Budget 2015/16: All eyes on priority sectors

The Minister for Finance’s right arm figuratively appeared to be laden by the briefcase containing the national budget; it was heavy with Rwf1768.2 trillion but by the time he emerged from Parliament on Thursday evening, the bag seemed much lighter than before. Inside parliament, the minister had metaphorically dipped his hand in and out of the suitcase pulling out chunks of ‘money’ to allocate to various sectors of the economy. Budget allocation is about taking care of all kinds of demands to keep the country in motion with priority sectors getting larger slices of the pie. Agriculture and infrastructure are two good examples of such sectors. A day before the budget was presented to members of parliament; I visited the agriculture ministry where the Permanent Secretary, Innocent Musabyimana, told this reporter that he was ending the year with a deficit of over Rwf7 billion which will be carried forward to the next budget. In the outgoing budget, the agriculture sector had Rwf91 billion to spend but with the deficit, it clearly wasn’t enough so in the new expenditure plan, the sector will have Rwf120.6 billion at its disposal. Increasing budget funding for agriculture is a good thing but the taxpayer, who’s funding 66 percent of the budget, should be able to see or feel the results of their money and that’s where issues arise. Part of the problem was highlighted in the recent Auditor General’s report which showed that the Agriculture ministry or one of its agencies, had spent previous allocations wantonly on things that weren’t immediately needed hence resulting into wastage. The ministry has some interesting projects that mean well for rural based populations such as the priority crop intensification, hill side irrigation and water harvesting, livestock infrastructure program, national strategic food reserve and pro-harvest as well as the agribusiness project. But for these projects to post life-changing results to benefit the target populations, the ministry needs to address its efficiency to optimise benefits to the target population. The same thing applies to the infrastructure sector, arguably the most important of all. With Rwf298.1 billion, the sector will have the lion’s share of the 2015/2016 national budget; last year, the sector received Rwf345 billion which was distributed to its eight implementing agencies. The eight agencies include Rwanda Housing Authority (RHA), Rwanda Energy Group (REG), Rwanda Transport Development Authority (RTDA), Water Sanitation Corporation (Wasac), Road maintenance fund, Onatracom, RwandAir and Rwanda Civil aviation. Christian Rwakunda, the Ministry’s permanent secretary said that they have registered 98 percent execution of the current budget, a good thing. However, can we feel the success? Let’s take the example of energy. In the financial year ending June, at least 42.7mw of electricity were added to the national grid mainly after the completion of the country’s largest hydropower plant, Nyabarongo 1. With the addition, the country now has some 160MW of installed production capacity from all the power plants. But has this resulted into a more stable power supply to users? Many a city dweller will tell you that power cuts seem to have increased in the past few months compared to the situation two years ago when we had less megawatts on the grid. What could explain this? Of course there’s a difference between installed production capacity and actual power generated and that means that although we have 160MW of installed capacity, the actual generation could be much lower hence explaining the regular blackouts. But we should also appreciate that development breeds new problems. For instance, when we added 42MW of power, we also connected 85500 new households to the national grid bringing the cumulative access to electricity to 22 percent, according to the ministry. The increase in the number of connected households also means that consumption pressure especially at peak-hours surged on the grid. So in the next financial year, government is spending more money towards energy and add an extra 70MW, a good and exciting thing until you look at the target. If 70MW are successfully added next year, it will bring the total of installed production capacity to 230MW; but that’s less than half the target of 563MW that has been set for 2018. Also, by 2018, at least 70 percent of the population is expected to have been connected to the national grid. But for 563MW to serve 70 percent of the population in 2018, it would require that the country’s power plants either produce at their actual installed capacity or very close to ensure stable supply at all times. Right now, it doesn’t feel like the taxpayer is getting the full 160MW of the installed production capacity of all the country’s power plants.

Opinions

Budget 2015/16: All eyes on priority sectors