Members of Parliament have said that the proposed Rwf4.6 trillion national budget for the 2022/23 fiscal year should focus on areas such as addressing the rising cost of living, supporting school feeding as well as narrowing the country’s import bill.
The proposed budget represents an increase of Rwf217.8 billion or 4.7 per cent of public spending compared to Rwf4.44 trillion of the revised budget of the current fiscal year.
The draft budget was presented by Uzziel Ndagijimana, Minister of Finance and Economic Planning, to both Chambers of Parliament on Thursday.
On the expenditure front, the recurrent budget is projected at Rwf2.79 trillion while development budget and net lending is projected at Rwf1.86 trillion.
While presenting the proposed financial plan to legislators, Ndagijimana said that the next financial year budget, which will start on July 1, will focus on the implementation of the government’s strategies meant to speed up economic recovery from the Covid-19 pandemic.
It also emphasises continued implementation of the ambitious national strategy for transformation (NST1) — a seven-year government programme running from 2017 through 2024.
Like most of the global economy, Rwanda faces two major challenges—the negative effects of the Covid-19 pandemic, and the Russia-Ukraine war, which has triggered a surge in prices of goods and services
Other challenges are climate change which might hamper agriculture output.
Here is what MPs think the projected budget should prioritise:
On addressing the rising cost of living
MP Christine Mukabunani said the increasing commodity prices are making life difficult for citizens.
Also, she said that there are still people who have not yet been paid compensations for their expropriated properties for a period up to 10 years. Pointing out that it is high time they got their payments to be able to cope with the rising cost of living.
"Second, there is an issue of small salaries especially for teachers. Isn’t there anyway that the salaries of teachers should not be taxed, so that they get their whole pay,” Mukabunani said.
MP Jean Claude Ntezimana said that the Rwandan franc has been losing value against the dollar; wanting to know what was being done to address the issue.
On prices on the market, he wondered why they continue a growing trend.
"Though it was said that it (inflation) is at 10 percent, I think it is higher,” he said
"For instance, [cooking] gas prices continue rising. The Government should put in efforts for the gas price to go down,” he observed, calling for supporting the made in Rwanda programme to reduce imports.
Minister Ndagijimana said that a currency is a product like any other and has its own market, pointing that the exchange rates are determined by the demand and supply.
In the current situation where imported goods are expensive, he said, the result is that the amount of US dollars needed to pay imports rise which increases the value of the dollar against the local currency.
He noted that the Government was working to ensure that the depreciation of the franc against the dollar does not exceed the recommended limits.
On the rising cooking gas prices, he said that the Government was regulating the prices of imported product, while exploring the use of methane gas from Lake Kivu for cooking and powering factory operations in the country in the long run.
Ensuring food security
Thanks to the strategic food reserve, MP Theoneste Safari Begumisa said, the country was able to provide food relief to needy people who were affected by the Covid-19 pandemic.
"Food security should be given much attention, with focus on commodities that can be kept safely for long [such as grains and cereals],” he said.
MP Pierre Claver Rwaka said that irrigation efforts were still small compared to the required pace to ensure sustainable food security. For instance, he cited Bugesera District, which has good access to water, but suffers from drought [that results in crop failure].
Commenting on this subject, Minister Ndagijimana said that food security is important to the country, and that increasing agricultural production is a government priority.
"We will ensure the availability of farm inputs [including seeds and fertilisers], and expand the irrigated area,” he said.
"Especially for livestock, we will put in more efforts in vaccination in order to protect them from diseases,” he said.
Tackling the rising cost of fertilisers
MP Damien Nyabyenda talked about the high fertiliser prices, suggesting that the organic waste being generated countrywide should be turned into manure to foster crop growth.
Currently, with the fertiliser prices – which are subsidised by the Government – local farmers have to pay Rwf768 for a kilogramme of urea, representing an increase of 26.5 percent from the Rwf564 they had to pay in July 2021. For DAP, a kilogramme is priced at Rwf832, or a rise of 23.9 percent from Rwf633, while that of NPK 17:17:17 rose by 19 percent to Rwf882 from Rwf713 in the same period.
Minister Ndagijimana said that the Government has been supporting farmers by subsidizing the fertiliser prices so that they are not overwhelmed by them.
He indicated that there are some initiatives that have started to make manure from organic waste across the country, adding they will continue in order to supplement chemical fertilisers in increasing farm productivity.
Reducing Rwanda’s imports to save its franc
MP Ntezimana said that the Made in Rwanda programme is needed as it has proven to promote import substitution.
However, he said that the prices of the products made in the country are still high, which threatens their competitiveness compared to imported products.
"For this to be achieved, the local businesses should be supported, including reducing taxes on the locally made products so that they become affordable,” he said, calling for booting exports.
MP Pie Nizeyimana said that it is good that the country’s economy is expected to grow by 6 per cent in 2022. However, he expressed concerns over the volatility in the currency market, which has seen the franc lose ground against major international trading currencies.
For instance, in 2017 the US dollar was exchanging for Rwf838, but currently trades Rwf1,031.
He called for strategies to address the problem, am0ong them, by establishing a single EAC single currency to reduce reliance on foreign currencies.
Addressing gaps in school feeding
MP Jean Damascène Murara wanted to know which efforts the Government said will invest in school feeding in the next fiscal year budget.
"When you look at the meals the students get at school, you realise that they are lacking in nutrients. During our recent [parliamentary] tours, there are schools we visited and found that it was not satisfactory,
"What is the Ministry of Finance and Economic Planning's plan to increase the funding for school feeding so that students get adequate food,” she asked the Minister.
Senator Ephrem Kanyarukiga said that lack of access to food results in some children dropping out of school as they are weak in class and they fail to follow lessons, yet their parents cannot afford school feeding costs.
"The government should prioritise school feeding in its education planning,” he said, adding that the Government should revise its contribution to this programme because it was not reflecting the current market realities.
Currently, the government provides Rwf56 per student’s meal per day, which some parliamentarians have constantly said is small.
Ndagijimana said that the government is to support the school feeding initiative, but observed that parents should play a greater role in the feeding of their children at schools.
Education support, with focus on TVET
MP Mediatrice Izabiliza said that education should be supported, especially by availing teaching aids mainly for hands-on skill acquisition in the Technical and Vocational Education and Training (TVET) establishments.
Minister Ndagijimana said that such needs will be catered for in the budget, pointing out that TVET consumables such as timbers for making furniture and metallic materials needed for welding practices will be increased.