The African Development Bank has said it approved a concessional loan of $97.675 million to Rwanda on Thursday to help the country respond to the Covid-19 pandemic.

The Bank said the funds will strengthen Rwanda's national budget as it works to mitigate impacts of the Covid-19 global epidemic.

The funding will take the form of an African Development Fund loan, which the Bank is providing under its Covid-19 Response Facility.

The government has deployed several preventive health measures since it recorded its first Covid-19 case.

Like many other countries, Rwanda imposed a total lockdown in March and a travel ban for domestic and international flights.

Since May 4, the government has partially reopened the country, encouraging remote work and to observe physical distancing measures, among other things.

Under the Bank's Crisis Response Budget Support Programme, the government will use the funding to strengthen the health system to contain the spread of Covid-19.

The Bank said the funds will also safeguard economic resilience, and mitigate the pandemic’s impact on vulnerable sectors of the population. 

Health sector measures entail bolstering surveillance, infection prevention and control capacity so the health authorities can better monitor, track and identify hotspots, enhance laboratory capacity for testing, and treatment of the severely ill.  

The loan will similarly support risk communication and community engagement on the virus.  

The government will work to shore up economic resilience by clearing arrears to domestic suppliers, enabling the private sector to continue to invest, pay taxes and repay loans. 

The Covid-19 containment measures combined with weaker global demand and disruptions in the global supply chain have mainly impacted the hospitality, education, services, agriculture and trading sectors. 

This has led to losses in revenues and jobs, especially those related to casual workers, informal sector including micro small and medium enterprises, and those laid off in the formal economy. 

The loss of income is threatening to push households into poverty, especially those that were living at the poverty margin before the pandemic.

In response, the government has approved the Economic Recovery Programme which will scale up existing social protection and healthcare programs to these vulnerable segments of the population.

"We are pleased to provide this crisis response budget operation to support the Government of Rwanda in their efforts to contain the negative impact of the COVID-19 on the people of Rwanda and the government fiscal space,” Nnenna Nwabufo, the Bank’s acting Director-General for East Africa said Una statement.

"We are confident that the government will execute the planned programs with great efficiency and diligence," she added.

Under a worst-case scenario, Rwanda’s real GDP in 2020 is forecast to contract by 2.0 per cent. 

The pandemic is also expected to sharply raise unemployment levels.

The proposed budget support programme is aligned with the Government's National Preparedness and Response Plan and Economic Recovery Plan. 

It also aligns with the Bank Group’s Ten-Year Strategy and the High 5 priority to "improve the quality of life of the people of Africa."