The Kagera Basin, which lies within the four countries of Burundi, Rwanda, Uganda and Tanzania, is characterized by low-production subsistence agriculture and widespread poverty. Severe land degradation in the area is linked to loss of soil fertility caused by population pressure and primitive farming methods. The basin countries rank among the world's poorest countries. Land cover depletion including deforestation is wide-spread with almost total absence of reforestation activities. Soil erosion leads to increased nutrient loads in the river, which flows into Lake Victoria, leading to severe problems of water hyacinth and eutrophication. The basin area has insufficient water for household use and for grazing despite the abundant water sources found in the area. Wetlands have been overused and degraded and cross-border migrations of pastoralists which cause conflicts. Despite the challenges, Kagera basin holds significant opportunities for sustainable development that could enhance food production, energy availability, transportation, industrial development, environmental conservation and other related activities. Cooperative water resources management offers unique opportunities as catalysts for greater regional integration both social-economic and political with potential benefits exceeding those derived from the river itself. This requires a basin-wide approach to management through a framework for sustainable transboundary development and management of the water resources. The Kagera River Basin Project contributes to the improvement of living conditions of the basin communities through social economic development, poverty reduction and reversal of environmental degradation.