Rwandans expect pro-people Budget

Finance and Economic Planning minister Claver Gatete will this afternoon present a Rwf1.7-trillion National Budget for the 2014/15 financial year. The Budget is a slight increase from the Rwf1.6 trillion in the ending year, and will also be majorly funded by locally-generated revenues. The government projects to raise Rwf906.8 billion from tax revenue collections compared to Rwf782.5 billion this year as it continues to drive efforts to ensure a self-reliant economy and people. East African Community member states Kenya, Uganda and Tanzania will also be reading their budgets at the same time as Rwanda. Burundi read its budget in February. Like the 2013/14 Budget, the next Budget is expected to prioritise areas that support the second Economic Development Poverty Reduction Strategy (EDPRS II) goals by mainly investing in energy generation, skills development, increasing export base to narrow the current trade deficit and supporting initiatives aimed at promoting a green economy. Other areas of focus will be rural development projects to reduce poverty, agriculture modernisation, primary health care, infrastructure development, ICT and support the private sector to deliver EDPRS II targets. Minister Gatete is also expected to announce more initiatives aimed at strengthening tax collection, as well as widening the tax base. Strategies that will promote cross-border trade and regional integration and those that support growth of local industry, as well as policies to expand exports and those that will encourage developers to invest in low-cost housing could be on the cards. Surprises could spring in the tax regime as the country moves to support local enterprises and also attract foreign investments. The private sector expects a Budget that will promote a competitive environment of doing business, especially through tax cuts and reviews, as well creation of new markets to support local industries. The mining sector, for instance, wants government to lobby countries like the US to open their markets to Rwandan minerals. Experts quip in John Bosco Kalisa, the TradeMark East Africa acting country director, told The New Times that government took into consideration the regional macro-economic situation during the Budget drafting process. “Things like easing the way of doing business, especially for small and medium enterprises (SMEs) and investors in priority sectors like energy and manufacturing are important,” he said. “For SMEs and the manufacturing sector to grow, the government should encourage the creation of backward and forward linkages for the firms by offering them incentives and widening the tax base,” Kalisa argued. Kalisa said if SMEs were supported to supply larger firms like hotels and supermarkets, this would reduce on the country’s import bill. According to Angello Musinguzi, a tax expert at KPMG Rwanda, the Budget should unveil plans to promote non-traditional exports such as garments, steel, flowers and leather. “The government should assist import substitution investments like fish, poultry and milk products, which Rwanda imports from the region, Asia and Brazil. These constitute a big share of our import bill and yet they can be produced locally,” Musinguzi said while presenting the Private Sector Federation position paper on the 2014/15 Budget Framework on Tuesday. Real estate developers will be looking for tax exemptions and scrapping of taxes on construction materials to encourage investments in low-cost and affordable houses. Ordinary Rwandans and business people, SMEs hope the government rethought the proposed 10 per cent excise duty on airtime to promote business and communication. Last year, over 60 per cent of the National Budget was funded by local revenue, but this figure is expected to rise this year. *** WHAT THEY SAY Mathew Rwahigi, a journalist. ‘Unemployment remains a challenge to many young people. When people talk about unemployment, sadly some immediately think about the university graduates on streets looking for jobs but there are many youth around the country, who in most cases did not even have the opportunity to study past senior three who need to be thought about. I expect to see more financing going into capacity building for these young people... practical skills training.’ Jesse K. Africa, media expert. ‘I hope the Budget will be focusing on key priority sectors like agriculture and infrastructural developments. These are basics that will drive our economy to a steadfast development. Radio and television should be able to penetrate across the country with unlimited barriers. MP Gabriel Semasaka, chairperson of parliamentary standing Committee on Agriculture, Livestock and Environment. ‘We expect a lot in this budget, especially being the budget that will begin the second year of EDPRS 11. We hope there will be more emphasis on the key priorities highlighted in the EDPRS 11, to achieve desired development objectives. Key areas should be agriculture and infrastructure development and creating jobs for the youth, since youth are practically the power of the nation. I also urge the authorities responsible with the state finance to make sure that no single franc should divert to unspecified activities, but rather account for every single resource used.’ Nicole Kayihura, student at Mt. Kenya University. ‘There are cases of landslides, which have left some people without shelter. I hope the government has planned more for natural disasters in the new Budget.’ Martin Musemakweli, Businessman. ‘I hope security budget has been improved, in the new Budget. We cannot achieve anything without assured security. Security is the basis of every sector’s development.’ Abudallah Matabaro, commercial motorcyclist. ‘Education is the key to sustainable development. I don’t wish to see more motorcyclists, but university graduates taking up much bigger investments. Just as President Kagame has urged Rwandans to think big, I also believe that bigger entrepreneurship ventures will take Rwanda to where we wish to be in national vision 2020. I want to believe that education sector has been fully funded in the next financial year.’