The World Bank yesterday approved $200 million to fund programmes aimed at improving food security and public finance management in Rwanda.
Each programme will get $100million as beneficiaries of International Development Association that helps countries by providing zero-interest loans and grants for projects and programmes that boost economic growth, reduce poverty, and improve lives of the poor.
Support to public finance management will boost the government’s statistical capacity to make evidence-based policy decisions and improve planning and budgeting.
Meanwhile, the transformation of the agriculture sector program phase 3 with funding of $100 million will support strategic objectives to transform the agricultural sector.
Carolyn Turk, the World Bank Country Manager, said the government’s budget strategy is aligned to its national development objectives of eliminating extreme poverty and inequality, but aid fluctuations constrain implementation of government expenditure programs.
As a mitigating measure, Turk said, the two programs approved for funding will both utilize the Program for Results (PforR) financing instrument in order to improve the efficiency and effectiveness of government expenditure programs and help build institutions and capacity under the programs being supported.
“Anchoring disbursement against results by using the PforR instrument will enhance the predictability of budget financing and allow the government to allocate resources to priority areas such as improving rural food security and nutrition, boosting private sector investment in agriculture and increasing farmer’s incomes,” said Turk.
An ongoing parliamentary accounts committee which is following up on the Auditor General’s on government institutions has unearthed a number of expenditure irregularities which experts have blamed on insufficient capacity among government account managers.
But the new credit line, Sunday Times understands will focus on improving capacity in accounting, auditing, budgeting and reporting in both national and sub-national governmental institutions.
Yoichiro Ishihara, the World Bank Task Team Leader for the Public Sector Governance Program told The Sunday Times that improving transparency and accountability is especially important at the sub-national level because local governments in Rwanda have important service delivery responsibilities.
“The program will increase the availability of good development statistics that can better target government expenditures and continuously measure their social and economic impact which will ultimately improve the effective use of public resources,” Ishihara said.
Rwanda has registered strong economic growth over the past decade, but 45 percent of Rwandans are still poor.
In order to address that challenge, WB says $100 million will be spent on supporting activities under the agricultural transformation program whose aim is to improve the rural farmers’ standards of living.
It is understood that the program has potential of lifting almost three million people living in rural areas out of poverty by raising famer’s income through diversification of crops, better use of input to combat land erosion, improving irrigation, and increased private sector investments.
Mark Austin, the World Bank Task Team Leader for the Transformation of Agriculture Program said enhancing food security and nutrition particularly for rural farmers in Rwanda involves tackling multiple dimensions to improving crop yields, nutritional outcomes and increasing rural incomes.
“The program will help generate greater benefits to rural farmers through improved agriculture and animal resource intensification practices, research and technology transfers and professionalization of farmers, value chain development to encourage more private sector engagement, and institutional capacity development on cross-cutting agriculture issues,” said Austin.
Claver Gatete, the Minister of Finance and Economic planning told The Sunday Times that the approved money is what the government negotiated and agreed with World Bank in Rwanda and that it’s in line with supporting EDPRS II programs.
“Before the approval, we negotiated and agreed on the framework and on the areas where we intend to spend the money and we are very happy with the approval by the World Bank board,” Gatete said yesterday.
Under the 2014/2015 budget, rural development thematic area whose main objective is to improve the quality of life and economic well-being of people living in rural areas was allocated Rwf 252.8 billion equivalent to 14 per cent of the total resources.