Budget should focus on infrastructure, agriculture modernisation - economists

As Finance Minister Amb. Claver Gatete prepares to present the 2015/16 Financial Year Budget Estimates to Parliament today, economists say the government should prioritise infrastructure and agriculture. The economists who spoke to The New Times, yesterday, argue that more funding for the infrastructure sector, especially for energy production, will boost investment and industrial growth. “This budget should promote energy production and infrastructure development in general as they are essential for any country that seeks to industrialise its economy. There cannot be development without adequate infrastructure because it affects all other sectors,” said Prof. Manasseh Nshuti, a former finance and trade minister. Birasa Nyamurinda, an economics and finance lecturer at University of Rwanda’s College of Business and Economics, said energy is the leading pillar for economic growth. “Therefore, we should prioritise power generation which will, in the end, lead to reduction in power prices and attract more investment into the country,” he said. Nyamurinda added that government should increase funding to the agriculture sector to promote modern farming and boost crop and animal production. “Over 80 per cent of the Rwandan population depends on agriculture, so it would be a mistake to ignore this sector,” he said. Callixte Kamanzi, an Economics lecturer at Kigali Independent University, commended the country’s move toward self-reliance but was cautious about the shift from external to internal dependence. “We have to ensure that the shift does not cause funds shortage in local financial institutions which buy the government’s treasury bonds thus reducing money available for the public to borrow,” he said. Kamanzi said he expects the government to further reduce recurrent expenditure and allocate more money to development activities and increase access to finance. “Government should spend less on recurrent budget and increase development activities, like electricity which is still a problem in the country. Public financial institutions should also be supported so they can offer affordable credit to young entrepreneurs,” he said. Kamanzi added that skilled labour is a crucial asset for sustainable development and urged government to increase education budget. The proposed budget for the Financial Year 2015/16 is Rwf1,768.3 billion compared to Rwf1,762.4 billion for the current budget. The economy is expected to grow by 6.5 per cent in 2015 and 2016, respectively, compared to 7 per cent registered in 2014. Agriculture is expected to grow by 5.2 per cent, industry by 8.4 per cent and services by 7.2 per cent. editorial@newtimes.co.rw

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Budget should focus on infrastructure, agriculture modernisation - economists