How will the global financial crisis affect Rwanda?

Amidst the raging global economic crisis, many developing countries, a majority from Africa, are afraid that the aid they receive from Western donors will be cut. The former United Nations Secretary General, Kofi Annan speaking at the recently concluded World Food Day, said about 10,000 children in the third world countries are poised to die of malnutrition each day. He added that the financial crisis deserves urgent attention and focus, but so does the question of hunger, “millions are liable to die, is that any less urgent?” asked Annan. Annan expressed worries that donors might take eyes off African poverty and cut aid, giving the global economic crisis as a reason. These worries were further projected by the African Union President Jakaya Kikwete, when he expressed concern that the global financial crisis may curtail foreign aid to Africa. Major financial stakeholders in Rwanda, bankers, insurance companies and representatives from the stock market, presided over by the Minister of Finance, Tuesday calmed fears about the possibility of Rwanda’s economy being affected by the on going global financial crisis. The Minister of Finance and Economic Planning, James Musoni said that the Rwandan economy is not yet affected by this global financial meltdown but expects it could in the long run, depending on how the developed world manages the crisis. In order to control the possible impact of the ongoing global financial crisis on the Rwandan economy, the government has appointed a committee to monitor the financial trends. When Sunday Times talked to some of the leading aid providers in Rwanda, they expressed willingness to continue their support and honor their commitments. The UK Department for International Development (DFID) said it is still too early to detect whether the global economic crisis will affect their financial commitments. But that “DFID is committed to honouring its commitments to Rwanda and that’s exactly what it will do,” underscored Sandra Pepera, head of DFID in Rwanda. Fred Bahati, an official from Compassion Rwanda, one of the NGO’s that gets funding from the West, revealed in a telephone interview last week that there is no significant reduction in the support as a result of the ongoing financial crisis. Dennis Weller, the USAID Rwanda Director, said the current financial crisis in the United States will not in any way affect USAID’s financial assistance to Rwanda. “The U.S. Government is a strong partner with the Government of Rwanda and remains committed to support its efforts to address the priorities defined in the 2008-2012 Economic Development and Poverty Reduction Strategy and to achieve the Millennium Development Goals,” explained Weller. He noted that there is no anticipation that the financial crisis in the U.S. will have a major impact on USAID assistance to Rwanda in 2009 but that decisions on spending priorities beyond 2009 will be in the hands of the next Congress and Administration. During her visit to Rwanda, the United States Secretary for Education, Margaret Spelling,s emphasised her country’s willingness to continue supporting education in Rwanda. Rwanda’s finance minister further cleared the air on whether aid will be cut, when he declared that there is no significant indicator that aid will be cut, given the fact that financial aid that goes to the developing countries constitutes a very small margin on the donor budgets, which cannot raise hairs on their bodies. In the recent G 8 summit in Washington DC, it was decided that donors of developing countries honor their financial commitments. Ends