Rwanda is leading an appeal by African and other developing countries to urge donor countries to provide aid without any conditions.
The call is being made at the 4th High Level Forum on Aid Effectiveness which began yesterday in Busan, South Korea.
Rwanda, one of the countries credited for effective use of aid, is pushing for an end to the practice of donor countries providing aid to African countries with strings attached, at least by the end of 2013.
In an interview with The New Times, the Minister of Finance John Rwangombwa who is in Busan, said that Rwanda is representing African countries in the negotiations and drafting of the final document to come out of Busan.
Among other things, African countries want donors to end the practice of linking aid to purchases from companies in donor countries and removing the conditions that come with aid, to allow individual countries to map out their own development plans.
“Rwanda is not just speaking for itself but we are representing other African countries on the final document from Busan. We have been negotiating for more than two months,” Rwangombwa said.
“Our expectations are that Busan should come up with concrete measures that will convince donors to abandon the practice of providing tied aid and instead move towards supporting individual country programmes,”
The Korea meeting also aims at assessing progress made in improving the handling of aid.
The Busan meeting is a follow up to the previous meeting in Paris where donor and recipient countries agreed on a number of principles to improve aid quality, amid growing concerns that development assistance was being fragmented and aid delivery was often hampered by bureaucracy.
The lobbying countries led by Rwanda have received backing from civil society and advocacy groups from around the world.
In an interview with The New Times, the Regional (East Africa) Representative of the African Development Bank (AfDB), Gabriel Negatu said that the continental bank is behind developing countries, observing that the time is now for donors to trust them.
“I think Busan provides an excellent opportunity for African countries to speak in one voice in favour of untying aid and also for the donors to make the commitment to untie aid,” Negatu said.
“This will allow countries to come up with their own policies and programmes that suit their development demands, which means country ownership of the development process. This is normally affected by tied aid.”
Negatu said that tied aid has affected African countries in many ways and in most cases such aid has not met its objectives as it ends up being spent back in the donor countries, through purchases and consultancy services.
“Donor countries need to show confidence in the ability of countries like Rwanda that have showed that they can move forward using home grown solutions, policies and ownership of the development process by the people.”
“Untying aid is not a new agenda, so Africa and its friends should use this opportunity to advocate for the untying of aid. There is room for progress in Busan,” he added.
Negatu noted that African leaders like President Kagame, Jacob Zuma, Alassane Outtara and Prime Minister Meles Zenawi should champion this cause, adding that the AfDB strongly supports the call to untie aid.
Reacting to the development, Prof. Anastase Shyaka, the Executive Secretary of the Rwanda Governance Advisory Council (RGAC), said that from the governance point of view, it is possible for development partners to reach an understanding with developing countries on untying aid.
He noted that donor countries should use other yardsticks to measure aid effectiveness rather than stick to old principles and good governance is one of them.
“Rwanda, for example, has been able to effectively use aid because of good governance structures and frameworks which ensure accountability. So in my view donors should provide aid to strengthen the same areas they cite weaknesses rather than cutting it,” Shyaka said.
Prof. Shyaka added that Rwanda has proved that aid effectiveness is related to good governance and that it is possible that African countries can have a rational dialogue with development partners to ensure a new paradigm shift on how aid is regulated.
In 2001, donor countries pledged to end tied aid but there has been little or no progress registered towards this, with analysts arguing that most of the aid provided by donors has not been useful as it comes with strings attached.
It has been further estimated that over $69bn – more than half of the total official development assistance has indirectly flown back to or remained in the donor countries through purchases and procurement deals which result from the set conditions.