Productivity in the agriculture sector could be enhanced thanks to a new financial deal between Government of Rwanda and the United Kingdom.

Rwanda and the UK Department for International Development (DFID), yesterday, signed a memorandum of understanding (MoU) that will see the latter disburse £5 million (about Rwf5 billion) to support agriculture transformation in the country.

The support will increase total DFID funds for the Strategic Plan for the Transformation of Agriculture (PTSAIII) to £39 million (about Rwf39 billion), Amb. Claver Gatete, the minister for finance and economic planning, told The New Times yesterday.

In 2014, the Government and DFID signed a financing agreement worth £34 million (about Rwf34 billion).

The grant was to be disbursed over four years to support the third phase of the country’s agriculture transformation.

The project is an instrument that links disbursement of funds to the achievement of specific programme results and supports efficiency and effectiveness of development programmes to achieve tangible and sustainable results, the minister said.

Gatete said the additional funding will ensure sustainable increase in agricultural productivity which benefits the poor.

"By transforming agriculture sector, we are creating an important source of wealth and a pathway out of poverty through creation of more jobs and incomes for many citizens who rely on the sector for their livelihoods. This additional funding will cater for any funding shortfalls in achieving this crucial objective,” Gatete said.

Part of the fund will be used to build institutional capacity and technical assistance in key areas as well as cater for funding shortfall in financing the existing programme, said the State Minister for Agriculture, Fulgence Nsengiyumva.

Key activities to deliver under the third phase of Strategic Plan for the Transformation of Agriculture include agriculture and animal resource intensification, research, technology transfer, value chain development and private sector development, among others, Nsengiyumva added.

Laure Beaufils, the outgoing head of DFID Rwanda, called on the Ministry of Agriculture to ensure that the transformation is more efficient and mindful of environment conservation.

"Agriculture is key to both economic growth and poverty reduction, so we will continue to support the Rwandan government to ensure that the country’s growth is more inclusive,” Beaufils said.

The UK will continue providing support to environment (FONERWA and Land Reforms) and Financial Sector Development to accelerate economic transformation in Rwanda, she added.

Agriculture contributes more than 33 per cent to the national economy and employs more than 72 per cent of the population.

Rwanda has been ensuring that over 10 per cent of the National Budget goes to agriculture to stimulate growth in the sector, create more jobs, as well as boost exports and increase farmers’ household incomes.

The Government and its partners seek to push the sector’s growth to at least 8.5 per cent by 2018.

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