As East Africa’s Finance Ministers unveiled their budgets this week, the region’s top philanthropic funders met in Kigali amid growing uncertainty in global development financing. For all that gathered, it was clear that without bold, innovative action, development financing faces an uncertain future.
Except in Kenya, where protests over the savage police killing of Albert Ojwang’ shifted focus from the budget, East African Finance Ministers presented their finance bills without disruption. Kenya will need to narrow its fiscal deficit, avoid punitive tax hikes, and reduce government expenditure. Uganda’s budget is expected to remain relatively flat, with new investment in crude oil production. Tanzania’s budget will continue to focus on essential health, education, and water services, as well as the upcoming elections. Rwanda ambitiously seeks to raise and spend their budget by 21 per cent, with 58 per cent of this coming from domestic funding.
This year’s budgets face one of the disruptive moments since the structural adjustment policies and the return of political pluralism in the 1990s. Sharp reductions in bilateral development financing, generative artificial intelligence, new digital technologies and the rise of “my country first” authoritarian governments have just changed three decades of global aid finance models.
The challenge is less about how African states and public benefits organisations meet the financing gap, now estimated at USD 7 trillion. For the 500 leaders who gathered in Kigali, Rwanda, for the 9th East African Philanthropy Conference, the preoccupation must be to trigger African economic liberation, community empowerment, equality, and rights for all. How do we stop our elites from handing our minerals, labour and commodities to other elites to grow their economies? How do we stop those governing our states from intentionally stealing and wasting our precious taxes on themselves? Without predictable development assistance, how does the East African region avoid becoming embroiled in civil strife and conflict caused by the failure of states to meet their constitutional and moral obligations to their populations?
Seized well, crises can also become moments of opportunity. The overseas development industry has long been criticised as financially limited, donor-led, and dependent on foreign capital. “Aid” has been the soft power that the global North countries have used to control our economies, access our markets, and prevent us from developing independent economies and regional integration. Now that a new generation of elected leaders across Europe and North America has declared their disinterest in global poverty and equality, or well-governed and stable African economies, African states, corporations and public benefits organisations need a new paradigm in their own interest.
This current feeling of financial fragility is less about the realignment of global north-south power relations. It is more about the weaknesses that have been structurally built into and hidden in the multi-lateral system. For too long, African Presidents have signed trade agreements that remain skewed towards African resources, leaving the continent. Loans have been intentionally designed and contracted, leaving poorer countries to pay higher interest rates than richer countries. Corporations have influenced taxation policies, which often result in large investors being relieved of their obligations while the pressure falls on individual citizens, including those in the informal sector.
To survive the sharp cutbacks in public health, education, and agriculture funding, as well as the coming storm of citizens’ expectations, East African governments must proactively embrace their sovereign responsibility or risk their countries sliding into ungovernability and crisis. Public Benefits Organisations in the region must also adapt or perish. Orphaned by past international funding partners and defunded, they must re-centre their work within the communities they serve. They must also seek to consciously transform the domestic governance eco-system and stop playing in the periphery of power.
Peter Kamalingin, a Pan-African development leader and global justice advocate, passed away this week. Before becoming UNAIDS Country Director in Kenya, he spent 25 years with Care, Oxfam, and ActionAid International, fighting hunger, improving public health and farming, and promoting greater justice and equality across Africa. Let’s honour his memory by protecting the progress Africa has made in the past decade.
Irũngũ Houghton is Amnesty International Kenya’s Executive Director and writes in his personal capacity. Email: [email protected]