‘Think out of the box to fix budget shortfalls’

A ministry of finance official, on Friday, stressed that the current budget shortfalls call for thinking out of the box if the country is to fulfil its development agenda.All ministries and government departments appearing before the Chamber of Deputies’ committee on budget and national patrimony to explain their 2012/13 national budget have cited budget shortfalls as a key challenge.When Finance Minister, John Rwangombwa, presented the Rwf1,378.4 trillion 2012/2013 draft budget, last month, he noted that though it envisages an additional Rwf184.2 billion compared to the 2011/12 budget [Rwf1, 194.2 trillion], there is a shortfall of Rwf132.4 billion (9.6 per cent).On Friday, as the Prime Minister’s Office (PMO) defended its budget share, Elias Bayingana, the Director General of National Budget in the Ministry of Finance, stressed that officials must understand that the country cannot entirely depend on the government budget to achieve its vision 2020 targets.The PMO and agencies under its tutelage have a total budget of Rwf4.8billion in the 2012/13 fiscal year but fall short of over Rwf1.6 billion owing to unfunded activities.Bayingana noted “The government budget, during these times, is not enough. That is why, in the budget framework paper, we indicate that we shall try to involve the private sector and the civil society because that is where there is capacity.”Noting that the recurrent budget has been slashed by Rwf25 billion, compared to the 2011/12 budget, Bayingana stressed that there is need to “reflect on things” and examine whether maximum effort is made to tap into all possible sources.Challenging officials to make the most of other opportunities, Bayingana noted that foreign organisations bring in huge sums of money into the country and this should supplement the national cake.“In 2007, there was Rwf238 billion and in 2009, Rwf530 billion. In 2010, 2011, the NGO money coming into Rwanda is more than the whole government’s budget! These are figures we get from Immigration. Figures of money they declare as bringing in to support government programmes,” Bayingana noted.“They probably will not construct a road, a facility, or buy fertilisers, but what about conducting feasibility studies, conducting research, reviewing a policy? Should we really look for funds for these activities in the national budget? If they [NGOs] cannot do that, what else can they do? If they come into sector working groups, when we ask them about their role, what do they give?” Bayingana posed, noting that the ministry of gender and family promotion has a Rwf50 million shortfall to review the family promotion policy.Bayingana told MIGEPROF officials that the Rwf 50 million shortfall “is money we can mobilise.”“I really think that we need to think beyond the budget. The national budget as we allocated to different sectors is surely not enough. Even others yet to come will say the money is not enough. But the message we should give is that, even government institutions should help us. Given the way this budget is structured, even if you told me to extract Rwf 100 million, it would be very difficult since every institution reached its limit.”Out of the Prime Minister’s Office budget amounting to Rwf 4.8billion budget, the NCC shall receive Rwf 682.3 million though it has a Rwf 600 shortfall. Conversely, the National Women’s Council (NWC) will get Rwf 365.8 million but with a shortfall of Rwf 270 million.The Director of Cabinet in Prime Minister’s Office, Eugène Barikana, reiterated that it is possible to source for funding. An explanatory note for the 2012/13-2014/15 budget framework paper from the Ministry of Finance, indicating the risks to economic performance in the 2012/13 fiscal year notes that the government’s macro-economic framework and budget policy is formulated against the backdrop of risks in the global downside.The risks stem from a weaker global demand, lower commodity prices and higher oil prices. It is noted that underlying pressures are already beginning to be felt as the value of exports shows only a modest increase on account of projected lower commodity prices. On the other hand, outlays for oil imports have been increased to respond to the high price levels. Downside risks regarding delays in external donor support funds and flow of domestic revenue also subsist.As noted, funds to plug the shortfall will come from internal borrowing (Rwf 24.7 billion) – through the issuance of treasury bills and use of the central bank deposits.External borrowing will comprise Rwf134.9 billion (9.8 percent) of the 2012/2013 budget.Meanwhile, external donor support amounts to Rwf540.9 billion or 39.2 per cent of the total budget compared to Rwf 463.5 billion in 2011/2012, which was 38.8 per cent of the budget.