Can Rwanda Survive Without Foreign Aid?

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This is the question posed by Alain Patrick. To answer this question, let us first look at how revenues raised within Rwanda compare to foreign aid. Take for example the budget of 2016/2017. This is how, on June 8, 2016, the Minister of Finance and Economic Planning, Claver Gatete, explained the budget for 2016/17:

• Rwanda will spend FRW 1.9 trillion (USD2.3 billion) in the 2016-17 fiscal year

• Of this amount, the government will finance its budget through domestic revenues amounting to FRW 1.2 trillion (USD1.4 billion), or 62.4% of the total budget.

• The remainder of the budget will be funded by foreign aid of FRW 733 billion (US$905 million) or 37.6% of the total budget.

From the World Bank data, we know that foreign aid to Rwanda is not decreasing, despite the Rwanda regime claim that the country is getting richer. Here are the figures for foreign aid to Rwanda:

• 2008 – USD933 million
• 2009 – USD933 million
• 2010 – USD1billion
• 2011 – USD1.2 billion
• 2012 – USD878 million
• 2013 – USD1billion
• 2014 – USD1 billion

Here is another point. Rwanda is, in East Africa, by far the highest aid recipient on per capita basis. In 2014, aid per person in Rwanda was USD91, compared to USD51 aid per capita in Tanzania, USD43 in Uganda, USD53 in Kenya, and USD43 in Burundi.

So what is the problem here – why is Rwanda addicted to aid?

The answer is simple. Rwanda hardly has a trading economy. We know from the data of the National Bank of Rwanda (BNR) that while Rwanda in 2015 exported goods worth of USD558 million, the country imported a staggering USD2.3 billion.

No country is doomed to remain like this. Some countries that were once poor became rich. Some that were rich became poor. It is depends on the quality of political and business leadership.

The problem is Rwanda is the RPF regime has grabbed the economic sector as well. It is in agricultural processing, real estate, construction, road-building – you name it. Meanwhile genuine business people have either fled or even mysteriously died. The worst case I can think of is Rwigara, who mysteriously died, and then the regime destroyed his hotel. This is no way to build an economy that can eventually get rid of foreign aid.

As Kagame continues to hunt for medals and degrees around the world, for his so called economic miracle perhaps someone will remind him: “Your Singapore of Africa is big lie chief.”

David Himbara

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