The International Development Association (IDA), executive board has approved financing to the Government of Rwanda amounting to $104.4m to fight poverty.

IDA is the financing arm of the World Bank.The money will go towards the implementation of key reforms outlined in the Economic Development Poverty Reduction Strategy (EDPRS).

Given Rwanda’s status as a blend country, $70 million of the funds are on IDA grant terms and $34.4 million are on IDA credit terms.

Blend countries are those that have a record of effectively using donor funds.

The Poverty Reduction Support Financing 7 (PRSF-7) is the fourth and last operation in a second series of World Bank Poverty Reduction Support operations for the country that started with Poverty Reduction and Support Grant 4 in 2008.

This second series supported policy reforms in two of the EDPRS flagship programs: growth for jobs and exports, and governance.

The Minister of Finance, John Rwangombwa, welcomed the approval of the funds, saying that it’s a sign of confidence which the World Bank has in Rwanda, and also recognition of the government’s commitment towards fighting poverty.

"This is a normal programme of budget support which we have with the World Bank, but what is more important, is the good performance recognisable in the past few years,” Rwangombwa said.

"We are glad that we have got the additional funds which we needed to implement the reforms... the World Bank provides Rwanda with the biggest budget support and we really welcome this development”.
 
According to the World Bank, the reforms have in turn helped to ensure more efficient governance and contributed to broad based growth by easing the key constraints posed by, low agriculture productivity, a low skills base and the relatively high cost of infrastructure services in the country.

PRSF-7 financing is dependent on progress against EDPRS objectives as measured by the Common Performance Assessment Framework (CPAF) relied upon by all budget support partners in Rwanda.

At the most recent review of progress against the CPAF indicators, the October 2010 XII Joint Budget Support Review, the government and its budget support partners, agreed that Rwanda is making good progress in terms of EDPRS implementation.

Development partners commended the effective use of aid in Rwanda as shown by the progress achieved in all sectors.

"It is this steady and continuing progress, Rwanda’s continuing commitment to enhancing budget transparency, and its determined focus on the achievement of development results, that enables Rwanda to continue to be part of an elite group of countries to which general budget support can continue to be made available by IDA,” said Mimi Ladipo, World Bank Country Manager.

Rwanda has continued its strong reform performance, despite the impact of the recent global economic slowdown.

In 2010, the most important reforms supported by the World Bank PRSF program included Cabinet approval of the amended draft Procurement Law, the piloting and subsequent roll-out of the Integrated Financial Management Information System.

Other reforms include the Cabinet approval of a comprehensive framework to support Small and Medium Enterprises, and the introduction of performance-based assessment for all civil servants under the adopted General Statutes for the Public Sector.

"The second Poverty Reduction Support series has been effective in supporting Government-led reforms, providing substantial financing and fostering continuing donor alignment with Rwanda’s own development priorities,” said Birgit Hansl, World Bank Task Team Leader.

The Rwanda IDA portfolio comprises nine investment projects with a net commitment of $237.28 million.

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