Rwanda is set to witness a stable aid inflow from development partners despite concerns from World Bank that developed countries may slash development assistance to Africa.
The World Bank Vice President for Africa, Obiageli Ezekwesili, warned rich countries against considering cuts to development assistance after the International Monetary Fund (IMF) cut its 2011 and 2012 global growth forecast to 4 per cent.
The Fund had earlier projected an expansion of 4.3 per cent for 2011 and 4.5 per cent for 2012.
“The temptation is great when a crisis looms – as it does now – for rich countries to slash development assistance. This would be a grave mistake,” Obiageli said recently during the first-ever African Investment Summit that was organised by the London Stock Exchange (LSE).
Official data show that aid inflow to Rwanda increased significantly, from US$937m in 2009/2010 to US$955m in 2010/2011, although budget support reduced slightly from 36 per cent to 33 per cent.
And latest central bank statistics show that budget support stood at US$323.66m as of end September this year compared to US$372.85m in same period last year.
“The decline is programmatic and not structural because some of these projects financed by donors have been running and may be in their final stages,” Monique Nsanzabaganwa, central bank Deputy Governor said, highlighting that there is a significant amount of funds channelled through development projects.
The World Bank and UK’s Department for International Development (DFID) are some of Rwanda’s key development partners.
Rwanda has enjoyed a steady inflow in foreign aid because of its aid effectiveness model, Nsanzabaganwa said.
Dmitry Gershenson, the IMF Country Representative told Business Times that he was not expecting a tilt in aid to Rwanda.
“As of now, there is no indication of reducing aid inflow for Rwanda,” he said, explaining that the decline in budget support was occasioned by a big disbursement to projects support.
The IMF also says that emerging economies, whose growth helped support the world economy during the global crisis, are starting to be affected by weaknesses in the advanced economies.
According to Obiageli, cutting aid would be a grave mistake, not because Africa is desperate for aid, but because the global economy is desperate to see a high-performing Africa.
Last week, the Ministry of Finance met with Rwanda’s major development partners to assess the impact of aid on the country’s development ahead of 4th High Level Forum on the Effectiveness of Aid scheduled for November 29 to December 1, 2011 in Busan, South Korea.
She said World Bank will support efforts to build African economies that are resilient to shocks and are protective of the most vulnerable segments of the continent’s population.
While foreign partners like the World Bank and foreign investors can help, “the ultimate responsibility for delivering on Africa’s development promise is that of the peoples of Africa and their governments,” the World Bank Vice President told the summit.