles laid out in this TORS. All effective regulation should serve a policy purpose, but should place a minimum burden on both the private sector and the regulator in terms of compliance. Where the system is not functioning as well as it could, or where there are complaints from the private sector or the regulator (or other institutions) recommendations should be provided. Focus groups, interviews and surveys should be conducted to assess effectiveness. Recommendations may have a legislative implication. o Outputs include recommendations for Policy Changes, as well as immediate operational changes for RDB to implement. Possible measures include process cycle times; reducing and consolidating the requirement for inspections; number of entities who pass/fail licensing/grading; number of external agency inputs that are missing/present; frequency and types of Inspection/assessment items that trigger re-inspections; cost implications and burden to Tourism Entities of implementing the regulations; policy benchmark against best practices worldwide. Strengthen RDB Financial Management Capability - support RDB to develop process and mechanisms to manage accounts associated with new revenue streams (Licensing Application Fees, Tourism Development Levy Payments, Licensing Fees and Fines, and TDL Penalties and Interest, concession fees) - such that are transparent, efficient and in line with both national requirements and international good practice Design and Implement a restructuring of the tourism Trade Associations - create a membership tier plan for Trade Associations that allows for different types of membership, and reduces the compliance burden on tourism entities to meet the membership requirements of the law. Pilot Implementation Support support RDB with the roll-out of three pilot phases; licensing, automated inspections, and grading. The consultant will provide support in on-going content development, process and requirements support, establishment of a help desk and post-pilot feedback sessions. This support will be practical, and focus on trouble-shooting and hand-holding where necessary to roll out the pilot efficiently. Integrating a Monitoring and Evaluation System. Introduce a monitoring and evaluation system for tracking the implementation of licensing, grading and inspections reforms. Should be integrated in the automation system.

5 Support WBG and technical contractors in development of additional online functionality. Support IFC and contracting partners where appropriate: o Develop business requirements sufficiently so that technical requirements and functionality can be built/configured into the automation tools (including fee and revenue transfers, and subsequent phases of automation. o To develop an online system to manage fully-fledged inspections capability i.e. scheduling inspections, risk profiling, resource allocation as well as online capability to request inspections. o To develop additional licensing capability on the online system such as license variation and appeal submission o To develop fully fledged website of licensed entities i.e. portal of licensed entities with RBD internal info as well as public info such as grading capability o To provide other types of support as necessary to ensure efficient regulation of tourism entities. Part 2 Operationalizing the Grading MO Finalise and agree with RDB and WBG the pilot approach to grading, specifically regarding the level of self-certification, and the use of either RDB assessors or outsourced assessors. Present a time-bound plan to implement the approach, including the phased roll-out of the pilot to tourism entities. Finalise the grading standards to be used (EAC checklist) Part 3 Operationalizing the concessions MO Provide necessary guidance in setting up technical and other evaluation committees as part of the concessions award process Support IFC and their contractors in other relevant supporting tasks Part 4 Operationalizing the Tourism Development Levy MO Establish a revenue collection agreement and working mechanism between RDB and the relevant collection organization(s) Provide detailed guidance to the TDL committee (charter, guidelines) in order that it is set up and functions effectively Support the creation of a decision making system and process for the disposal of levy funds (capacity building etc.), secure buy-in from all relevant stakeholders and provide implementation support Define a plan for implementation and roll-out of the levy collection processes. It will not be possible for collection to apply to all entities at once. The consultant will support the development of a plan or phased approach, secure all relevant buy-in and support implementation of the plan Coordinate and oversee the implementation of this MO in general and provide additional support as needed to ensure its operational effectiveness. These activities will be undertaken both as desk-research and during a field-mission to Rwanda. The field mission will require broad consultation and interviews with relevant authorities, the private sector and other key stakeholders. The consultant(s) is/are expected to be largely self-sufficient in identifying

6 interviewees and meetings, but some technical, administrative and logistical support may be provided by RDB and the WBG. 5. Key Deliverables Deliverable Due Communications and Sensitization Plan (draft) 30 January 2017 Organisational and Staffing plan (complete with 30 January 2017 training materials and operations manual (draft) Organisational and Staffing plan (complete with 28 February 2017 training materials and operations manual (final) All training to be completed March 30 th All outstanding MO specific activities to be March 30 th delivered 6 month evaluation report (draft) May 15 th month evaluation report (final) June 15 th 2017 Precise dates are subject to change. These deliverables should be used to inform the payment schedule. 6. Work program and timetable It is envisaged that this assignment will be completed in 7 months, ending June 30 th Qualifications of the consultant(s) The Consultant(s) must demonstrate the skills and experience required to undertake the tasks set out in this terms of reference. Specifically: The leader should have 10+ years of experience in management consulting or institutional reform, preferably with some experience of the public sector. Experience of governance and public agencies in the tourism sector is a plus Excellent track-record in creative thinking, problem-solving, and strong motivation to deliver solutions that are effective and practical Sound experience and understanding of private sector operations Excellent written and communication skills Experience in Southern Africa is well regarded The proposal should nominate a Team Leader, who will maintain a significant participation throughout the mandate and will be the main point of contact with RDB. The proposed Team Leader shall remain the same person throughout the duration of the assignment. Each individual on the Consultant s team must be personally available to do the work as and when required. 8. Reporting The consulting firm will report to Hamidou Sorgo (Team Leader, WBG), and to Hermione Nevill (tourism specialist) and Lars Grava (licensing specialist).

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