Agri-productivity could improve thanks to a new World Bank Group’s credit line.
The Government of Rwanda and World Bank Group yesterday signed a $46 million (approx. Rwf38 billion) loan to support farming across the country.
The money is part of the International Development Association (IDA) funding agreed upon back in 2014.
Amb. Claver Gatete, the Minister for Finance and Economic Planning, and Yasser El-Gammal, the World Bank country director, signed on behalf of the parties.
The financing will be used to support the third phase of four broad programmes aimed at transforming agriculture across the country, Minister Gatete said during the signing ceremony in Kigali.
“The financial agreement provides additional support to the already existing government’s efforts to improve and diversify the country’s agriculture sector,” Gatete added.
According to Jean Claude Kayisinga, the permanent secretary, Ministry of Agriculture and Animal Resources, the fund will help increase the sector productivity focusing mainly on land terracing, irrigation and livestock.
“Specifically, the funds will be used for agriculture and animal resource intensification, research, technology transfer and professionalisation of farmers,” Kayisinga, noted.
He added that part of the funds was allocated toward value chain development, private as well as institutional development.
“In addition, the new financing will support the ministry to both finalise the development of the new National Agriculture Policy,” he said.
The project is designed to help improve food and nutrition security for the rural population, including increasing agro-processing to create non-farm employment.
It will support government’s efforts to increase commercialisation of agriculture production, such as securing and strengthening domestic and international markets, while increasing exports and reducing imports.
It is also expected to enhance enabling environment to attract the private sector to invest and add value.
“This additional credit line is part of World Bank’s efforts to continue supporting government’s on-going efforts towards expanding and sustaining the increased productivity gains that have contributed to strong agriculture growth and raised rural incomes, thus reducing poverty levels,” said El-Gammal, the WB country director.
In 2014, the World Bank approved $60.9 million (about Rwf50 billion) to support infrastructure and agriculture sectors.
Part of the money was to be used to finance feeder road infrastructure development, agri-production and market accessibility by farmers.
Agriculture employs more than 72 per cent of the population and contributed about 33 per cent to the national economy during the third quarter of 2016.
Though the government targets 8.5 per cent growth rate for the agriculture sector by 2018, the sector grew by only 6 per cent during the third quarter of 2016.
The government is counting counting on agriculture for economic resilience and sustainability during 2017.