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World Bank Continues Poverty Reduction Support in Rwanda

March 16, 2011

KIGALI, March 16, 2011 – Adding strength to the existing partnership to fight poverty, the Government of Rwanda and the World Bank signed an agreement that further supports government’s poverty reduction strategy of targeting job growth and governance.

“The GoR very much appreciate World Bank’s continuous financial and technical support that has helped the Government to make great strides in enhancing the livelihoods of Rwandans,” said Rwanda’s Minister of Finance and Economic Planning John Rwangombwa. “The Government is committed to ensure that policy reforms, sound macro-economic management including the transparent and equitable Public Financial Management, accountability as well as Good Governance are deepened.”

The US$104.4 million International Development Association (IDA) Poverty Reduction Support Financing agreement will help the government implement its Economic Development Poverty Reduction Strategy (EDPRS).

The focus will be to continue policy reforms in two flagship programs in the EDPRS that target growth of jobs and exports, and governance. These reforms have in turn helped to ensure more efficient governance and contributed to broad based growth by easing the key constraints posed by low agriculture productivity; a low skills base; and the relatively high cost of infrastructure services in Rwanda.

The agreement was signed on March 11, 2011 at the Ministry of Finance Headquarters by Rwanda’s Minister of Finance and Economic Planning John Rwangombwa and World Bank Country Manager for Rwanda Mimi Ladipo.

“It is Rwanda’s steady and continuing progress, its continuing commitment to enhancing budget transparency, and its determined focus on the achievement of development results that enables Rwanda to continue to be part of an elite group of countries to which general budget support can continue to be made available by IDA” said Ladipo.

“We look forward to continuing to partner with Rwanda within the context of the successor to the EDPRS, as well as within the context of the World Bank’s new Africa Region Strategy, which benefited from the voices and the perspectives of a number of Rwandan contributors,” Ladipo continued.

Poverty Reduction Support Financing 7 (PRSF-7) is dependent on progress against EDPRS objectives as measured by the Common Performance Assessment Framework (CPAF) relied upon by all budget support partners in Rwanda.At the most recent review in October 2010, the government and its budget support partners agreed thatRwanda is making good progress. And development partners commended the effective use of aid in Rwanda as shown by the progress achieved in all sectors.

“We appreciate the fact that the WB works with other development partners to agree with us on the CPAF and follow our performance together with other dev partners based on the CPAF which is 100 percent linked to the our goals in the EDPRS,” Rwangombwa said.

PRSF 7 will contribute to following key outcome indicators:

  • Transition from basic education to upper secondary education
  • Percent of employees satisfied with performance of (TVET)
  • Number of households and firms with access to electricity
  • MW of electricity generated
  • Percent of classified District Road Network in Good Condition
  • Arable land protected against soil erosion
  • Credit to the private sector (as share of GDP)
  • Percent of Districts achieving minimum of 80 percent of their development targets
  • Percent of budget agencies that achieve at least 80 percent of their targets in their work plan
  • Percent of households with access to clean drinking water and sanitation.

The Poverty Reduction Support Financing 7, which was approved on February 24, 2011 by the World Bank Group Board of Executive Directors, is the fourth and last operation in the second series of World Bank Poverty Reduction Support operations that started in 2008 with Poverty Reduction and Support Grant 4. Given Rwanda’s status as a blend country that receives both IDA credits and grants, US$70 million of the funds is on IDA grant terms while the remaining US$34.4 million is an IDA credit.