Rwanda: African Bank GivesCountry $ 50 Million for Poverty Fight

from All Africa

Rwanda News Agency/Agence Rwandaise d'Information (Kigali)
NEWS
Kigali

The African Development Bank (AfDB) Group has approved a grant of US$ 50 million (Rwf 25 billion) to help finance the second phase of the Poverty Reduction Strategy Support Program (PRSSP II) in Rwanda, RNA reports.

Government adopted a modified poverty fight model termed as the "Economic Development and Poverty Reduction Strategy" (EDPRS) for 2007-2011. EDPRS followed the implementation of the 2002-2006 Poverty Redaction Strategy Paper (PRSP).

The Bank said Wednesday in a statement that the grant would be used to improve public finance management by improving budget programming and execution. The grant is in fact from the African Development Fund, a concessional window of the African Development Bank (AfDB) Group.

The money will also help create an enabling environment for business development and export promotion by improving the legal and institutional framework as well as strengthening financial intermediation and consolidating the banking system.

Early June, the Investment Facility for Africa (ICF) also injected US $8.9 million into efforts to strengthen the investment attraction capacity of Rwanda. Under the project 'Rwanda Investment Climate Project' the export promotion agency RIEPA will be reorganized. The financing will also help with starting-up of a commercial court and strengthen the standards bureau.

The ADB said today in Tunis (Tunisia) that through PRSSP-II, the ADF grant will support the implementation of the Government's PRSP program, in close collaboration with the World Bank, EU, DFID, Sweden, and Germany. These donor partners fall under the Budget Support Group that support Rwanda directly through budget top-up.

The ADB group began operations in Rwanda in 1974 and its cumulative commitment in the country stands at US$ 950 million for 113 operations. Its current portfolio in the country is currently made up of 16 active projects amounting to $250million (FRW 138billion), of which the education sector takes up 24%.

In June last year, Bank (ADB) provided US$ 24 million grant to government in support of the Education Sector Strategic Plan (ESSP) 2006-2010 aimed at developing the human resource capacity of the country.

Then in July, Bank earmarked another US$ 14.79 (Rwf 8.2 Billion) million to revive agricultural production in the drought-affected Bugesera Region.

The two-phased project aims at increasing agricultural production in the Bugesera Region by setting up irrigation infrastructure in a 650- hectare valley. It would also fund protection of water catchments basins and improve rain-fed farming on nearly 5,000 hectares of hills, as well as build the capacity of farmers and supervisory institutions.

The Bugesera region has of late been on the spotlight nationally and internationally following a hard hitting drought that left residents with barely anything to survive. It targeted 60,750 inhabitants (about 13,500 households).

At one point, the World Food Program Rwanda country office predicted a "social crisis" as hunger had forced people to eat grass and cassava leaves to survive.

Rwanda released its foreign policy last year in which said it would no long take any loans preferring to be given grants. Government said the motivation for the plan was because Rwanda did not have the capacity to accumulate debt.

As part of the same plan, government wanted all support channeled directly into its coffers - essentially to allow it make its own priorities. And indeed, most donor partners have been providing budgetary support.