Dissecting the performance of the mini- budget for 2009/10

The government has registered tremendous progress in implementing the national development strategy usually referred to as the Economic Development and Poverty Reduction (EDPRS). According to information availed from the joint budget support review report, during the first half of this year, the economic cluster led in performance. The cluster covers agriculture, energy, transport, financial and private sector development, environment, land and water resources. The development partners who reviewed the performance of the mini-budget include the African Development Bank, Belgium, European Commission, Germany, Netherlands, the United Kingdom and the World Bank. In a report released last week by the cross section of these partners, the economic cluster scored 21 out of the total 28 policy actions, translating to a 75 percent achievement rate. Specifically, private sector development recorded highest points as the sector achieved all registered indicators and policy actions for 2009. “In the context of doing business, the country was named the world’s top reformer in this year’s doing business report –the first for an African,” says the report referring to Rwanda’s ranking on the World Bank Doing Business index from 143 to 67 in this year’s report, as the biggest stride registered in 2009. Key reforms also achieved under the sector include laws passed in the financial sector on secured transactions in the payment system. In the agriculture sector, a draft land consolidation decree was developed, the seed law adopted and an assessment of the crop intensification program conducted. The strong performance of the agricultural sector was also highlighted as it led to relatively high growth figures in the first semester. The good performance of the agricultural sector propelled 9 percent economic growth recorded in the first semester of this year. However it was also highlighted that productivity in the sector is still low by regional and international standards. “This issue will need further attention, if Rwanda’s agricultural output is to keep up with population growth, particularly given limited land availability,” the report says. In the infrastructure sector, technical specifications for rural electrification were developed, a transport reform package was adopted by cabinet and the fuel levy (to be used in financing road maintenance) was substantially increased. The social cluster which covers education, health, social protection and water sanitation came second in performance scoring 67 percent. Significant progress was made in education where budget execution was at 90 percent. “MINEDUC has demonstrated high absorption capacity of both domestic and external resources,” the report underscored. Key achievements in education include fast-tracking 9 year basic education, creation of Rwanda Education Board and establishment of the Workforce Development Authority under MINEDUC. While progress has been made in water and sanitation sector the report said, in order to meet MGDs, an additional 2.7 million people will need to access water supplies and 3m to access hygienic sanitation. “To this end more effective policies and a sound management of water supplies and sanitation are needed,” Under the governance cluster, while satisfactory progress was made scoring 49 percent, the report notes that implementation of the mini-budget policy actions was slower than expected. The cluster includes public financial management, justice, reconciliation, law and order, capacity building and employment promotion. Major developments in sector include adoption of the labour law and approval by parliament of the law establishing the National Law Reform Commission. It also includes submission of the electoral code to cabinet and the adoption by cabinet of new organizational structures for central and local government. While overall performance was good, a key cross cutting issue indicated in the report is limited capacity in implementation of programs. “Observed variability in execution raises questions on the capacity to plan and implement. Related to this is the need for more staff and measures to that promote staff retention, particularly in areas of infrastructure and private sector development,” the report recommended. Development partners will make commitments for next fiscal year in midDecember. In the current fiscal year 2009/10, the share of the budget provided by development partners in form of general and sector budget support is about 22 percent (Rwf184 billion) of the total budget. Ends