Rwanda’s recent recognition as one of the top two countries in the world that use aid effectively will not only boost the confidence donors have in the country but also encourage the government to continue doing what it has to do to achieve its development targets.
Rwanda and Tanzania were the only two countries worldwide to achieve an A-rating in a major survey conducted by the Organisation for Economic Cooperation and Development (OECD).
Despite development aid increasing from US$37 billion in 1960 to US$128 billion last year, poor co-ordination and unpredictable aid, puts to waste funds that should be eradicating poverty in the world’s poorest countries.
The survey by OECD, an organisation which brings together donor countries, targeted 78 countries and territories that get aid with the aim of ascertaining how effectively it is put to use.
The findings of the survey released on Friday in Paris gave Rwanda and Tanzania an A rating - the highest score a country can achieve.
The report indicates that Rwanda got the nod of its financers for owning its development process by initiating its own policies – then asking the donor community to fund them.
“Rwanda has adopted a national capacity development strategy and action plan, and put in place institutional arrangements for an operational approach with political leadership,” the report indicates.
Among other areas, Rwanda scored highly on the category of how reliable the procurement system and public financial management systems are, notching up a ‘B’ on the former and 4.0, the highest score by any country, on the latter.
Reacting to the findings, the Minister of Finance and Economic Planning, John Rwangombwa, said that the OECD rating can only boost the confidence development partners have in Rwanda and also encourage the government to do even more.
“This is a good thing. We are happy that development partners have made this observation. We normally do our job by following up on the money that we receive and put it to use.
“We are glad that this comes from the donors who recognise the progress we have been able to make. The rating emphasises how the government has set out to achieve its development goals. We can only be encouraged by this,” Rwangombwa said.
Rwangombwa, who is in Washington DC to attend the International Monetary Fund (IMF) and World Bank annual meetings of Finance ministers, said that the ranking is a boost as most donor countries cut down aid packages as global economies continue to battle crises.
Donor and developing countries signed up to the Paris Declaration on Aid Effectiveness in 2005.
All parties to this ‘aid compact’ agreed that, to uplift more people out of poverty, developing countries must plan and manage their own paths to progress.
The OECD survey on 78 countries and territories is a global scorecard showing aid effectiveness.
The survey notes that some donors still tie aid – imposing restrictions on where goods and services must be bought or contracted, often in the donor country, instead of allowing the developing country to choose the best offer at the best price.
Tied aid increases the cost of development projects by 20 - 30 percent, reducing value for money. Portugal has untied 23 percent of its aid to the countries surveyed, Korea, 44 percent, and Austria, 51 percent. By contrast, Canada, Ireland, Norway and the UK have untied 100 percent of their aid.
Speaking on the Washington meetings, Minister Rwangombwa said that it remains uncertain whether countries would be able to overcome the austerity era, noting that there is a lot more countries have to do.
“It is important that we can meet and discuss these issues, share experiences and forge the way forward. It, however, remains uncertain what the future will be like. Countries need to come up with prudent measures to get out of the current situation,” Rwangombwa observed.