23 January 2013

Rwanda: MPs, Donors Meet Over Budget Review

In a routine session with donor representatives, the Chamber of Deputies' standing committee on National Budget and Patrimony yesterday voiced concerns over "perplexing" decisions to freeze aid to Rwanda.

'The current situation, from the AfDB point of view, is very challenging. Something needs to be done, because if the current situation continues, Rwanda's development programmes will be jeopardised.'

Negatu Makonnen:

During the 16th Joint Budget Support Review (JBSR) briefing, MPs told donor representatives that the aid cuts are not only questionable, but also disturbing.

MPs said they appreciated donor support to Rwanda, especially in the 2011/12 budget, but expressed dissatisfaction with the freezing of aid over what they described as unfounded allegations that Rwanda supports the Congolese M23 rebels.

The Netherlands, Germany, Sweden, the UK, and the US suspended an estimated $240m (about Rwf152b) in budget support to Rwanda, forcing government into reviewing its 2012/2013 budget, after losing 12 per cent of planned expenditure.

Parliament no happy:

During the meeting which lasted nearly three hours, MP Abbas Mukama, the deputy chairperson of the committee, told donor representatives from the Netherlands, Germany, the UK, and others present, that the DR Congo conflict should not be blamed on Rwanda, or be linked to Rwanda's development support.

MP Mukama said the committee recently concluded a countrywide assessment of the executive's budget implementation "but what hurt us most is the realisation that there are many budget allocations that were cut because donors' earlier engagements were abruptly halted."

"After appreciating the fact that our country efficiently and effectively uses aid money, you went ahead to freeze aid without even consulting us," Mukama said, as he asked donor representatives to explain their countries' near future engagements, especially in Rwanda's 2013/14 budget.

Mike Hammond, the Country Director of UK's Department for International Development, who headed the donor delegation, said looking forward, "we remain committed to helping Rwanda's development progress."

However, he said donors are under pressure from their own parliaments to account for overseas development aid.

"The issues that we face around, particularly budget support, are well-documented. And most bilateral donors have made their positions clear to the government and we continue to discuss the way forward," Hammond said.

MPs Connie Bwiza Sekamana and Faith Mukakalisa were equally explicit in their condemnation of donor actions. Bwiza said Rwanda has "always justified beyond doubt" where every aid penny goes.

"It is unfortunate that the socio-economic aspect is directly ingrained in politics," Bwiza said, stating that linking budget support to the insecurity of a neighbouring country is off the mark.

Breach of agreement:

The MPs also questioned a trend which suggests that development partners are breaching earlier aid agreements.

Jolke Oppewal, the head of Development Cooperation in the Netherlands Embassy, said his country's decision was influenced by the UN report on DRC, but clarified that some development commitments with Rwanda such as electricity access, continue.

Oppewal said, "Our Parliament has become ever more critical of budget support. This is nothing to do with Rwanda. In December, our Parliament adopted a motion and they want our government to reduce budget support and advocate the same for other donors."

AfDB's stand:

However, the African Development Bank (AfDB) country representative, Negatu Makonnen, sees things differently.

Makonnen said AfDB's stand on budget support has not changed as they still believe budget is "the way to go if we are to effectively support the development aspirations of our partner countries."

Currently, the AfDB's only outstanding challenge is that the last bit of the budget support ($40m) that was planned to be disbursed in July-August is still on hold as shareholders negotiate, he said.

The World Bank Country Representative, Carolyn Turk, refrained from saying much in the session attended by journalists.

"We are in close consultations with our shareholders at the moment to see how we can move forward with our delayed budget support. I have briefed the Minister for Finance," Turk said.

President Paul Kagame on Monday told journalists that the biggest challenge for Rwanda, this year, is to be self-reliant. Kagame said government will do its best to achieve this goal.

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