Today, the government will present its 2013/2014 budget estimates and outline priority areas for the coming year. 

In the 2013/2014 budget that will be read this afternoon by finance minister Amb. Claver Gatete, government expenditure is expected to hit Rwf1.6 trillion, up from over Rwf1.4 trillion this year.

Although major donors like German, the UK and the European Union have restored aid to Rwanda, the country’s recent Eurobond issue has boosted sources of local funding, raking in Rwf223.4b.

Proceeds from the Eurobond are expected to pay off RwandAir’s loans and fund the completion of the Kigali Conference Centre and Kigali Convention Centre, as well as the Nyabarongo hydro-power project.

This will supplement domestic revenue collections which were recorded at Rwf346.2b between July and December 2012, marginally higher than the projected Rwf345.9b.

The next budget’s major focus is funding the second phase of the Economic Development and Poverty Eradication Strategy (EDPRS II) which is critical to Rwanda’s long-term goal to attain middle-class income status by 2020. 

EDPRS I from 2008 to 2012 was successful, with an implementation rate of 90 per cent and lifted one million people out of poverty.

Half of the Rwf1.6 trillion is expected to fund EDPRS II projects that will boost economic transformation, rural development, productivity, youth employment and government accountability. 

EDPRS II is, therefore, expected to propel Rwanda forward, ensuring the country attains real GDP growth of 11.5 per cent annually and a GDP per capita of $1,240 by 2020.

Other priority areas include healthcare, education, agriculture, export growth, social protection and public order and safety, which are estimated to share a budget allocation of 42 per cent.

With the government encouraging a more private sector-led economy, a significant portion of the resources will be injected into projects that aid private investment in services, trade and industrialisation.

The budget will, however, be presented against a backdrop of continual challenges in the global economy, especially the economic crisis affecting major donors in Europe.

According to statistics from Ministry of Finance, total grant disbursements between July and December 2012 amounted to Rwf199.1b against an estimate of Rwf243.5b.

Inflation is projected to also rise gradually to 7.5 per cent by end 2013 as the country continues to struggle with a high importation rate without a corresponding rate of exports.

As a result, the country’s economic growth is projected to slow to 7.5 per cent in 2013 from 8 per cent, while a decline in services is imminent due to cuts in credit to the private sector resulting from the tighter fiscal and monetary policies.

Last year, the execution of the 2012/2013 financial year budget was largely low due to the suspension of $44m funding by some donors. 

However, the government was able to execute its projects by revising its expenditure.