Donor budget support increases by 20 percent

Finance Minister John Rwangombwa greets the Head of Development Cooperation in the German Embassy and other Development partners after the meeting. (Photo/ J. Mbanda)

KIGALI - Development partners yesterday hailed government for maintaining a steady economic growth path and announced a 21 percent increase in their support to the country's budget in the 2010/11 fiscal year. Speaking on behalf of seven development partners after signing a $335.4 budget support package for next fiscal year, Dr. Heike Henn, Head of Development Cooperation at the Germany Embassy said that the commitment made was a result of positive development Rwanda had registered. "The year 2009 has been a year of successful collaboration between the Government of Rwanda and the Budget Support Development Partners. We comment the government for the progress we have seen throughout the year," he said. "We have seen Macro-economic stability despite the difficult environment. We are seeing good progress regarding EDPRS implementation for example in health and education," Henn said at the ceremony held at MINICOFIN. She noted that the estimated growth figures of 2009 and a strong performance of the agriculture sector "are encouraging" especially when the world is facing economic hardships. Within the new pledged support, the World Bank contributed $91m, European Commission $80.5m, United Kingdom $63.1m, African Development Bank $27.6m, Germany $15.2m, Netherlands $14.4m and Belgium $4.3m. Most of the funding will be front-loaded in the first two quarters of the 2010/11 Financial Year. Rwanda will also receive additional funding of $39.3m through Joint Financing Mechanisms, bringing the total amount to $335.4 from development partners. The commitment received yesterday means that the government can now fully programme all budget support contributions into the National budget in due time for the next fiscal year. The commitment comes five weeks after conclusion of the Joint Budget Support Review held in November where development partners and the government made an overall assessment in of implementation of EDPRS programs during the 2009/10 Fiscal year. The partners also announced their commitment to fund the 2011/12 and 2012/13 fiscal year budget. "Budget support directly translates into public spending on priority areas for economic development and poverty reduction. It makes up a significant share of the overall budget and without it, the implementation of the EDPRS would be impossible," Henn said. Finance Minister John Rwangombwa commended development partners and pledged to ensure aid effectiveness and accountability. "Budget support is an aid modality based on deep mutual trust and depends on development partner's confidence in the country's systems," the Minister said. "By their presence and the pledges made today, our budget support partners signal that they believe in the government overall development plan with the ultimate aim of reducing and eventually eradicating poverty," Rwangombwa said. He noted that the 21 percent increase in the commitment is a sign of confidence from the development partners and Rwandans-assuring the partners that 'every penny' received goes towards improving the lives of all Rwandans. Ends

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