By Hereward Holland

KIGALI, March 7 (Reuters) - The World Bank said on Saturday it would donate an extra $172 million to Rwanda by June, to deflect knock-on effects of the financial crisis in advanced economies.

Johannes Zutt, Rwanda's World Bank country director, said most developing countries had been spared from "first order effects" of the global credit crunch.

The World Bank is increasing access to concessional finances globally, with Rwanda receiving roughly 30 percent more than normal this year.

"What we are starting to see in many countries in Africa, including Rwanda, is second order effects such as lower trade, lower investment, lower overseas development assistance, lower remittances (and) lower tourism receipts," he said.

Zutt told reporters Rwanda faced a liquidity crisis, making it difficult for banks to provide funds for local businesses.

He said it was also important for small economies, like Rwanda, to open their markets and integrate trade with other countries, like in the East African Common Market.

Integration will increase competition and ultimately make African companies more competitive on the global stage, he said.

"It's extremely important for these countries to develop competitive industries that can reach markets outside of their borders," he said.

"Ultimately the way these economies are going to develop is by creating an investment climate for the private sector that will allow the private sector to grow, create jobs and bring prosperity to the citizens of these countries."

Rwanda recorded 11.2 percent growth last year, largely from increased agricultural output.

The economy is being rebuilt through investment in agriculture, coffee, tea, mining, tourism and ICT, following the 1994 genocide of 800,000 ethnic Tutsis and moderate Hutus. (Editing by Mike Peacock)

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