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Alba Iulia
Tuesday, October 12, 2021

Of bashing the IMF bailout plan without basis

Columns Of bashing the IMF bailout plan without basis

By Prince Bill M. Kaping’a Political/Social Analyst

The other week, there was an excerpt trending on Social Media whereby Rwandan President, Paul Kagame, seems to pour scorn on the idea of contracting debt from Breton Wood Institutions or China.

“You cannot substitute a Chinese loan with an IMF or World Bank and sit back and say you are sorting out the mess, Africa needs to utilize its own resources, Africa needs to work hard with its resources locally, a loan will not help Africa, whether the loan is from China or the western world it is slavery,” it read.

This somehow immediately thrust PF cadres, and of course their sympathizers such as Sean Tembo who fashions himself as leader of a katemba political party PEP, into overdrive. They wasted no time sharing and re-sharing what they deemed brilliant reasoning by the Rwandese leader.

However, internationally acclaimed economist, Trevor Simumba wasted no time puncturing holes in such a cheap hypothesis!

“The rhetoric of President Kagame on Aid does not match the reality on the ground!
According to World Bank statistics this is the actual situation: In the case of foreign aid per capita, Rwanda’s aid per capita is US$100 against Burundi at US$39; Kenya, US$50; Tanzania, US$45; and Uganda with an aid per capita of US$47. Foreign aid as a percentage of central government expenditure in Rwanda stands at 70.9%. There are only two countries in the world with a higher percentage of donor support to central government expenditure than Rwanda. These are Malawi at 127.9% and Micronesia at 120.6%,” he argued.

He further challenged those applauding Kagame to find better examples justifying not getting aid from the IMF or indeed other development partners other than what they were offering.

In another write up that featured in the Munati TV Facebook page, Simumba observed that many people use Singapore as an example to justify not going to IMF or donors for help, but they do not know that the architect of Singapore economic miracle was a UN advisor from the Netherlands. Dr. Winsemius worked closely with the founding generation of leaders to – including first Prime Minister Lee Kuan Yew – to propel the economy into the big league.

The Mast Newspaper further nailed it all in their editorial as follows, “foreign aid is not bad per se. It enhances international development cooperation and development. Our government administration must take advantage of and utilize such aid as international gateways, openings to harness opportunities[U1] for Zambia and Zambians. Yes, the giver may have a long term objective to benefit from their aid. The recipient too must be strategic to exploit the benevolence to its benefit.”

What do we make of this?

While Kagame wants to play to the gallery and make us believe that foreign aid is tantamount to modern day slavery, at 70.9%, his country remains one of the biggest beneficiaries surpassed only by tiny countries as Malawi and Micronesia! If this is tantamount to slavery, how come Rwanda keeps enjoying injection of foreign aid far more than most African countries?

It is quiet hilarious that those in PF, and of course their allies, are quick to dismiss the New Dawn Administration’s initiative to reach out to Brentwood Institutions as a callous attempt without acknowledging possible advantages as adduced by The Mast Newspaper.

Our country may indeed be endowed with vast natural resources that can utilized to turn our economy around. But for this to be reality, we definitely require a solid financial base to extract our minerals from the bowels of the earth and indeed set up industries to manufacture finished products. The same applies to the agriculture sector if we are going to witness a rebirth of factories that are going to churn out clothes from our cotton, shoes from our cattle, cheese from our milk, and starch from our cassava, among other things.

The main reason why most African countries fail to put foreign aid to better use is rampant corruption and mismanagement of resources. More often than not, the money which is meant for developmental activities usually end up in the pockets of a few individuals. In other instances, they tend to inflate the prices of contractual works so that they can share the spoils with the contractors who usually end up doing shoddy works knowing that their heads won’t roll since some senior government officials have benefitted from the loot!

As long as the new administration demonstrates stronger political will to stamp out corruption and other financial leakages, there should be no cause for worry. So far, we’ve seen the new government allowing the opposition to do its politics with any encumbrances, a vibrant civil society is slowly awakening while the media is flourishing.

What’s the meaning of this? There will be proper checks and balances in place unlike what was the case in the previous regime.

15 COMMENTS

  1. Malabish, you are also playing to the gallery by bashing one of Africa’s most successful presidents. Paul Kagame, love him or loathe him has turned around a country which experienced horror but transformed into a nation competing for first world status. Learn to celebrate success and give credit where credit is due. We should be ashamed of ourselves because our peace has nothing to show for but our brothers and sisters from Rwanda can teach us a thing or two on why we should never entertain tribalism. Our problem is that we talk too much with no action or poor finishing.

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  2. You can not simply solve kaloba using Kaloba and you call that solution. Then you must be haywire.
    Why should African countries be used as beits in the game of supremacy fight between China and US+UK?

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  3. Such sentiments fail to answer the simple direct question. Name one Nation that has been funded to become economically independent by theses institutions. Lest people forget these same institutions come in to set their own agenda and many a time that agenda is against peoples aspirations while pandering to the political elite and academics. No amount of spin , talk or blame shifting takes from this real fact. Zambia’s’ national agenda and the promises of the UPND party of free education, low fertilizer costs , among others cannot and will not be supported by these institutions who demand austerity and cost cutting . So we all know that this is not a solution but w chase it because it suits the political narrative of the day

  4. Some of these Articles….it’s not even rocket science…just put it plain and simple…IMF deals in KALOBA….period…..if you come to me asking for US$100 which you don’t have at the moment how do you expect to pay me back US$200 within a month….but if you’re able to do that then you’re a genius…People have lost Properties because of Kaloba and Kalusha Bwalya is one of the victims….as with IMF all our resources will be stolen and they will control you and make life tough for Zambians….yes life is Tough in Rwanda…it’s vary very expensive to live and do business in Rwanda…I have Rwandese friends and they’re saying it’s hell…not all that glitters is gold

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  5. Great article, thanks for highlighting Rwanda’s aid dilemma. Kagame knows full well his country is massively dependent on the help of foreign aid, but at least he uses aid to the benefit of his people and Rawnda is growing independently. Kagame can play games with the typically misinformed, social media ‘economists’. Fortunately for us in the real world, those ones are not actually responsible for anything important. Let them keep criticizing any attempts at solutions, without even giving them a chance to play out. That’s the comfort of being a keyboard blogger and/or a PF hypocrite who caused the mess. You have no real responsibilities, just criticize, be unreasonable and unrealistic.

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  6. Useless, unresearched article. I can’t comment further. Does the author even know why bretton wood institutions (IMF & WB) were created? Please don’t expose your little knowledge here.

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  7. To start with I would like to correct you that Malawi though small in size but their population is much higher than the Zambian population.
    On aid the truth is aid doesn’t develope any nation in this world all the aid you hear about are just pocket money for journalist in the UK and not even half their pay.
    What you would have said is that every nation in Africa should learn to manage their resources without any outside nations , by the means of corrupting the leaders, the problem we have in Africa is that they get so easily corrupted by these nations who quickly bring gifts to any President who is voted into power to mortgage their countries, for example when HH came into power a few countries sent gifts to him.
    To say the truth about these gifts is just there to blind…

  8. In fact, most if not all successes recorded in Ruwanda so far is as a result of the IMF and World Bank support the country has received over the years. This was so because these institutions briefly been shifting from market to state led especially those with kind of dictatorial economies as a strategy. Kagame has is not telling the truth, unless he tells us that he and his government have been enslaved by those loans.

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  9. Good article with relevant examples. Nothing wrong in borrowing as long as long as the money is well invested. Which is not the case with Zambia under PF. Borrowed so much and stole or misused most of the money. Rwanda is a wrong example. This a country that has been surviving on aid since Kagame came into power. PF supporters don’t read.

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  10. This guy calls himself a researcher but seems clueless with regard to readily available knowledge. As pointed out by other bloggers, show us an example of an IMF sponsored success story. It does not exist.
    Simple question to answer, why where these Bretton woods institutions created and what do they stand for?

  11. The most interesting thing in this Fiscal Plans 2021 to 2022 is to observe on how the Finance minister and Commerce will work out to address to reduce the Fiscal Deficits on the Budgets and the Funding Financing methods that they will employ In short any funding methods that is least cost and will result in growth to address the budgetary balances must be welcome and including the IMF that will reduce stress and give some space in the short to medium term The IMF if used in productive sectors will result in growth that will translate in revenues for long-term but if simply in spending artificially will show gains and only recap later in elevated deficits Its a funding and financing solution to also…

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