UK’s “Volatile” Aid Policy to Rwanda

After suspending aid to Rwanda for the second time in 2012, UK’s Department of International Development (DfID) controversially restored its aid package in early March.

UK’s aid to Rwanda was said to be “funding a dictator” by a former aide to the President of Rwanda.

Tracing back to UK’s first halt on the Rwanda-destined aid in last July, it’s clear that DfID’s aid policy to Rwanda can be inconsistent. The first halt was announced due to an interim UN report that unveiled Rwanda’s military involvement in the DRC conflict, according to the Guardian. Contentiously, DfID resumed the aid, claiming that Rwanda was shown to have ended its support of rebels in DRC. Roughly two months later, the new DfID Secretary, Justine Greening made the decision of suspension again because of the international criticism and subsequent evidence from the UN. But now, DfID presents the world with a “reprogrammed” aid plan to the same Rwandan government.

Based on Greening’s statement on March 1st and the Guardian’s report, UK’s “reprogrammed” funding enjoys the following “advantages” that target on the needy Rwandans directly while bypassing the Rwandan government:

Even though DfID’s restructured aid is said to aim at the poor population in Rwanda, it is indeed constrained by several shortcomings related to the aid’s definition and enforceability.

Because it’s not the general budget support, theoretically it will not be  restrained by UK’s aid partnership principles, which generally refer to the aid usage requirements of poverty reduction and MDGs; human rights; governance and financial management; and accountability to citizens. So, is it a sector budget support that will contribute specifically to the poverty-reducing sectors? According to the Guardian, a recent DfID  summary report indicates that the aid is defined as the “financial aid and technical co-operation” but not concretely as the sector budget support. In other words, the funds can technically be applied to the sectors that are not necessarily related to the poverty reduction.

In addition, it seems that the UK has been distributing aid to VUP since 2008 based on the DfID’s project information on its website. The information shows that the funding is attached to “special conditionality”, though it has not been identified clearly. If it refers to the “conditionality” mentioned in the DfID’s glossary section, it is somewhat equivalent to the partnership principles for the general budget support. But undoubtedly, the real meaning of the “financial aid and technical cooperation” to Rwanda is left for DfID to explain.

The second issue is how the UK will ensure this “cash” aid could reach the poor through the local partners and organizations rather than governmental agencies?

From one aspect, VUP — the major aid distribution channel, is said to be a “collaboration” between the Rwandan government, private sector and nonprofits under the supervision of the Ministry of Local Government. The funds will be allocated to different bank accounts and audited separately as mentioned before. Moreover, the UK seemingly has a clear strategy to prevent the misuse of aid and corruption in Rwanda. “DFID’s Anti-Corruption Strategy for Rwanda”, a report published by the DfID in Jan, 2013 reiterates that the corruption scenarios in Rwanda have largely decreased in recent years. DfID makes efforts to preserve the integrity of its aid in Rwanda via multifaceted precautions including “risk assessments”, “internal and external audits”, “risk management” and regularly updating information of aid partners’ fund usage on its website.

From another aspect, VUP is often criticized for its strong government control. Stephen Devereux, a research fellow at the Institute of Development Studies who used to conduct assessment for DfID on the VUP programmes commented that in VUP, most decisions are made by the government regardless of what private and nonprofit partners want to do.

Questions arise over hos DfID will help Rwanda’s poor and simultaneously draw a clear line between itself and the Rwandan government, since this affects UK’s credibility as a global aid donor. Therefore, DfID can first clarify what it means by “foreign aid to the government” and explain the ad hoc restrictions and principles attached to the aid distribution and utilization.

In the meantime, it’s indispensable for DfID to consider other funding routes. Before its announcement of this “reprogrammed” aid, 44% DfID’s funding to Rwanda was sent directly to the Rwandan government as the general budget support and 36% distributed through government-associated channels, while only 13% was directed towards NGOs or other non-governmental channels. Although it’s unclear how much funds will be granted to which sectors in the new aid package, we know that the major channel will be VUP, which is also a government-owned program.

Chaotic: The study found teachers were allowing children were left to play football instead of attending classes. (File picture)
UK’s waste of aid in Nigeria where teachers left children to play in class time.

On the other hand, it’s worth mentioning that besides Rwanda, UK has encountered many aid policy challenges in Africa recently. In Nov. 2012, its Uganda-directed aid was suspended because the funds were reported to be transferred to the Ugandan Prime Minister’s private account. Before the Ugandan aid chaos, DfID’s subsidiary private investment enterprise, CDC Group, was accused of investing in the money laundering companies related to James Ibori, a notorious Nigerian money-launderer.  Concerning these adverse impacts on UK’s donor credibility and the previous “up-and-downs” in Rwanda, DfID may need to be more cautious about its aid structuring and enforcement.

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