Sixth Poverty Reduction Support Grant

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The Sixth Poverty Reduction Support Grant Program (PRSG-6) continues to support the Government of Rwanda as it implements measures to foster broad based growth in the context of enhanced decentralization reforms. PRSG-6 is the third operation in the second series of PRSGs (beginning with PRSG-4). It forms an integral part of the Bank's Country Assistance Strategy (CAS), approved by the Board of Executive Directors on September 26, 2008 in support of the Government's Economic Development and Poverty Reduction Strategy (EDPRS). The EDPRS covers the period 2008-2012 and takes stock of a decade of achievements in rehabilitation and reconstruction. It presents a strategy focused on accelerating growth and human development, with an emphasis on decentralization, and a greater role for the private sector. The EDPRS priorities are articulated through three flagship programs aimed at promoting sustainable growth and poverty reduction and improving governance. The main risks to the program are: (i) continued instability in the great lakes sub-region and the effects on economic stability and donor support; (ii) government capacity to implement the EDPRS; and (iii) continued global economic slowdown. The downside risk to Rwanda's economic growth should the global slowdown persist will arise from a likely increase in the external account deficit from a reduction in export earnings. The Bank is monitoring the situation and providing additional finance of $29.8 million through the crisis response window. Government will continue its policy of identifying areas for contingent spending as more external resources become available. Government will continue to protect priority spending from reductions in overall spending, expand the tax base and improve the efficiency of the tax system.