ADF approves $29.6 million loan to fight poverty in Rwanda

from The Angola Press

Kigali, Rwanda, The African Development Fund (ADF) board of directors has approved a US$29.6 million loan to finance the Poverty Reduction Budgetary Assistance (ABRP) in Rwanda, according to a statement from the African Development Bank (AfDB) availed to PANA here on Friday.

The operation seeks to help the government implement the fifth National Development Plan (FNDP) to alleviate poverty and improve the provision of services in the country.

The current poverty reduction budgetary assistance covers four key areas- macroeconomic management, public sector reform, wealth creation and social equality. It includes 33 indicators and steps.

Apart from the ABRP Performance Assessment Framework (CEP), which all the stakeholders outline, the ADF will also concentrate its efforts towards the reform of the system of market transfer and debt management.

The contributions in these two key reform areas are still on standby after starting as part of the ADF financial aid under the Programme supporting budget transparency and the report obligation (SFTA), which is expiring.

The progress in these two areas is of paramount importance for the ADF given that it is believed to help it strengthen the reforms implemented as part of the SFTA.

Among the macroeconomic goals, the country targets a 6 percent annual GDP growth, lower inflation rate of less than 10 percent in 2006 and 5 percent in 2007 and 2008, the reduction of the national loan to 1.6 percent of the GDP in 2006, and 0.7 percent in 2007, the control of the foreign debt, which has significantly been reduced in the wake of the recent relief.

The overall estimated cost to implement the FNDP is expected to increase, from a basic US$12.5 billion to nearly US$14.5 billion. The CDMT and the annual budgets are expected to permanently mirror the priorities spelt out in the FNDP and the development partners to increase their aid in line with the international commitments made by the G8.

The long-term financial needs are included in the CDMT for 2006- 08. The total amount of the expenditure needs planed for the period are estimated at about US$9.484 billion.