WASHINGTON, March 13, 2014 – The World Bank’s Board of Executive Directors has approved the third in a series of programs for Rwanda that will help accelerate the country’s impressive poverty reduction of recent years. The US$70 million IDA allocation will be used to expand and strengthen Rwanda’s social protection system, which protects the most vulnerable people against the worst effects of poverty.
Rwanda has reduced extreme poverty dramatically in recent years, from 40 percent in 2001 to 24 percent in 2011. This remarkable success has been achieved with support from the World Bank and other partners, and social protection has been established as a central policy tool for reaching the poor and the vulnerable. Rwanda’s flagship social safety net—the Vision 2020 Umurenge program (VUP) consisting primarily of cash transfers and public works employment—now covers close to a million people.
“Everybody should benefit equally from Rwanda’s economic growth,” said James Musoni, Rwanda’s Minister of Local Development. “Targeting vulnerable families and persons with disabilities or elderly people makes our growth more inclusive and will help us reach our vision of becoming a middle income country by 2020.”
Rwanda has already undertaken a number of strong policy actions that have established it as a leader among low-income countries seeking to build a strong base for their social protection systems. The new grant will help to strengthen management capacity and monitoring systems, make social protection more responsive to natural disasters, and expand coverage to greater numbers of poor regions and people.
“The government has used social protection programs very effectively over the past decade and is now pursuing an even more ambitious goal—to reduce extreme poverty to 9 percent by 2018,” said Carolyn Turk, World Bank Country Manager for Rwanda. “The new grant will strengthen the national social protection system so that it becomes more efficient, reaches more people, and is flexible in times of crisis.”
Vivienne Nyiramahigura is a 45 years old beneficiary of VUP public work. She is a widow, and heads a household of seven people. She lives with her 70 year old mother. Her earnings have helped her to feed her family, pay for their health insurance as well as school fees and scholastic material for her son.
Vivienne says that before VUP: “there was nowhere I expected to get that amount of money. We could not afford to pay for such things”.
“Despite Rwanda’s remarkable progress and strong economic growth, many families are still poor, live in rural areas, and are vulnerable to climate-related disasters,” said Laura Rawlings, World Bank task team leader for the project. “Regular cash transfers or income from temporary jobs in public works projects such as terracing the land helps poor families to buy food and keep children in school even during hard times, giving this generation and the next a chance to prosper as the Rwandan economy develops.”
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing loans (called “credits”) and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 82 poorest countries, 40 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.