Kagame Loves To Denounce Foreign Aid. He Badly Needs Two Sets Of It.

By David Himbara

In 2016, President Paul Kagame ordered his government to set a deadline for ending Rwanda’s dependence on foreign aid. The Rwandan ruler repeated his favorite phrases — dependency on foreign aid does two things. First, foreign cripples self-reliance. Second, aid defiles the dignity of the people of Rwanda. Kagame’s proclamation went as follows:

“It is better to face things the hard way and go straight to the heart of any problem. Therefore, among the decisions of this Umushyikirano, we should resolve to set a deadline, which should come sooner rather than later, after which Rwanda will no longer be waiting for what others hand out to us.”

Evidently, Kagame will wait for sometime to end his dependence on foreign aid

The rhetoric notwithstanding, Kagame needs two sets of foreign aid. First, as African Union (AU) Chairman, Kagame needs to mobilize massive foreign aid to make the African Continental Free Trade Area (AfCFTA) work. Second, Kagame needs foreign aid to run Rwanda’s parliamentary elections.

African Union needs billions of dollars to make AfCFTA work

 

AU Chairman Kagame has a challenge. He must champion fund-raising from donors to make AfCFTA a reality. The billions of dollars in foreign aid are required for one particular reason — to compensate countries whose revenues will shrink after removing tariffs without alternative sources of revenue. Put differently, the poorer African countries have small tax bases from which to raise taxes — and therefore rely heavily on tariffs. For these countries, cutting tariffs as required for participating in AfCFTA is suicidal, if no foreign aid comes in to compensate for lost ”revenue.” This is how Albert Muchanga, the AU Commissioner for Trade explains the dilemma:

”We’re trying to get some funds, an adjustment mechanism, to alleviate the impact [of cutting tariffs] and then move towards expanding the production base.”

Billions in aid to fill in the gap of lost tariff revenues is expected to come from the European Union (EU) and World Bank.

Kagame needs foreign aid to run Rwanda’s parliamentary elections

 

The second set of foreign aid Kagame needs has to do with holding the 2018 parliamentary elections in Rwanda. Kagame is short of US$634,290 and needs donor money to fill the gap.

Kagame’s rhetoric is never matched by reality.

 

In 2016, Kagame ordered his government to set a deadline for ending Rwanda’s dependence on foreign aid. It is one thing to call for ending the dependency on donor money, but quite another to build a robust economy required to end this addiction. Two years after bombastically calling for ending aid dependence, Kagame is begging for as little as US$643,290 to run elections. The man has no shame.

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