A new financial deal inked between the Government and the European Union in Kigali, yesterday, is expected to boost growth of agriculture sector in the coming years.

The Government and the EU signed €200 million (about Rwf173 billion) budget support agreement to fund the ongoing transformation of the agriculture sector.

The Minister for Finance and Economic Planning, Claver Gatete, signed for the Government, while the Head of the EU Mission to Rwanda, Amb. Michael Ryan, signed on behalf of the European bloc. Dr Geraldine Mukeshimana, the minister for agriculture and animal resources, witnessed the signing.

The grant will support government programmes to nutrition among rural communities, expand the number of food-secure households while ensuring farmers become more sufficient.

It is also expected to boost crop production by supporting irrigation scheme network across the country and agri-forestry, Mukeshimana said.

She added that part of the money will be injected into automating and digitising savings and credit cooperatives (Umurenge SACCOs) to address the challenge of access to finance at the grassroots.

"It will also help spread agro-forestry in hilly and terraced areas, create job opportunities among export-oriented agricultural producers and processors, and provide suitable loans to farmers and cooperatives,” said Mukeshimana.

Minister Gatete said the grant will help enhance public financial management capacities in agriculture.

"Rwanda has taken bold steps to transform the agriculture sector. This support will contribute to the ongoing transformational efforts in the sector by improving farming methods, increasing food security and creating jobs,” Gatete said.

The grant is part of the 11th European Development Fund signed in September 2014 by European Commission and Rwanda with an envelope of €460 million that runs until 2020.

EU support to Rwanda focuses on agriculture, energy and decentralisation and good governance.

Amb. Ryan reaffirmed EU’s commitment to continue supporting Rwanda on its journey of becoming a middle income economy.

"This is the biggest grant ever provided to Rwanda by the EU and will help support more than 80 per cent (of the population) that depend on the agriculture sector,” Amb. Ryan said.

The country’s agriculture sector grew by 7 percent in the first quarter of 2016, according to statistics from National Institute of Statistics of Rwanda, released last week.

The sector contributed 33 per cent to GDP. The Government targets 8.5 per cent growth rate for the agriculture sector by 2018.

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