Rwanda and European Union Agree on New US $618 Million Development Plan, Reports KT Press

KIGALI, Rwanda, Aug. 4, 2014 /PRNewswire-USNewswire/ -- The Government of Rwanda and the European Union (EU) on August 1, 2014 held strategic bilateral talks on how to further strengthen bilateral development cooperation.  The discussions were held in Rwanda's capital Kigali.

During the meeting Government updated the EU on the country's latest macroeconomic performance and medium term projections while the latter discussed implementation of the 10th European Development Fund (EDF) and the allocations of the 11th EDF amounting to €460 million (approx. US$618 million) for the next 5 years.

Minister of Finance and Economic Planning Claver Gatete noted that despite the 4.6 % economic growth registered in 2013 due to poor performance in the agriculture sector, necessary reforms were put in place to tackle growth impediments to achieve 11.5% growth in by 2018.

"There is a recovery plan," Minister Gatete said. "We will work towards ensuring that impediments are solved by constantly monitoring progress and intervening where necessary."

EU Ambassador to Rwanda Michael Ryan acknowledged the efforts that government has put into enhancing national development and pledged EU's continued support.

"There has been substantial growth registered but more efforts are needed to achieve the EDPRS 2 targets given the growth registered last year," Ambassador Ryan said.

A set of reforms has already been put in place to boost growth. These include Umuganda (the monthly community service program), investment code revision, enforcing use of electronic billing machines to enforce tax compliance as well as taxation regime revision to increase the tax base.

80% of EU development support for Rwanda comes in form of budget support and covers several strategic sectors including energy, agriculture, infrastructure and social protection.

The new program comes at a time when Rwanda is quickly moving closer towards ending all dependence on foreign funding.

In the current 2014/15 budget amounting to Rwf 1.7trillion (US$2.4bn), internal revenues including taxes has moved upwards to 62% - reducing foreign funding to less than 38 percent. The authorities aim to raise more than 70% of needed budget from local resources by 2017.

President Paul Kagame's government wants to transition Rwanda from an agriculture-based economy to an industry and services-based one by prioritizing secondary, tertiary and vocational education, skills development, a healthy workforce and job creation.

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By Fred Mwasa
KT Press
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SOURCE KT Press