Donor budget support up 7 per cent

Despite uncertainties in the global economy, Rwanda’s development partners are expected to increase the country’s budget support in the next fiscal year in support of its planned investment in infrastructure and energy projects.The country is expected to receive Rwf297 billion from development partners in 2012/13 in form of budgetary support compared to Rwf279 billion in 2011/12. Expenditure is expected to rise to Rwf1.378 trillion in 2012/13 from Rwf1.194 trillion in 2011/12, according to the draft budget framework paper. “We had a clear picture of the next fiscal year, we…are ready to support (the) Rwandan government in this ambitious efforts,” Nils Warner, Head of German Development Cooperation told Business Times, on Monday, on the sidelines of a meeting between government and development partners.The meeting aimed at discussing strategic priorities and budget allocations for the fiscal year 2012/13, which will begin on July 1.The European Union, which is one of the key partners expected to increase funding to the country is grappling to save some of its debt saddled economies such as Greece, Spain, Portugal and Italy. And the Organisation for Economic Cooperation and Development (OECD) warned on Tuesday that the Eurozone could slip into “severe recession”, casting doubt on the stability of aid commitments to developing nations should European governments decide to take austerity measures. “I can not see the future, in terms of commitments and the future impact in terms of economic development,” said Warner, adding that; “But somehow we are confident because there are no signals that Germany commitments will have problems.”Elizabeth Carriere, the head UK’s Department for International Development (DFID) in Rwanda said: “It is increasingly becoming difficult for our economies that are going through difficulties to justify to the taxpayers about spending in foreign aid.”The increment in contributions totaling Rwf17 billion is mainly from the individual countries, the European Commission, World Bank and the African Development Bank (AfDB).The Minister of Finance and Economic Planning, John Rwangombwa, said government and development partners discussed different reforms especially in public finance management.“They (development partners) were impressed with the existing measures to accelerate development and poverty eradication,” he said.Carriere commended government for its use of aid money, saying the impact was visible.Last year, development partners noted that treasury lacked capacity to implement the budget, especially at the district level.However, the Permanent Secretary in the Ministry of Finance and Economic Planning, Kampeta Sayinzoga, said the situation has improved.“The challenge we had in the past was transfer of funds from central government to local government,” she noted, adding that districts are now challenged by how to raise their own revenues. Jolke Oppewal, Head of Cooperation in the Kingdom of the Netherlands, said last year his government went through a thorough re-assessment and only 15 countries including Rwanda , were selected as long term partners.The Government of Rwanda is financing its budget by 52 per cent.

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Donor budget support up 7 per cent