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Bashing the IMF bailout plan without basis

[By Prince B M Kaping’a]

The other week, there was an excerpt trending on social media whereby Rwandan President, Paul Kagame, seems to pour scorn on the idea of contracting debt from Breton Woods Institutions or China.

“You cannot substitute a Chinese loan with an IMF or World Bank and sit back and say you are sorting out the mess, Africa needs to utilise its own resources, Africa needs to work hard with its resources locally, a loan will not help Africa, whether the loan is from China or the western world it is slavery,” it read.

This somehow immediately thrust PF cadres, and of course their sympathisers such as Sean Tembo who fashions himself as leader of a katemba political party Patriots for Economic Progress, into overdrive. They wasted no time sharing and re-sharing what they deemed brilliant reasoning by the Rwandese leader. However, internationally acclaimed economist, Trevor Simumba wasted no time puncturing holes in such a cheap hypothesis!

“The rhetoric of President Kagame on Aid does not match the reality on the ground! According to World Bank statistics this is the actual situation: In the case of foreign aid per capita, Rwanda’s aid per capita is US$100 against Burundi at US$39; Kenya, US$50; Tanzania, US$45; and Uganda with an aid per capita of US$47. Foreign aid as a percentage of central government expenditure in Rwanda stands at 70.9%. There are only two countries in the world with a higher percentage of donor support to central government expenditure than Rwanda. These are Malawi at 127.9% and Micronesia at 120.6%,” he argued.

He further challenged those applauding Kagame to find better examples justifying not getting aid from the IMF or indeed other development partners other than what they were offering.

In another write up that featured in the Munati TV Facebook page, Simumba observed that many people use Singapore as an example to justify not going to IMF or donors for help, but they do not know that the architect of Singapore economic miracle was a UN advisor from the Netherlands. Dr Winsemius worked closely with the founding generation of leaders – including first Prime Minister Lee Kuan Yew – to propel the economy into the big league.

The Mast newspaper further nailed it all in their editorial as follows, “foreign aid is not bad per se. It enhances international development cooperation and development. Our government administration must take advantage of and utilise such aid as international gateways, openings to harness opportunities for Zambia and Zambians. Yes, the giver may have a long-term objective to benefit from their aid. The recipient too must be strategic to exploit the benevolence to its benefit.”

What do we make of this?

While Kagame wants to play to the gallery and make us believe that foreign aid is tantamount to modern day slavery, at 70.9 per cent, his country remains one of the biggest beneficiaries surpassed only by tiny countries such as Malawi and Micronesia! If this is tantamount to slavery, how come Rwanda keeps enjoying injection of foreign aid far more than most African countries?

It is quite hilarious that those in PF, and of course their allies, are quick to dismiss the New Dawn administration’s initiative to reach out to Bretton Woods Institutions as a callous attempt without acknowledging possible advantages as adduced by The Mast newspaper.

Our country may indeed be endowed with vast natural resources that can be utilised to turn our economy around. But for this to be a reality, we definitely require a solid financial base to extract our minerals from the bowels of the earth and indeed set up industries to manufacture finished products. The same applies to the agriculture sector if we are going to witness a rebirth of factories that are going to churn out clothes from our cotton, shoes from our cattle, cheese from our milk, and starch from our cassava, among other things.

The main reason most African countries fail to put foreign aid to better use is rampant corruption and mismanagement of resources. More often than not, the money which is meant for developmental activities usually ends up in the pockets of a few individuals. In other instances, they tend to inflate the prices of contractual works so that they can share the spoils with the contractors who usually end up doing shoddy works knowing that their heads won’t roll since some senior government officials have benefitted from the loot.

As long as the new administration demonstrates stronger political will to stamp out corruption and other financial leakages, there should be no cause for worry. So far, we’ve seen the new government allowing the opposition to do its politics with any encumbrances, a vibrant civil society is slowly awakening while the media is flourishing.

What’s the meaning of this? There will be proper checks and balances in place, unlike what was the case in the previous regime.

The author is a political and social analyst. Send comment to: office@beautifulgate.org.

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