The Government has projected the National Budget for Financial Year 2014/15 at Rwf1.7 trillion, a slight increase from this financial year’s Rwf1.6 trillion.

The Minister for Finance and Economic Planning, Amb. Claver Gatete, announced the projections yesterday while presenting the Budget Framework for the next financial year to a joint session of Members of Parliament in Kigali.

The Budget Estimates, which the minister presented along with the medium-term Budget Frameworks for two other financial years after the current one, is in line with the country’s second Economic Development and Poverty Reduction Strategy (EDPRS2).

The government has proposed to spend 52 per cent (Rwf915 billion) of the entire next Budget on funding four thematic areas of the EDPRS2.

They have been identified under the plan as the main pillars for fast-tracking the country’s progress toward attaining middle-income status by the year 2020.

Among the four areas, government has proposed to spend 25 per cent (Rwf438.9 billion) of the total Budget on economic transformation, which seeks to sustain rapid economic growth by mainly investing in urbanisation and rural settlement, energy production, increasing exports, and developing the private sector.

If Parliament approves government’s plan, the rural development thematic area, whose main goal is to improve the quality of life and economic wellbeing of people living in rural areas, will be allocated Rwf252.8 billion–equivalent to 14 per cent of the total Budget resources.

The government proposes to allocate 10 per cent of the total resources (Rwf170.3 billion) to the productivity and youth employment thematic area, whose goal is to move Rwanda from agriculture-based economy to an industry and services-based economy and targets to create additional 200,000 off-farm jobs every year.

The fourth thematic area for EDPRS2 has been allocated Rwf53.1 billion, equivalent to 3 per cent of the total Budget resources.

Minister Gatete said the accountable governance area for the next financial year will focus on improving service delivery in both public and private sector and ensuring that services in different sectors are better decentralised. 

Step toward self-reliance

While Rwanda currently depends on donors for about 40 per cent of its Budget, the National Budget Framework puts overall total grants including loans at 38.1 per cent of the total 2014/15 Budget (Rwf 667.6 billion).

It’s a positive development with regards to the country’s dream to be self-reliant, Amb. Gatete said, explaining that for the first time, domestic financing is exceeding the donor financing.

"It shows that we are really making progress in terms of financing our own development,” he said.

Total domestic revenue collections are estimated at Rwf986 billion, with Rwf906.8 billion expected to come from tax revenue, while Rwf79.3 billion will be derived from non-tax revenue including reimbursements from Rwanda’s peacekeeping missions abroad.

The government has committed to end reliance on foreign aid by promoting economic development plans that aim to transform the country into a middle income economy.

MP Constance Mukayuhi Rwaka, the chairperson of the parliamentary Committee on National Budget and Patrimony, said: "We need to assess what measures are there to ensure that this fiscal year’s targets are met.”

MP Evariste Kalisa stressed the need to assess why the country is not meeting the targets for electricity generation. 

Minister Gatete said the economy is expected to grow at a higher rate in the next financial year as a result of the normalisation of aid flows, improved agricultural production, as well as prudent monetary policies that promise to keep inflation down.

"Despite the slowdown in economic performance of 2013 on account of adverse weather conditions that affected agricultural production, a stronger outlook for economic growth is expected in 2014 and the medium term,” the minister said.

The parliamentarians have a few days to submit their comments on the budget framework before the government can produce its final Budget Estimates for the fiscal year 2014/2015, which will be brought back to the legislative House next month.