The support will come in the form of a loan of 21.9 million Units of Account (UA*), equivalent to 32.17 million US dollars, from the African Development Fund (ADF), the concessional window of the ADB, approved by its Board of Directors in Tunis on Wednesday.
The government estimates that poverty currently affects 60% of the population. With the support of the ADB Group, the country achieved a two-digit growth rate between 1995-1997, and maintained an annual growth rate of 7.7% up to 2002, to overcome a 50% economic decline caused by the 1994 genocide.
The Poverty Reduction Strategy Support Loan Phase I (PRSSP I, 2004-2006) is intended to reduce poverty through accelerated and sustainable economic growth capable of contributing to achieving the millennium development goals.
The budgetary support will focus on three components of the Government’s 2004-2006 Programme: support to growth and competitiveness, improvement of economic infrastructure including environmental protection and improvement and strengthening of governance.
It will enable the government to:
- Pursue reforms aimed at creating a solid basis for transforming the agricultural sector and promoting exports, private sector development and restructuring of the banking system;
- Pursue reforms in public finance management and governance;
- Strive towards achieving the MDGs notably in the areas of economic growth, water and energy.
The programme is targeting real growth rate increases from 6% to 7% over the 2004-2006 period, investment rate of 22 % by 2005 (compared to 17.8% in 2002), private investment increases by 13% from 2005 onwards and an increase in the volume of major commodity exports by 6% as from 2006. onwards.
The ADF loan will be used in conjunction with the assistance provided by the Bretton Woods institutions, European Union, Department for International Development and other development partners to finance the programme.
The Bank Group operations in Rwanda started in 1974. To date, the Group has committed in the country approximately US$ 620 million in 64 operations.
- Name of Programme: Poverty Reduction Strategy Support Programme -Phase I (PRSSP.I)
- Location: Countrywide
- Execution Agency: Ministry of Finance and Economic Planning (MINECOFIN), Kigali.
- Start up and Duration: January 2005 for 2 years
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