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Could FDI be Rwanda s lifeline as donors pull the plug?

Rwanda has received significant support from international donor agencies to rebuild its economy since the 1994 genocide. With over US$1-billion a year, it has the highest donor aid per capita in East Africa (about US$85 a year), above countries like Uganda with US$43 and Kenya with US$60. Over 40% of its national budget is funded by foreign aid. However, aid flows to Africa are declining, and so may not be a reliable source of external inflow. According to a new study on Rwanda’s development prospects by the Institute for Security Studies’ African Futures and Innovation programme, aid flows to the country are projected to decrease significantly on the Current Path trajectory. They are projected to reach 7% of gross domestic product (GDP) by 2043, down from 14.8% in 2019.

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