On December 18, 2008, Rwanda’s President Paul Kagame said his country should start thinking differently on the aid they get from developed countries.

“The people of Rwanda should be ready to survive under any circumstances including that of less aid.” Kagame said adding that this is not good.

Foreign aid makes 50 per cent of Rwanda’s national budget. Kagame has continuously urged Rwandans to work hard to stop relying on foreign aid. Kagame’s forceful statements against aid, come at the backdrop of the Dutch government announcement that it had withdrawn financial aid to Rwanda.

The Dutch said they were taking the decision based on the UN report released in December accusing Rwanda of supporting the conflict in eastern DRC, which Rwanda has strongly contested. Rwanda took the advantage of such a move to announce how it considers foreign support.

President Kagame said, “It gives me an opportunity to say that we really need to work hard to move out of this reliance on aid.”

Rwanda has been depending on aid since colonialism. But the level of dependency shot up during late Juvenal Habyarimana’s regime. “Aid is bad as it is. It is something they will give you when they want and take away when they don’t want to give it to you,” Kagame said. Aid, according to Kagame made the country become vulnerable, politically, socially and was economically injured. Exportation of coffee, the only source of revenue by then, fell to almost zero.

Dr David Himbara, head of Strategy and Policy in the president’s office and Kagame’s close aid told The Independent that, Rwanda faced all this because the previous regime depended on begging money from developed countries.

With this kind of situation, Dr Himbara adds, “another country determines your fate.”  In simple terms this is what Kagame defined recently.

He said, “You see, one morning, the one giving aid will wake up and say I don’t like the face of Kagame; he has the face that is not worth aid. And for that simple reason, put it off the table.”

President Kagame says this kind of situation does not sustain growth and social development of the people.

Does Rwanda still need the donor money or not? Dr Himbara contends: “While we accept this support, we accept it temporarily, but it is politically risky.”

Himbara says, Rwanda is building a strong private sector that will succeed in business and this is what others have done around the globe.

“Leave Rwanda for the time being and look at other developing countries, they have and are building a strong private sector that will create wealth and also employ thousands of people.” 

Like others, Rwanda is pursuing two major things; good business environment and improved laws that will see the reduction of the cost of doing business.

“We are making an efficient government that promotes business and supports the private sector,” Himbara said.

 On top of that, Rwanda is tackling the bureaucracy of registering investors.

Instead of taking months like it used to be, it now takes only a few days for investors to be registered. In some cases it takes just hours, not days.

In an effort to achieve this, all government agencies; tourism, ITC, export and import promotion, human development have been merged into one. This, Himbara says, helps people get everything they require in starting a business in one day from one place.

The foreign affairs minister, Rosemary Museminali, was quoted in The New Times, a local daily, saying that Rwanda is focusing on improving business relations with European countries and minimising the country’s dependency on their aid.

“Relations between Europe and Rwanda have been largely based on aid and we wonder if such a relation based on support should continue…we need to build stronger business relations,” Museminali was quoted as saying. While addressing a two-day National Dialogue Summit late last month, President Kagame demanded that all government departments change course of operation. Support is being considered to reinforce the performance of all institutions. The Rwanda revenue authority is now able to collect up to 12 per cent tax annually, which is now more that 50 per cent of the national budget.

The tourism hit a 54 per cent growth in 2008, generating about $214 million, $17 million more than what was raised in 2007 from coffee and tea which make Rwanda’s major export revenues.

Recently on a local radio talk show, a listener called in and suggested that every Rwandan should contribute 100 Rwandan Francs every month.

Which means, if at least 5 million people are able to do that, the national treasury would get 72 billion Rwandan Francs a year, more than 10 per cent of the national budget.

Kagame says mobilising people is what will slowly enable the country to move away from relying on handouts.

Since 2000, Dr Himbara said, Rwanda has cut budgetary support from aid by 50 per cent. He is optimistic that if Rwanda maintains this pace, at one time Rwandans will stop begging or living on what Kagame calls “handouts.”

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