By EDMUND KAGIRE The EastAfrican

Posted Saturday, December 8 2012 at 19:03

As the government assured citizens that major programmes would not be affected by donors’ decision to withhold chunks of aid, it was focusing on weaning itself off dependence on them.

The Rwanda government will cut spending in some areas and revise its budget as it comes to terms with shrinking funding after key donors withheld aid over claims the country is supporting M23 rebels in eastern DRC.

As the government assured citizens that major programmes would not be affected by donors’ decision to withhold chunks of aid, it was focusing on weaning itself off dependence on them.

One option is the Agaciro Development Fund — a solidarity fund contributed to by Rwandans within and outside the country, which has so far raised Rwf30 billion ($47.5 million).

According to Finance minister John Rwangombwa, the government will prioritise spending, but avoid resorting to job cuts or tax increases to fill the gap.

“We are not looking at that money anymore; we are now revising the budget, which will be presented to parliament in January,” Mr Rwangombwa said. “We hope to cut down on spending if these funds from our bilateral cooperation don’t come through.”

Rwanda has now written to the partners who suspended aid, expressing its frustration and concern over the breached Paris Declaration and other laws that govern how aid partnership agreements should be handled.

The Minister said the bulk of the money promised by development partners this fiscal year had already been disbursed at the time details of the United Nations Group of Experts report — that accuses Rwanda of supporting the rebels in DRC — was leaked to the media in June. Rwanda has denied the allegations.

Countries which suspended aid to Rwanda include Germany, the UK, the Netherlands and the US. The accusations also affected an expected dispatch of crucial funds from the African Development Bank.

“We expected about $40 million as general budget support but that was delayed, although the bank had already dispatched sector support funds amounting to $13.4 million meant for the agriculture sector,” the minister said.

The UK had promised $80 million in general budget support, out of which $44 million had been released, while the EU had already dispatched all the funds it had promised.

Germany withheld $9.3 million and the US, which was for the first time going to channel money through general budget support, $12 million. The US usually channels its support through projects.

Like the AfDB, the World Bank is also still withholding $125 million for the current financial year. Both institutions, according to Mr Rwangombwa, acted upon pressure from donors and shareholders.

Belgium has also suspended an unspecified amount in aid to Rwanda, which was supposed to be dispatched at the end of the year.

“In total, Rwanda was expecting $362 million from donors in general and sector budget support and of that we had received $122 million while $240 million is yet to be released,” he revealed.