UK wants to help Rwanda overcome obstacles to growth
The UK under-secretary for international development, Shriti Vadera, was in Kigali last week on a two day visit. On the invitation of President Paul Kagame, she spoke at the opening of the development partners meeting. She also came to assess the department of foreign aid (DFID) programs.
Ms. Shriti Vadera announced a new partnership on growth with the Rwandan government. The new program, “Growth analytics program”, is expected to assist Rwanda in prioritizing strategies that will overcome constraints to growth.
“I share President Kagame’s belief that the purpose of aid is to no longer need it,” Shriti Vadera said. She said that Rwanda has the second highest growth rate in Africa, with 16% growth since 1994, and this has contributed significantly to reducing poverty.
She further said that there is a need to review the studies on Rwanda’s economy and growth prospects, so as to produce a list of priority constraints which are to be dealt with. “Proper analysis is needed to identify the constraints, to prioritize them and to develop specific plans to overcome them. This task should be a living process, not a one-off event,” Minister Shriti Vadera said.
She said that with growth come various challenges, citing the case of Rwanda’s population growth of 2% which might be an obstacle to further progress.
She further remarked that for Rwanda’s economy to grow, it is necessary for private entrepreneurs to have access to finance and skills, and adequate infrastructure as well as a good regulatory environment should be in place. She added that the government plays a crucial role in establishing such an environment.
“Innovation thrives in markets that are reasonably competitive, open to new firms, have a level playing field and little government interference,” Ms. Vadera said.
Shriti Vadera further pointed out that growth is strongly driven by new activities aimed at exports. “No country has sustained growth for a long time without export growth,” she said. She also remarked that growth should not aim at poverty reduction alone but also include other areas of progress. She warned that growth that creates imbalance between certain groups leads to stagnancy.
The UK, together with other development partners including the African Development Bank and World Bank, has agreed to review the priority list of constraints to the country’s growth, as well as to come up with solutions. The detailed review is to be tabled for discussion in January 2008.
Shriti Vadera said that the list of agreed actions should be incorporated into the governments planning and its administrative program, such as the 2009 budget and the medium-term expenditure frame work.
She also indicated that donors had focused on social expenditure, and ignored infrastructure which is a prerequisite for growth.
On Rwanda’s application to become a member of the Commonwealth, Shriti Vadera said that the UK fully supports Rwanda’s bid and that the application is being considered. According to the under-secretary, it is likely that Rwanda could join the organization in 2009.