The World Bank has approved a grant of US$50 million to be injected into a Rwanda government program that gives direct cash transfers to the extremely poor across the country.
The funding, which goes to government, will support its national social protection system called the Vision 2020 Umurenge Program (VUP). By cushioning more people from the full impact of various shocks, from unemployment or illness to sudden natural disasters, Rwanda will be able to make further dramatic cuts in poverty and inequality, said the Bank in a statement on Thursday.
Rwanda has recently seen a record decline in poverty, from 57 percent in 2006 to 45 percent in 2011. The government has partly attributed this success to its social safety net programs.
World Bank support to Rwanda's primary social safety net--the Vision 2020 Umurenge Program (VUP)--has already helped the program to cover nearly half of the country's 416 geographical sectors in 2012, up from just 30 when it was launched in 2008. The number of poor people benefiting from the program has grown from less than 10,000 to over half a million in the same period.
Forty-five year old widow and mother of three, Viviane Nyiramahigura from Nyamirama Sector is one of the many who benefit from public works employment under the VUP. "If it were not for the VUP public works program, there is no way I could have raised money to send my son to secondary school, pay the health insurance subscription for my family, or clothe and feed my children," she said.
"While Rwanda has pushed back poverty dramatically in the past decade, it is still one of the world's poorest countries," said Carolyn Turk, World Bank Country Manager for Rwanda. "We are happy to continue supporting Rwanda's efforts to manage its social safety net programs more efficiently, so that poor people can withstand economic and climatic shocks better and benefit more from economic growth."
The Second Support to the Social Protection System program, funded through the World Bank's International Development Association (IDA)*, will help the Government of Rwanda to implement its National Social Protection Strategy. Specifically, it will boost government capacity to expand and move towards managing various programs--including cash transfer elements of the VUP, the Genocide Survivors Support Fund, and the Rwanda Demobilization and Reintegration Program--under a single system.
The improved social protection system will help ensure that benefits reach those most in need.
"This World Bank grant will also help Rwanda to build a link between its social protection system and its disaster risk management framework through climate-related early warning mechanisms," said Alex Kamurase, World Bank Task Team Leader for the program. "The government will then be able to quickly scale up support to poor people living in rural areas during hard times such as drought."
The latest World Bank injection comes after another 9million pounds from the UK announced early this week, also going to the VUP program. More than half a million people will benefit from this UK funding.