Government of Rwanda Seeks ECA Counsel

By Carolyn Knapp, Communication Officer, ECA
12 November 2003

What more could the team responsible for the Economic Report on Africa (ERA) 2003 hope for than a Minister of Finance taking personal interest in his country’s case study findings and assembling a team of very influential players to discuss the way forward? In the case of Rwanda, the Minister felt that ECA’s Economic and Social Policy Division (ESPD) had really taken the pulse of the country’s economic circumstances—citing all the key policy issues and making relevant and useful recommendations. The potential for continued dialogue and linkages makes this a real success story for the team. In the world of advocacy, this opportunity is akin to catching the brass ring.

With stellar cooperation from M. Mbaye Diouf, ECA’s head of the East Africa Sub-Regional Office in Kigali, a meeting was set up in late October for Director Patrick Asea, ERA Team Leader Shamika Sirimanne, and Rwanda country Economist Niall Kishtainy to brief not only the Minister, but the Secretary General and the Director of Macroeconomics in the Ministry, Minister of Education, Advisor to the President for Economic Affairs, Governor of the Central Bank, Director General of the Development Bank, and European Union, UNDP, World Bank and IMF Country Representatives, plus other key decision makers in economic and social institutions in Rwanda and every significant donor in town.  Both Mr. Kishtainy and Ms. Sirimanne were “very impressed by the high caliber and commitment of the Rwandan policymakers.” Niall remarked that “tremendous institution building has occurred since 1994.”

Mr. Asea also assisted in preparing the Minister for his imminent trip to Washington to join the Executive-Secretary Mr. K.Y. Amoako and Principal Advisor Elene Makonnen at the special session of the “Big Table” focusing on how the policies and practices of the Bretton Woods institutions can best contribute to Africa’s efforts to meeting the Millennium Development Goals. The Big Table is a candid forum for a small group of African Ministers of Finance to gather with their OECD counterparts from Development Cooperation Ministries to build consensus on ways to best deal with current challenges. Lessons from Rwanda are very relevant to the current debates about the need to tailor debt sustainability targets as defined under highly indebted poor country (HIPC) status for countries emerging from conflict.

ESPD contact with the government began with Mr. Kishtainy’s exploratory data-gathering mission to meet with the Ministry of Finance, other Ministries (i.e., Education, Health, Commerce and Industry, and Local Government), the Privatization Secretariat, Private Sector Federation and donors. Rwanda was selected to highlight this year’s ERA theme of “Accelerating the Pace of Development.” The division sought to illustrate the basic problems associated with accelerating reforms—and in this case, after genocide had virtually destroyed the social and economic landscape.

In 2002, the country’s growth rate was a robust 10% with low inflation of 2%. Nevertheless, per capita GDP has not returned to pre-war levels, and growth was principally in the agricultural sector, prone to climatic fluctuations. Recent spending on social reconstruction and agricultural modernization, as well as a host of demobilization and reintegration requirements and higher than expected election-related expenses, has led to a mounting fiscal deficit. A fundamental tension exists between the urgent need for post-conflict spending and the requirements for macroeconomic stability. In essence, massive spending to solidify social and political stability and reconciliation are critical for future economic growth. The two forces cannot be divorced.

Mr. Diouf is committed to maintaining momentum and continuing to facilitate ESPD consultations throughout East Africa.