The African Development Bank (AfDB) has approved a loan worth US $76 million (Approximately 51.68 Billion) to Rwanda for boosting skills, entrepreneurship and employment.
According to a statement from the African Development Bank, the loan from the African Development Fund (ADF) will fund a program to support the development skills, employability and entrepreneurship (SEEP II) in the country.
The programme will cover three financial years; 2013 /14, 2014/13 and 2015 /16 respectively.
The Bank's head of operations office, Isaac Lobe Ndoumbe said the loan was approved after deliberations saw Rwanda being a model in terms of competitiveness.
"The support of the ADB directly contributes to the competitiveness of Rwanda, inclusive growth and poverty reduction. Rwanda has made significant progress in the development of skills and labor, which today are more responsive to the demands of the labor market, while promoting job creation for young people.
These advances, through which the private sector is now more involved in the education and technical and vocational training, facilitate access to counseling services for businesses - particularly for micro, small and medium enterprises (MSMEs) - while improving entrepreneurial skills via incubators established," he said.
Rwanda stands at a skills deficit of 40 percent combined with low labor productivity which slows the growth and competitiveness of the private sector.
he main challenge for the country is to increase labor productivity, to create decent jobs and reduce underemployment that is estimated at about 58 percent (63 percent for youths).
Rugwabiza Minega Leonard, chief economist at the Ministry of Finance and Economic Planning said that Rwanda welcomed the loan as it will uplift the country's efforts to implement medium-term strategy for EDPRII.
"The Government of Rwanda appreciates this support. It is timely and will strengthen its efforts to implement medium-term strategy for economic development and poverty reduction - the EDPRS 2," he said.
Young women and men will be the main beneficiaries of the programme. Currently, 40 percent of registered entrepreneurs are women who represent 52 percent of the Country's population.
Rugwabiza applauded the African Development Bank's growing partnership with the government of Rwanda, mainly in supporting its development journey.
"This program shows, once again, the close ties between the Bank and Rwanda. Over the past 40 years, the commitment of the Bank to the Republic of Rwanda totals to more than 1.7 billion U.S. dollars."