Budget draft to be tabled in parliament today

KIGALI - The Minister of Finance and Economic Planning, John Rwangombwa, will today afternoon table the 2010/11 Budget Framework Paper (BFP) in Parliament. The spending plans cover the period from July 1, 2010, to 30 June 2011. It is the second BFP to be prepared in line with the East African Budget calendar. A copy of the Paper, which The New Times has seen, indicates that fiscal policy over the next year will involve increasing the budget deficit. The document indicates that expenditures are projected to grow faster than domestic revenues and grants primarily due to reduction in external budgetary grants while increased borrowing will be used to maintain priority expenditures. “Expenditures will increase to Rwf952.6billion compared to the previous budget expenditure of Rwf 849billion but will fall slightly as a percentage of GDP,” reads the Paper. “Total recurrent expenditure will represent 58.3percent of the total expenditure and net lending, leaving a development budget representing 41.7percent,” it adds. The Budget Framework Paper also indicates that development expenditure is projected to rise from Rwf 331.9billion to about 397.7billion. The overall fiscal and financing is expected to rise sharply from Rwf77.8billion to Rwf 140.3billion, however the Budget Framework Paper indicates that the budget deficit is projected to decline thereafter. “The widening budget deficit in 2010/2011 implies a drawdown of government deposits in the National Bank of up to 1.1percent of the GDP. This would be covered by the disbursement of World Bank and IDA grant scheduled for expenditure in the last quarter of 2010,” reads the concept note. Ends