KIGALI - Rwanda is set to benefit from a € 175 million (approx Rwf 140 billion) EU budget support grant following a deal that was signed yesterday between Finance Minister James Musoni and EU Development Commissioner, Louis Michel.

Considered a major increase in EU’s budget support to Rwanda, the grant will be provided over the next six years and, Rwanda is reportedly the first African, Caribbean and Pacific (ACP) country to benefit from this "improved form of aid known as the MDG-Contract.”

Musoni welcomed the grant saying it will facilitate the country’s achievement of the Millennium Development Goals.

The MDG-Contract is referred to as a new approach for longer term and, more predictable general budget support.

Michel noted that it was designed as an efficient and innovative way of providing budget support "based on results.”

"It is based not only on our shared commitment towards achieving the Millennium Development Goals, but also on commitment by each partner,” he said after the signing that took place at the Ministry of Foreign Affairs and also witnessed by Minister Rosemary Museminali.

A subsequent EU release indicates that beneficiaries of this type of grant are countries that have demonstrated good performance and sound economic management over an extended period of time.

"The MDGs are part of the milestones of Rwanda’s development agenda,” Musoni stressed while Michel described Rwanda as a "very successful” country in terms of aid effectiveness and underscored that Rwanda proved it can use budget support in "a very good” way.

"This is not only a way of delivering aid, but essentially a tangible sign of mutual trust,” Michel noted, emphasising that "we have finally moved forward and overcome the traditional relations between donor and beneficiary in order to set up a more even and balanced relationship.”

He underscored that budget support is the key for the EU’s development policy, noting that he has always been a strong supporter of the initiative as a better way of disbursing aid. 

The Ministers and the EU Commissioner signed the grant shortly after holding closed discussions that reportedly revolved around "regional issues” such as ways of reviving the long dead sub-regional grouping – the Economic Community of the Great Lakes Region (CEPGL).

CEPGL brings together Rwanda, Burundi and the Democratic Republic of Congo.

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