Infrastructure and export promotion will be priority areas of investment for Rwanda in the upcoming financial year. The Minister of Finance and Economic Planning Ambassador Gatete Claver made the announcement while presenting the 2014/15 national budget before members of parliament.
In his speech, Minister Claver Gatete said that government expenditure in the coming fiscal year will amount to RwF 1.75 trillion, up from RwF 1.6 trillion last financial year.
More than half of the budget (RwF 915 billion) will go into priorities under the Economic Development and Poverty Reduction Strategy II (EDPRS II) to boost: economic transformation for rapid growth, rural development, productivity, youth employment creation; and accountable governance.
“Under EDPRSII thematic areas, economic transformation has been allocated RwF 438.9 billion (25%) of the total budget. The objective is to sustain rapid economic growth and increase the internal and external connectivity of the Rwandan economy.’’
“Rural development is one of the priorities under the second phase of the Economic Development and Poverty Reduction Strategy has been allocated RwF 252.8 billion (14%). The focus is to achieve sustainable poverty reduction through broad-based growth in rural areas. This includes by improving land use, increasing agricultural productivity, enabling graduation from extreme poverty and connecting rural communities to economic opportunity through improved infrastructure.” Minister Gatete said.
Other priorities include productivity and youth employment, accounting for RwF 170.3 billion (10%) of the budget.
The budget aims to transition Rwanda from an agriculture-based economy to an industry and services-based one by prioritising secondary, tertiary and vocational education, skills development, a healthy workforce and job creation.
To ensure continued citizen participation, accountable governance has been allocated RwF 53.1 billion francs. This will help strengthen public accountability and improve service delivery.
This year’s budget is consistent with the medium term fiscal framework. It continues the policy started last year of reducing exemptions by introducing taxes on project imports in revenues.
It also broadens the tax base by including some local government taxes in Rwanda Revenue Authority collections. Net lending has fallen to RwF 104.7 billion (6% of the budget) from RwF 118.9 billion last year, while the deficit, which stands at RwF 177.2 billion, is RwF 94 billion less than last year’s total (RwF 271.2 billion). This will be financed with net foreign loan receipts (RwF 107.6 billion) and domestic borrowing (RwF 69.6 billion).
“We estimate total domestic resources to be RwF 1.08 trillion, which accounts for 62% of the total budget. They include tax revenue worth RwF 906.8 billion, non-tax revenue worth RwF 79 billion, domestic financing worth RwF 95.6 billion and net lending worth RwF 4 billion.
External resources are projected to account for the remaining RwF 667.6 billion (38%) of total budget. Total grants account for RwF 544.8 billion of this, while total external loans equal RwF 122.8 billion.”
“Total recurrent expenditure for 2014/15 is projected to be RwF 864.5 billion, compared to RwF 799.9 billion in 2013/14. Expenditure on development projects totals RwF 784.1 billion, compared to RwF 758.8 billion in last year.” Minister Gatete said.