Can countries that have become so dependent on foreign aid achieve sustainable development and competitive local industries? Malik Fal examines recent efforts in Rwanda and finds cause for optimism.

I work as a strategy advisor in Rwanda and other parts of Africa. When I go to work in our Kigali office, an intriguing thought keeps coming to me. What if the French and Swiss boarding schools, the PepsiCo corporate experience, the Harvard education, had all happened for that single purpose—the purpose to help Rwanda, and through Rwanda, to help Africa? The Rwandan leaders I meet and hug at local functions, the little boys and girls I see carrying water at night in remote villages as I drive back from the countryside, the breathtaking beauty of the thousands hills and soft-featured Rwandan faces, all trigger the same feelings in me; feelings of epiphany, resilience, and pride. The development challenges of Rwanda are great. So is my determination to help Rwandan leaders overcome them.

Claver Gatete is the ultimate Rwandan national leader. He sits two doors down from his Excellency’s office. He is at the center of all important economic decisions in the country. His office window opens on a magnificent tropical garden with exotic plants, fresh cut grass, and birds with colors so beautiful they look like Towers. The top business executives, industry association leaders, ambassadors, representatives of donor agencies, cabinet ministers, NGO directors, come to him for advice. They are the national-level leadership of his country, and they all visit Claver in his stunning presidential office.

An IMF delegation has just left. They saw a lot of people, made demands, but were not pro-actively helpful. Claver Gatete is a frustrated man. He leans back and throws his hands in the air. “When we were school boys in Uganda, we used to have a cruel game. We used to go to the weaker amongst us, bring them to a place with their backs against a wall, and tell them to step back three feet or get slapped. I just realized it today. This is what the IMF is doing to us!”

The frustration Claver Gatete feels is felt by thousands of national leaders around the world. Claver wants to invest in development; he can’t. His Treasurer tells him he only has recurrent budget funds at his disposal. He wants to borrow from private and foreign partners to drive development; he can’t. The IMF tells him his country’s exports are too low and he can’t exceed his debt sustainability ratio.1 He wants to boost exports by providing better support to local exporters; he can’t. The government has no money for that and the donor community is not interested in supporting local business people whom they feel have it too good already.  He’s got a Ph.D. in Econometrics. He is looking for a way out. He cannot find one. His problems seem insurmountable. They aren’t. 

Two mutually reinforcing goals matter to build the competitiveness of an economy and solve Claver’s problems. The first is about enhancing the competitiveness of key local industries. The second is about creating a culture of innovation and competitiveness in the country. I have the privilege to work with Claver towards achieving these goals in Rwanda.