4 October 2012

Rwanda: Aid Puzzle

Lawmaker wants Rwanda to blow aid suspensions' grievances louder Constance Rwaka, Head of the Parliamentary Budget Review Commission of the lower chamber of the Rwandan Parliament has proposed that the country take its grievances to the International Parliamentary Forum over the recent aid suspensions by some of the donor countries.

"I think Rwanda has a case," Hon. Rwaka told other members of the parliament recently.

"Donors committed themselves to dispense aid to Rwanda, so by suspending it abruptly, when Rwanda is one of the few countries that have received praise over the way it uses donor money shows that donors breached their obligations, which is certain to cause disastrous results," Rwaka further observed.

"I therefore propose that we discuss this proposal and afterwards forward it to the International Parliamentarians forum," Rwaka urged the lawmakers.

However it is still not yet clear when Parliamentarians will start studying ways of lodging an appeal to the international forum which comprises of 156 member countries.

Apart from Britain which has unfrozen part its aid to Rwanda, the Netherlands (5million Euros), Germany (7million Euros), US (US$12million ), African Development Bank (US$40 million) and Sweden (unspecified) have not indicated any like hood of when the aid will be unfrozen.

Juvenal Nkusi, the chairman of the Parliamentary Public Accounts Committee (PAC) says the problem is not the amount of money that was suspended but the process that the donor countries used in suspending it.

"The proposal to take the issue of suspension of aid to the International Parliamentary Forum is not based on the amount of money suspended but the process with which it was carried out," says Nkusi.

"It is their right to give aid but when a donor country commits itself to giving aid and when all of a sudden they decide to suspend it in such a sudden manner that is where we have a problem with the donors," Nkusi further explained.

"I think the correct word to use is Agaciro[respect], because two countries (a donor and recipient) agree with one committing to give aid and the other to use that aid effectively, so if a [ donor] country decides abruptly to stop their obligations, it has adverse effects on the programs that the aid is earmarked for."

Another sticking point according to Nkusi is why the donor countries didn't inform their respective parliaments that they were going to suspend aid to Rwanda.

"When donors are going to give aid, they include it in their budgets which are approved by their respective parliaments but when they take decisions to suspend it, they don't table those decisions in their respective parliaments that approved the aid disbursement. So that is what we want to petition the International Parliamentary forum for," NKusi says.

Nkusi also says the matter should not be looked at as a Rwandan problem but as something that can affect any country which depends on aid.

A Kigali based international relations analyst who has followed the process of aid suspensions but preferred to remain anonymous believes that the Rwandan lawmakers have a basis to challenge the suspension of aid to Rwanda.

"The first question to ask yourself is whether Rwanda violated the MOU [memorandum of understanding] that it signed with the different countries that suspended the aid, if it did not, then the basis that was used to suspend the aid is wanting," says the analyst.

"Procedurally, the legislature, as a body that approves aid needs to be consulted. I can only guess that some internal consultations took place, but we should also remember that this was just aid suspension and not withdrawal which definitely calls for critical consultations between executive and legislature."

However Nkusi disagrees with that assertion, saying there was no way such consultations between the donors and their respective parliaments take place without information becoming public.

"First of all, world over, Parliaments conduct business in a public forum, so if there had been internal consultations between the donor countries and their parliaments on the suspension of aid to Rwanda, we would have known. I am very sure the parliaments were not consulted," asserts Nkusi.

Paris, Accra and Busan Agreements

The Paris Declaration, Accra Action Plan and Busan Agreement among other things oblige donor countries and developing countries to honor aid commitments and call for mutual respect between donors and recipient countries.

The analyst says that although the Paris, Accra and Busan Agreements don't specifically talk about aid cuts or suspension, they talk of mutual partnership, transparency and accountability of both development partners and recipient countries and the use of country systems.

Change of game

Ronald Nkusi, the Director of External Finance Unit in the Ministry of Finance and Economic Planning says there is no negative impact in the first quarter (July-September) and that government has re-adjusted its spending patterns for the suspended aid.

But he says the situation will change if the aid has not yet been unfrozen in the second quarter. He says the government will adjust and re-prioritize the programs it wants to carry out. He however says there is optimism that donors will recommit to honor the partnership principles.

Britain, one of the countries to suspend aid has already unfrozen it and Nkusi says that Rwanda did not do anything different or fulfilled any conditions for the European country to unfreeze part of its financial assistance to the Rwandan people.

"It was the UK's reading of the situation. There were no conditions that Rwanda had not fulfilled that triggered aid delaying, it was simply unilateral decisions taken by donors and the unfreezing of aid again is dependent on their own appreciation of the circumstances that in the first place made them delay or suspend aid," Nkusi further says.

He notes that he is not aware of any negotiations going on between Rwanda and the countries that suspended aid to unfreeze it.

"What we have is usual dialogue we conduct with our donors and trying to understand why aid was delayed on simply a draft report that Rwanda has repeatedly denied the contents."

However, in another surprise, the European Union (EU), one of the largest donors to Rwanda, said in a communiqué issued on Sept. 26 that "some new decisions concerning additional budget support have been put on hold."

The statement says: "In light of the current conflict in eastern Congo, the EU takes seriously the allegations contained in the report of the Group of Experts of the UNSC Sanctions Committee and needs more time to assess these allegations."

"Therefore, some new decisions concerning additional budget support have been delayed pending the clarification of Rwanda's role in the conflict and its constructive engagement in search of solutions." Efforts to get more information from EU delegation in Rwanda were futile as The Independent could not reach Schaer on his mobile phone. The statement which was emailed by Daniel Schaer, Head of the Political Section at the EU Delegation to Rwanda further said: "The EU expects Rwanda to act constructively to build a peaceful and lasting solution in the eastern DRC. By its declarations and actions, Rwanda should demonstrate its commitment to removing the threat to the people of the region from M23 and that it wants a peaceful solution in eastern DRC."

Meanwhile, the government of Rwanda has categorically denied its alleged role in supporting M23 saying that the problem was caused by the Congolese government and it should also look for solution itself.

Donors perform poorly in aid commitments

A recent report released by Action Aid on "Aid effectiveness" showed donor countries have not fully delivered aid commitments. According to the report, the aggregate score on donor countries that fulfilled their aid obligations in 2009/10 for the 14 Development Partners that took part in the assessment exercise was 59.3% and in the 2010/11 it slowed down to 57.9%.The U.S which is one of the countries that deferred aid to Rwanda was the poorest performer scoring 23.5% in 2009/10 and 13.3% in 2010/11.

Only Belgium, EU and the World Bank scored well in their official development assistance in 2010/11. The EU/European Commission scored 91%, while the World Bank and Belgium had a score of 85 and 83% respectively. Countries like Germany, Switzerland, Netherlands, and Sweden scored less than 74%.

Rwanda receivesUS$1 billion worth of aid every year and has been awarded an A rating by the Organization for Economic Co-operation and Development (OECD) for its progress towards achieving the Paris Agenda targets.

Although Rwanda has been praised for its effective use of aid, the Government was also tasked to put into consideration some recommendations which include among others: Taking a firm leadership of the development agenda and identify the areas where foreign assistance is most needed.

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