East Africa-Economy: Nations can finance own budgets
Tag: Africa-Economy, Africa-Economy Nations
Summary: Two weeks ago, we saw a new phenomenon in Rwanda, a country that has developed the habit of pioneering in many areas of development.
Two weeks ago, we saw a new phenomenon in Rwanda, a country that has developed the habit of pioneering in many areas of development.
This time, the country called on her own resources, meager as they may be, compared to her larger neighbours, to handle her own budget. Last week, only two weeks after it started it's 'Agaciiro' (Kinyarwanda for Dignity or self worth).
Rwanda has raised over US$ 3 million towards it's annual budget of $2.32 billion. Admittedly, this is a small sum, but considering that this sum was raised from it's own willing people is remarkable, to say the least.
Of course, this comes in the wake of the western world getting cold feet towards donating money towards Rwanda's budget as a result of allegations that the M23 rebels in the Congo DRC are being supported by Rwanda. This is a charge Rwanda has repeatedly denied.
For a long time, Africa's budgets have been subsidized by the West in terms of aid and loans. This has actually seen Africa growing in dependency and unless this trend is reversed, Africa will quickly slide into a form of slavery where the western world will dictate terms in a carrot and stick strategy.
For a long time, Kenya has been able to support their own budget, in spite of a massive withdrawal of aid from her donor partners.
She has been able to do this on the strength of a robust industrial expansion, agricultural push and tourism to finance her growing budget with less dependence on the west.
One of the other things the East African Community (EAC) countries have done is to look to the East for development and trade partners. China has jumped in very fast and we are currently getting huge sums of money in trade and development assistance from China.
Uganda and Tanzania have vast reserves of oil and gas and the funds from this can be used to finance the budgets of these two countries in a bid to stop the dependency syndrome.
Rwanda may not have many resources, but she now has 'Agaciiro' and a burgeoning tourism sector.
This, together with her commitment to disciplined expenditure and development strategies, ought to take her a long way towards budgetary independence.
This move towards budgetary independence can be greatly enhanced by the fast tracking of economic integration of the EAC countries so that the cost of doing business in the region is reduced considerably and economies of scale are realized.
This way, the region can do collective bargaining thus raising the income from exports and the quantity and quality of imports.