The ancient Roman poet Quintius Horatius Flaccus aka Horace said “Adversity reveals genius, prosperity conceals it.” It is thought that this could be the source of the popular saying that “Adversity is the mother of invention.” Both quotations are supposed to be truisms, born out of observation of basic human behaviour. Problems or difficulties are supposed to spur us onto creating inventive solutions. But sometimes I wonder whether this is true in Africa.
A cyber friend of mine, that is somebody I have had extensive e-mail correspondence with but have never met in person, once made an interesting observation in the middle of a discussion about the state and relevance of Uganda’s education system. Commenting about the lack of research in our universities, he said that with the high prevalence of potholes in Ugandan roads over the last 45 years, he would have expected the Faculty of Civil Engineering at Makerere University to have come up with a new unique and cheap solution to the sealing of roads. He added that with the prevalence of war in the country over the same period, he would have expected the same Faculty to have opened up research into the technology of war and come up with some cheap and indigenous solutions to the problems faced in waging war. So why, he asked, does our education system not encourage our people to come up with more local solutions to the problems that they face? Put another way, why does adversity fail to reveal African genius?
But as Mark Twain observed, all generalizations are false. I am sure readers are jumping up and down bursting with examples of African inventions, from the simple to the hi-tech, that have been made to cater to our basic problems. I agree, we have regular flashes of brilliance but we still fall short of a steady beam of genius.
In my view, part of the problem has been and remains the dependence syndrome that stems from so-called “donor aid.”Aid has its well learned critics like Zambian-born economist Dambisa Moyo, the famous NYU professor, William Easterly, or my dear (real life) friend and leading social entrepreneur Andrew Magezi Rugasira , who ably shows its social and economic shortcomings with facts and figures born out of meticulous research. Andrew Mwenda has also written extensively on how foreign donor aid creates negative incentives to social, economic and political progress. In a nutshell, what these eminent critics are saying is variations on Horace’s truism. They are saying that aid creates false prosperity and that false prosperity is concealing Africa’s genius. I agree with them.
Many governments across Africa have been working to reduce dependence on aid. Text book economics dictates that this should be done by growing the economy so as to widen the tax base from which governments can draw more tax income and reduce their reliance on foreign aid. But in many countries, the reduction of aid dependence has been slow and to certain extent the donor countries have also not been active in encouraging a reduction of aid dependence because of the practical political leverage that aid gives them over African governments.
It is with this background in mind that I have been observing Rwanda’s reaction to the cutting or withholding of donor aid over the conflict in the Eastern DRC with some interest. In the absence of a lab where political and economic experiments can be carried out in a sterile environment, we must look around at what is going on in countries around us to see what lessons, if any, can be learned.
Apparently, Rwanda receives about Rwf. 252.3 Billion (approx. US $390 Million) from foreign donors in budget support. This represents about 46.2% of Rwanda’s total budget. Following the international furor over Rwanda’s alleged involvement in fomenting conflict in the Eastern DRC, an accusation that the Government of Rwanda vehemently denies, several Western donor countries have suspended aid to Rwanda, causing a threat of a 24% budgetary shortfall (representing approximately US $187 million).
Faced with the threat of adversity, Rwanda came up with a unique invention, the Agaciro Development Fund , a “solidarity fund based on voluntary donations”, which will be reflected in the National Budget, meaning that it is not a private fund, and which will be managed by the Ministry of Finance and Economic Planning. The fund was launched in August 2012 and in close to four months, Rwandans at home and abroad have raised more than US $40 million. It is proposed to continue to grow the fund by seeking voluntary contributions as well as investments in the future.
The Fund may not be able to meet the budgetary shortfall and will almost certainly have to be accompanied by cutting non-priority expenditure as well as increasing domestic borrowing (issuing of Treasury Bills). But there is no denying that this is a highly inventive solution to the problem that Rwanda and other African countries face. It draws upon a common social trend in this part of the world (we fundraise for everything from graduation parties to churches) but adds a twist of making the citizens more involved in raising the national budget on a voluntary basis (taxes are raised on pain of penalties). It also creates an incentive for the government to be more accountable to its citizens for its expenditure and priorities. You can bet that no one will donate any money to a system that they know to be prone to corruption and wasteful expenditure. In effect the Agaciro Development Fund will turn the people of Rwanda into the “Donors” and they will, in theory, be able to call the tune by reason of paying the piper.
Let’s watch and learn.