Govt reassures of proper use of World Bank grant

The government and the World Bank, yesterday, sealed a $50-million (Rwf31.7 billion) financing deal announced last week, reaffirming commitment to use funds for the intended purpose.
Finance minister Claver Gatete (R) and World Bank Country Manager Carolyn Turk exchange files after signing the deal.The New Times/ J. Mbanda.
Finance minister Claver Gatete (R) and World Bank Country Manager Carolyn Turk exchange files after signing the deal.The New Times/ J. Mbanda.

The government and the World Bank, yesterday, sealed a $50-million (Rwf31.7 billion) financing deal announced last week, reaffirming commitment to use funds for the intended purpose.

The grant meant to boost the country’s social protection system will directly go to the poor, Finance minister Claver Gatete reiterated.

The minister signed the agreement on behalf of the government with World Bank Country Manager, Carolyn Turk, at the Finance Ministry headquarters yesterday.

Amb. Gatete emphasised that the money will help expand the government’s social safety programme to more vulnerable Rwandans.

“It is going directly to the very poor in terms of helping them,” Amb. Gatete said, explaining that government has been successfully investing in helping the country’s poorest and reducing overall poverty levels.

“The investment in our rural sector, the investment in our people is very crucial,” Amb. Gatete said.

The Minister said government will directly manage the money and will channel it through its social safety schemes of Vision 2020 Umurenge Programme (VUP), the Genocide Survivors Support Fund (FARG), and the Rwanda Demobilisation and Reintegration Commission.

Under VUP, which is an integrated local development programme to accelerate poverty eradication and rural growth, the most vulnerable people who can’t work receive around Rwf7,500 per person every month, while those who are able to work are paid to participate in public interest works such as building their local roads and schools.

Stride in social safety

Turk said the Bank was proud to support Rwanda’s social safety net through VUP and described government’s achievements over the years as an “immense progress” and country’s current safety net as “robust”.

“We have been immensely happy to be part of the development partner community that supports the social protection sector,” she said.

Rwanda has made record reduction in poverty levels, from 57 per cent in 2006 to 45 per cent in 2011, an achievement government partly attributes to the success of its social safety net programmes including the Vision 2020 Umurenge Programme.

The World Bank support to VUP, which started in 2008, has helped the programme to cover nearly half of the country’s 416 geographical sectors in 2012, up from just 30 when it was launched.

The number of poor people benefiting from the programme has reportedly grown from less than 10,000 to over half a million in the same period.

Bank states purpose

The World Bank said the $50-million grant released through its international development arm, the International Development Association (IDA), will help reach out to more vulnerable people, especially women and women-headed households.

It is the second batch of its $100-million pledge to support the social protection system in Rwanda.

The first part of the pledge was $40 million and was already released to fund the VUP programme.

The World Bank’s Country Manager told reporters, yesterday, that Rwanda is likely to receive a third batch of the grant next year, around $10 million, as the government continues to show effective management of the funds in the interest of the poor.

The Bank has been releasing the social protection funds for Rwanda through IDA, its worldwide development arm.

Amb. Gatete said government wants to bring overall poverty levels to 20 per cent by the year 2020 while Rwandans living in extreme poverty will be estimated at zero per cent.

WB programme

Social protection, which comprises both social assistance and social insurance programs, is a powerful tool to reduce poverty and vulnerability

The World Bank has a new 10-year strategy for social protection in Africa (2012-2022)

The vision is to help governments build country-owned national social protection systems.

Social protection, once thought of as exclusive to rich and middle-income countries, is being increasingly employed in low-income countries in Africa, where policymakers are recognising its potential as a powerful tool to reduce poverty, vulnerability, and social inequality, according to the Bank.

The Bank also says the food, fuel and financial crises of 2008 have shown the vital role that social protection can play in cushioning poor and vulnerable households from shocks. Across Africa, countries with well-established safety nets, for example, have been able to scale up assistance quickly to these households in times of need.

Social protection, it is mooted, can be an effective way of redistributing the fruits of growth more evenly, including in countries where natural resources wealth does not typically benefit poor people.

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