National budget expected to boost economy, tame commodity prices

Parliament on June 29 approved the Rwf4,658.4 billion national budget for the next fiscal year which will start on July 1, by passing the Law determining the State Finances for the Financial Year 2022/23. Compared to the over 4,440.6 billion budget for the current fiscal year, which will end on June 30, next years government spending represents an increase of Rwf217.8 billion, or 4.9 percent. Members of the Chamber of Deputies’ Committee on National Budget and Patrimony said that while analysing the budget, they realised it is in line with boosting Rwandas economic growth, and responding to the rising prices of food, fuel and fertilsers among other key commodities as a result of the Covid-19 pandemic and Russia-Ukraine war among other shocks. “There are strategies planned for sourcing from other places, commodities that Rwandans need. It is also planned to increase Made in Rwanda output, [Government] subsidy on fuel and fertilisers,” said MP Omar Munyaneza, Chairperson of the Committee, as he was presenting the budget bill analysis report to the Plenary Session of the Chamber of Deputies. “Again, there are strategies to increase cultivated area in order to agricultural production, as well as being close watch on monetary policy through monitoring exchange rates,” he said. Addressing financing gaps Munyaneza said that of the 50 most urgent financing gaps that required Rwf32.6 billion to fix and should be catered for in the beginning of the 2022/2023 fiscal year as the Parliament requested, 31 of them were allocated Rwf14.3 billion, equivalent to 44 percent. Meanwhile, he said that the gaps that were not catered for or not fully addressed will be addressed during the budget revision, or Medium Term Expenditure Framework (MTEF) – which sets out three-year national spending plans. One of the urgent gap was in the seeds and fertilisers subsidies project to support the crop intensification programme (CIP) which was allocated Rwf31 billion against the required Rwf56.8 billion, implying a gap of Rwf25.8 billion. The targeted activities under this project include distributing over 3,430 tonnes of quality seeds, 50,179 tonnes of fertilisers amid the rising costs of this farm input, as well as 37,736 tonnes of lime with Government subsidy, according to data from the Ministry of Agriculture and Animal Resources. In the approved budget, this programme was added Rwf5 billion to be spent as a financial support to lower fertiliser and seed costs for farmers. Speaking to The New Times, potato farmer Vincent Havugimana said that fertiliser prices went high with a kilogramme of (nitrogen, phosphorus, and potassium (NPK) compound costing over Rwf880 now, compared to Rwf600 before Covid-19 outbreak. “High fertiliser prices have hindered smallholder farmers’ fertiliseer use because they cannot afford them. This reduces farm output. Government’s support is needed to bring them down to Rwf600 a kilogramme,” he said referring to NPK.

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National budget expected to boost economy, tame commodity prices