Rwanda, Germany sign financial cooperation pact

NYARUGENGE - Rwanda and Germany signed another important financial cooperation agreement at the Ministry of Foreign Affairs and Cooperation (MINAFFET) recently. By signing the agreement, Germany will avail Euros 16.5 million each year. Euros 10 million is earmarked for budget support, 5m for the health sector while 1.5 million will be for good governance. This comes after Germany recently joined the UK and Sweden in channeling financial support to Rwanda mainly through the national budget, a development well appreciated by Rosemary Museminali, the Foreign Affairs Minister. “We want to appreciate your support in our development efforts and we also wish to appreciate that Germany has moved to supporting us directly in budget support apart from the other support projects,” Museminali told Christian Clages, the German Ambassador and his delegation. He also acknowledged the significance of the vital adjustment. “I am happy that we recently started this direct budget support, knowing its usefulness. We believe in cooperation,” he said of the new cooperation arrangement, adding there was optimism that it would deepen and improve in the future. Responding to a question on the probable effect of the current international financial crisis vis-à-vis the future of bilateral financial support, Clages acknowledged that the matter was indeed “a point of concern.” He reasoned that if things didn’t finally stabilise, this could “impact on development cooperation with our development partners.” In what is reportedly the country’s biggest government intervention since the Berlin Wall came down in 1989, Chancellor Angela Merkel’s government has promised as much as Euros 500 billion in loan guarantees and capital to bolster the financial sector. The British government also released an unprecedented 37 billion pounds Monday in a bid to avoid a full-scale collapse of its banking sector. All these bailout plans and others elsewhere already seem to bear fruit, all hinged on speculation that government rescue plans will shore up confidence in the financial systems though the situation may still be far from clear. According to MINAFFET, the current framework of cooperation between the two countries derives from intergovernmental consultations that take place every two years. The two governments signed three vital cooperation accords in July this year in technical and financial cooperation, amounting to Euros 13.5 million. MINAFFET attests that the two countries enjoy friendly relations. German President, Dr. Horst Köhler visited Rwanda in February this year and President Kagame made a reciprocal visit to Germany in April. Shortly after, in June, a high-level German delegation led by Karin Kortmann, Parliamentary State Secretary in the Ministry of Economic Cooperation visited Rwanda to assess its capacity in utilising budget support, which they found very strong. They met President Kagame and visited central ministries, districts and various German-supported projects. Germany contributed Euros 10 million to Rwanda as part of budget support last year and the recent pacts are seen as signs of increased confidence by Germany in the Rwanda government’s commitment to development. Ends

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Rwanda, Germany sign financial cooperation pact