World Bank releases $70 million to help Rwanda combat poverty

KIGALI Wed Mar 19, 2014 1:21pm EDT

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KIGALI (Reuters) - The World Bank signed off on a $70 million financing package for Rwanda on Wednesday, the last tranche of a three-year aid program, which will be partly used to make poverty-fighting programs more effective at combating natural disasters.

The deal, which will include a $46 million loan and a grant of $24 million, was signed shortly after typically tropical rains lashed the hilly capital, Kigali, sending torrents of water cascading through the streets.

President Paul Kagame has led Rwanda's transformation into one of sub-Saharan Africa's most investor-friendly nations in the two decades since the end of a genocide that killed 800,000 people.

Political stability and a raft of reforms to cut red tape and streamline regulations are luring investors to the country, which Kagame wants to become a middle income nation by 2020. His critics accuse him of being authoritarian and trampling on media and political freedoms.

World Bank country manager Carolyn Turk told reporters the funds were the last installment of a three-year spending program worth $650 million that ends in June. She said the size of the next program had not yet been decided but that "she was fairly optimistic."

The government's latest data showed the number of Rwandans living in extreme poverty fell to 24 percent in 2011 from 40 percent a decade earlier.

The Washington-based World Bank forecast in January that Rwanda's economic growth will accelerate to 7.5 percent in 2014, broadly in line with the government's own projection.

Heavy rains and landslides killed at least 77 people and displaced thousands in neighboring Burundi last month, reflecting the risks natural disasters pose to regional economies.

(Reporting by Jenny Clover; Editing by Richard Lough and Susan Fenton)

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