Rwanda on track to reduce aid dependency-Economist
As Rwanda prepares to host the second Growth Forum today, economists are optimistic that the policies geared towards ushering the country into a middle income economy will help trim down aid dependency, which is seen as a development cancer to many African states.
Richard S Newfarmer, the International Growth Centre Country Director for Rwanda noted that the country has used development assistance very effectively, which has in turn helped in crafting policies that have paved way for the country’s shift to using its own resources in financing development and growth.
“But as Rwanda moves towards becoming a middle income country, it will attract new reforms of investment and generate new exports that will gradually replace reliance on aid,” he told Business Times in an exclusive interview yesterday.
He says that increasing exports, maintenance of high growth and intensified efforts to disseminate technology to increase agricultural production, where government has scored high will help the country
to scale down on aid dependency.
“Even as government reduces dependency in the next five to eight years, in the meantime, it is important that it invests these resources wisely,” he asserted.
Newfarmer further added that because of these policies, there has been a rapid increase in incomes for all Rwandans, creation of jobs, and increase in standards of living seen as critical indicators for middle income countries.
According to Nelson Tugume, the CEO of Inspire Africa, reforms in doing business and efforts to promote the private sector will help the country to cut down foreign aid that is needed for African countries to take charge of their development.
Moreover, the government through its Economic Development and Poverty Reduction Strategy (EDPRS) provides a medium term framework for achieving the country’s long term development aspirations as embodied in Rwanda Vision 2020.
The International Growth Centre is a Department for International Development (DFID) – financed joint venture of the London School of Economics and Oxford University whose activities are in support of
government programmes focusing on trade diversification, agriculture, infrastructure and Finance.
The forum will feature world renowned economists Prof. Paul Collier and Prof. Richard Hausmann who are expected to share views of overcoming aid dependency in Rwanda through sustained economic growth and export dynamism.
Newfarmer added that discussions on how the East African Community common external tariff is affecting Rwanda consumers and firms, review on Rwanda’s export performance in the past decade and suggesting ways forward to improve them and the role of land titling and credit agricultural productivity are key topics at the forum.
Dias Nyesiga, The New Times