The government plans to spend Rwf3,807 billion in the 2021/22 fiscal year, which represents an increase of 9.8 per cent from the current Rwf3,464.8 billion budget.

The proposed budget was presented to both chambers of parliament on Wednesday by Richard Tusabe, the Minister of State in charge of National Treasury. It was approved by Cabinet on March 5.

Policies and strategies planned in the fiscal year 2021/22 and over the medium-term, Tusabe said, are guided by the National Strategy for Transformation (NST1) – a seven-year development programme that will run till 2024 – as well as efforts to drive economic recovery from Covid-19 pandemic.

Here are the key points in the proposed budget, including the source of funding and how the money will be spent.

Sources of financing

Domestic revenues, estimated at Rwf2,543.3 billion, are expected to account for 67 per cent of the total proposed budget while the remaining Rwf1,263.7 is expected to be mobilised from external sources.

Under domestic financing, total tax revenue collections have been projected to reach Rwf1,717.2 billion. This amount represents an increase of Rwf137.3 billion from the Rwf1,579.9 billion in the revised budget of 2020/21.

Government forecasts that economic rebound from the Covid-19 pandemic will drive up tax collections.

Under external financing, grants are projected to account for Rwf612.2 billion equivalent to 16 per cent and loans worth Rwf651.5 or 17 per cent of the entire budget.

However, some MPs said that there is a need to exercise caution to ensure that budget financing does not result in hiking taxes and ultimately increasing the cost of living.

"The economy has been devastated by Covid-19 pandemic,” said MP Frank Habineza, "Most of residents are still grappling with the effects of the pandemic.”

Some businesses are still closed or not performing well, he added, citing hotels and tourism.

Tusabe said that the economic recovery fund and subsidies to the manufacturing sector are expected to attract foreign investments, bolster exports and offset gaps in external financing.

The government, he added, has also paid more attention to the development budget than the recurrent budget as it bids to stimulate local production.

"Investing money in development projects is good for sustainable economic growth.”

Expenditure

Regarding expenditure, Tusabe said Government proposes to spend Rwf1,872.7 billion or 49.2 per cent of the total budget on recurrent expenses while development budget including net lending will amount to Rwf1,934.2 billion, equivalent to 50.8 per cent of the total budget.

This includes support to the private sector to invest for recovery from Covid-19 pandemic.

He said that Rwf250 billion will be invested into the Covid-19 economic recovery fund. This, he said, is the second phase of the fund which received Rwf100 billion in the current fiscal year.

"We are getting partners who are willing to finance this Fund. We hope that it will expand further, but this will depend on how we use its finance,” he said.

The economic transformation pillar was allocated over Rwf2,265.8 billion, accounting for 59.5 per cent of the budget, the social transformation pillar got over Rwf1,000 billion, or 26.7 per cent, while transformational governance pillar was allocated over Rwf526.4 billion, representing 13.8 of the financial plan.

MP Veneranda Nyirahirwa welcomed the move to increase the development budget. However, he pointed out that there was a need to improve planning to ensure that development projects are effectively implemented for the benefit of citizens.

Here are some priority areas and their projected spending:

Health

The health sector received over Rwf383.7 billion.

Projects to be undertaken in this sector include increased access to quality health through construction of health centres; basic infrastructure to health facilities; Research and Training Institute against Digestive Cancer (IRCAD); mental health daycare centre as well as food and drugs testing laboratory.

Others are the continuation of digitalisation of health services, and increasing Intensive Care Units (ICU) capacity with oxygen plants increased.

Another area is supporting the Covid-19 vaccination rollout programme, core for economic recovery.

Education

This sector received over Rwf422.4 billion or over 11 per cent of the whole budget—the largest compared to other sectors.

Improving the quality of education will be central to the sector spending and will involve recruitment of new pre-primary teachers, increasing the number of qualified primary and secondary teachers.

The school feeding programme will be expanded from pre-primary to senior six.

In addition, it will include the development of school infrastructures such as construction of classrooms, TVET schools, UR Head Quarters, school of mining; geology and permanent handwashing facilities.

Other interventions will include; increasing the use of ICT in teaching and learning, as well as digitalisation of TVET training manuals.

Agriculture

Agriculture was allocated Rwf139.6 billion, representing an increase of about 15 per cent compared to Rwf120 billion in the current budget.

This money will be used to help increase agriculture productivity through scaling up the use of inputs such as quality seeds and fertilisers; domestic production and multiplication of seeds, maximising irrigation, soil protection through radical and progressive terraces.

Also, labour and land productivity in agriculture shall be increased through mechanisation, while strategic food storage will be promoted as well as livestock development and value addition. Moreover, the funding will contribute to strengthening crops and livestock insurance.

Transport

The transport sector received over Rwf246.9 billion in the proposed budget.

With this financing, transport projects will be accelerated through the construction of national roads and feeder roads developed and maintained, the minister said.

It will also be used for the construction of Bugesera International Airport (NBIA) workstream I at 85 per cent and Work Stream II will continue as well as expressway to the airport.

Furthermore, it will support the resumption of RwandAir destinations that were halted due to Covid-19.