Kagame: foreign aid on our terms

Writing in the Financial Times today, Rwandan President Paul Kagame makes a strong case against the “aid regime” as we know it. “The cycle of aid and poverty is durable: as long as poor nations are focused on receiving aid they will not work to improve their economies,” he writes. He’s piping in on a debate sparked by recent FP contributor Dambisa Moyo’s Dead Aid, which argues that Africa’s prosperity begins when the inflow of aid ends:

“Some of Ms Moyo’s prescriptions, such as ending all aid within five years, are aggressive. But I always thought this was the discussion we should be having: when to end aid and how best to end it.”

At first glance, this argument — coming from Kagame — strikes me as odd. Rwanda, and the president in particular, has garnered a reputation as a “darling” of Western donors over the last decade. Today, about 50 percent of the country’s budget comes from foreign aid. And the number could rise. Last week, the country announced a funding gap of $47.4 million for its 2009/2010 budget, thanks to falling exports amid the global financial crisis. Where will that money come from? “[I]f Rwanda does not receive adequate grants, the ministry said, the balance of payments deficit could widen to $251.5 million,” Reuters reports.

Then again, it’s both fantastic and unsurprising to hear Kagame promising to wean his country from development aid — through savy business ventures and smart economic policy. In fact, that’s what the president has already started to do, and it’s the reason that many consider Rwanda the emerging Singapore of Sub-Saharan Africa. The example is one to follow — and not just in the developing world. 

Either way, Kagame’s move is bold. His op-ed in the FT opens his governance and his country up to scrutiny, based on the standard he himself has set:

“No one should pretend that they care about our nations more than we do; or assume that they know what is good for us better than we do ourselves. They should, in fact, respect us for wanting to decide our own fate.”

Let’s hope he decides well.

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