Rwanda reduces reliance on aid

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By Bosco Hitimana

Rwanda has taken remarkable strides in reducing aid reliance and increasing accountability on the incoming donor funds according to reports released recently by two organizations.

One report by Actionaid says  the Central African country aid dependency reduced from 86% in 2000 to 45% in 2010 while a report by the Organization for Economic Co-operation and Development (OECD) hails Rwanda on spending donor money properly.

Actionaid says for Rwanda, quality aid also termed as real aid has helped transform the country from a shattered economy in 1994 genocide to a country able to meet the social needs of its people through increased domestic revenues.

“We have shown donors that when we are in the driving seat – deciding how to allocate aid money ourselves – we spend donor money more effectively.

“Donors have responded to the results we have delivered by giving us more and more say over how we use their aid,” a statement from Actionaid quotes Director of the External Finance Unit in Rwanda’s Ministry of Finance and Economic Planning Mr. Ronald  Nkusi as saying.

With the support of a significant amount of foreign aid, Rwanda has made great strides towards meeting the UN’s Millennium Development Goals (MDGs), Actionaid says.

“Universal primary education has almost been achieved, rising from 62% in 2000 to 94% ten years later,” the civil society organization with operations in over countries mainly poor ones says.

The organization goes on to say that effort to tackle child mortality, promote gender equality and combat the spread of HIV/AIDS and malaria means Rwanda is on course to achieve many of the MDG targets.

“Optimistic Rwandan ministers say all the goals are in reach. This progress has been made at the same time as Rwanda has reduced its dependency on foreign aid.”

Aid as a percentage of government expenditure has dropped from 85% in 2000, to 45% in 2010.
The 2011 statistics from the ministry of finance also indicate that aid dependency has further dropped to 41%.

The case of Rwanda’s transformation over the last decade reveals how strong country ownership over aid spending, coupled with donors increasing their ‘real aid’ contributions and increased domestic resources can combine to reduce a country’s dependency on foreign aid.

ActionAid Rwanda’s Country Director Josephine Uwamariya said in statement, “These results show we’re moving in the right direction – and means that good quality aid – real aid – is working.”

She added, “Not all aid is the same. Real aid is effective and has few strings attached. It puts developing countries where they should be – in the driving seat of their own development. It makes governments answerable to their own citizens, rather than to the donors. And real aid can help countries do things like raising tax revenues more effectively, so they can generate more of their own funds for development.”

Source:http://www.busiweek.com/11/news/rwanda/2051-rwanda-reduces-reliance-on-aid-

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