| Dar, Kigali earn top marks in use of aid | Send to a friend |
| Tuesday, 27 September 2011 22:21 |
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Dar es Salaam. Tanzania and Rwanda have topped a global survey meant to determine how well foreign aid is used by recipients.The two countries excelled in the survey conducted by the Organisation for Economic Cooperation and Development (OECD) in 78 countries and territories that get most of the aid. The findings released last Friday in Paris give Rwanda and Tanzania an ‘A’ rating, which is the highest score. Rwanda got top marks from its development partners for “owning its development process by initiating its own policies, then asking the donor community to fund them”. “Rwanda has adopted a national capacity development strategy and action plan, and put in place institutional arrangements for an operational approach with political leadership,” the report said. In 2006, Rwanda asked donors to channel all their financial assistance through the country’s budget. The United States is the only donor that is still adamant to trust the Rwandan government with its money. Britain is Rwanda’s largest bilateral donor – putting most of its aid in the budget, and allowing the government to spend the funds as it wishes. Like Rwanda, Tanzania is also heavily dependent on donors.General Budget Support partners gave Tanzania a total of $531 million in the 2010/11 financial year, representing 6.4 per cent of the government’s budget.That amount was, however, $220 million less than what the country received from GBS partners for the 2009/10 budget. Tanzania gets GBS from 11 bilateral and three multilateral development partners, namely the African Development Bank, Canada, Denmark, the European Commission, Finland, Germany, Ireland, Japan, Norway, the Netherlands, Sweden, Switzerland, the United Kingdom, and the World Bank. The group is led by a troika (the chair, the incoming chair and the outgoing chair), which rotates every year. Norway is the chair for 2010/11, while the incoming chair is represented by the European Commission and the outgoing chair is represented by The African Development Bank. The country, however, gets additional donor support through grants and development project loans. For instance, during the 2010/11 budget, while GBS partners brought in $531 million (about Sh821 billion), the money that the country received through grants and development project loans was worth Sh2.5 trillion. In the same vein, donors are expected to fund a reasonable chunk of the government’s Sh13.5trillion budget for 2011/12. The government anticipates to receive grants and concessional loans amounting to Sh3.924 trillion. Out of the amount to be received in 2011/12, Sh869.4 billion will be for GBS while Sh3.054trillion will be grants and loans for development projects and programs including Basket Funds. Donor and developing countries signed up to the Paris Declaration on Aid Effectiveness in 2005. All parties to this ‘aid compact’ agreed that to lift more people out of poverty, developing countries must plan and manage their own paths to progress. Donors voiced their commitment to working with each other and with developing countries. The OECD survey was investigating whether each side has kept their commitments. The findings show that some donors are already allocating large proportions of their aid through developing countries’ financial systems: Ireland (80 per cent), France (69 per cent) and the UK (68 per cent), for example. Others, such as Turkey (0 per cent), Portugal (2 per cent), and Luxembourg (4 per cent) allocate next to nothing; Korea (10 per cent) and the United States (11 per cent) also lag behind. The Survey notes that some donors still tie aid – imposing restrictions on where goods and services must be bought or contracted, often in the donor country, instead of allowing the developing country to choose the best offer at the best price.Tied aid increases the cost of development projects by 20 to 30 per cent reducing value for money, say the researchers. Add this page to your favorite Social Bookmarking websites           |
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