In this column last week I pointed to the need for us to understand what is really meant when our officials tell us that this or that programme failed or underperformed due to what they consider to be the "Charity Mindset” of Rwandans. I noted that if the intention is to avert loss of public resources or to initiate corrective action, understanding of what they really mean is crucial. Otherwise, use of the term is likely to be interpreted as an excuse rather than an explanation. 

I return to the dismal performance of the Hanga Umurimo programme for illustration. I use it as a reference case because of the importance the country attaches to employment creation as a strategy for poverty reduction, in particular, and socioeconomic transformation in general.

Here are the facts. The actors involved in the initiative were the Ministry of Trade and Industry, the Business Development Fund, popularly known by its acronym BDF, commercial banks, and the beneficiaries, otherwise referred to as "entrepreneurs.”

Further, the government backed up loans to the programme worth Rwf2.2 billion. Of this, 168 beneficiaries pocketed an average of 13 million each, of which the intention was to "Start Small, Grow Big,” in a business sense.  

At least 50 of these beneficiaries are in default. Banks consider their loans "unrecoverable,” which means that the government, as guarantor, must now cut a check worth about Rwf600 million, representing the 30 per cent default rate. Six hundred million francs is no little money. Moreover, that some of the defaulters had the money "diverted into fancy expenditures” doesn’t help matters. 

Let’s consider the explanations. The official in charge at the Ministry of Trade and Industry noted the success of the programme, insisting that it is "promising to see that entrepreneurship culture is really rising among Rwandans.”

A senior BDF official saw things differently, linking the failure of the programme to other similarly constituted initiatives where a "charity mindset” is threatening the "whole idea of BDF.”

The situation before us, therefore, is where two key officials of a programme consider the same set of facts while reaching diametrically opposed interpretations and conclusions. Something is amiss, surely.

What is clear is that explaining failure using an abstract idea such as a "charity mentality” may be useful for both officials in terms of self-preservation. It is disingenuous and escapist, however.

Aversion to account for, and to take responsibility over, unfavourable outcomes through attempts to obscure reality is a human condition. We all do it. For our illustration, with such a large amount of money lost or misdirected, there’s going to be a temptation to shun responsibility. Under such circumstances, it would require a certain level of integrity for one to stand up and be counted.

However, doing something just because others do it is not a strong defence. If treated as an isolated case, there would be little reason for concern.

The fear is that persistence of such logic risks breeding a culture of arrogating success in, and seeking undue recognition of, outcomes in which our genuine contribution is negligible, while placing blame for unfavourable outcomes on the shoulders of others.

By defining the problem as due to a charity mentality, officials sought to place responsibility for the dismal performance of the programme wholly on the shoulders of the beneficiaries.

Proper apportionment, however, would reveal the culpability of all concerned. Clearly, the ministry did a poor job of targeting beneficiaries. It didn’t carry out its due diligence in terms of follow-up after the loans had been disbursed to ensure that projects were up and running; it also neglected establishing a monitoring, evaluation, and coordination system that linked the key actors: the ministry to the beneficiaries, BDF, and the banks.

Moreover, regular visits to businesses were needed to ascertain the risks involved at each step, which could potentially have produced corrective course or a decision to accept sunk costs early on to ensure some form of financial recovery.

On the part of BDF, mechanisms to screen pre-approved beneficiaries could have raised red flags and averted some dangers. As with the ministry, due diligence called for some follow-up after the money had been disbursed.

I don’t mean to imply that beneficiaries are blameless. They exploited weaknesses in a system designed to help them. Without their own collateral, however, their conduct can also be justified using similar blame-shifting logic as that invoked by the officials.  

It turns out, therefore, that the ‘charity mindset’ is a subculture of moral poverty that cannot be ascribed to the beneficiaries alone. Ultimately it is a question of accountability, which identifies what has gone wrong as a means of identifying strategies for corrective action.

Once we recognise this, it is unlikely that our officials will continue providing us with excuses instead of explanations in circumstances where they have fallen short of desired outcomes. Most importantly, we shall recognise that the difference is not insignificant.