MPs raise concerns over draft budget
Lawmakers, on Monday, generally welcomed the draft 2012/2013 budget presented by Finance Minister, John Rwangombwa, but pointed out concerns over the possible effect of the continued and unpredictable global financial crisis.
After Rwangombwa’s presentation of the Rwf1.378.4 trillion draft budget, MPs also highlighted concerns over the gender budgeting process, trade deficit, agricultural research and other issues.
Unemployment is a challenge to our small economy and I wonder how these issues are catered for in the budget, because if many Rwandans do not have jobs, we shall have a problem
Last year’s budget was Rwf1.194.2 trillion.
After Rwangombwa’s presentation, MP Constance Rwaka Mukayuhi, the chairperson of the Chamber of Deputies’ committee on budget and national patrimony, which is currently scrutinising the budget, observed that development partners are grappling with financial problems, and wondered how the government would meet its targets when a significant chunk of the budget still relies on donor funds.
As per the draft, external donor support amounts to Rwf540.9 billion or 39.2 per cent of the total 2012/2013 budget “compared to Rwf 463.5 billion in 2011/2012, which was 38.8 per cent of the total budget”.
The budget has a deficit of Rwf132.4 billion – 9.6 per cent.
Rwangombwa said that funds to plug the shortfall would come from internal and external borrowing.
According to the minister, internal borrowing amounting to Rwf 24.7 billion would largely come from the issuance of treasury bills and use of the central bank deposits.
External loan assistance amounts to Rwf134.9 billion or 9.8 percent of the total budget.
Mukayuhi said: “I think the internal loans will be obtained but what about the external ones? Do we really have the commitment of the donors such that we can really say that our budget is secured?
She also questioned the issue of mainstreaming gender in the national budgeting process.
“It is true, there are improvements but these are not at all levels. And I wonder if it would not be appropriate to put this in the law so that all sectors could implement it.”
Connie Bwiza commended the increase in the development budget but also pointed out concerns over the global financial crisis to the national reserves.
To improve the population’s general welfare, the imminent budget envelope will see development expenditure increase to Rwf. 651.1 billion – 47.2 percent of the total budget – compared to Rwf. 508.6, or 42.6 per cent, in the previous budget.
Government plans to allocate Rwf. 321.2 billion – 23.3 per cent of the 2012/2013 budget – to sectors like transport, energy, electricity, and telecommunications. Food security, protecting the environment, and trade and industry would receive Rwf. 234.2, represents 17 per cent of the total budget.
Bwiza and other MPs insist that off farm jobs require more attention.
“I think this is one way of ensuring sustainable economic development. And again, in this context, large unemployment is a challenge to our small economy and I wonder how these issues are catered for in the budget, because if many Rwandans do not have jobs, we shall have a problem.”
MP Desire Nyandwi’s main concern was on research, especially to improve the country’s economic backbone; agriculture.
The lawmaker urged more funds be set aside for research and development. MPs Nura Nikuze and Emmanuel Mudidi also raised concerns over the country’s trade balance insisting that measures must be taken to reverse the trend.
During his presentation, Rwangombwa stated that the country’s exports in 2011 were valued at US$ 464.2 million. A slight increment is expected this year, with US$ 466.7 million in exports. This will largely depend on coffee, tea and mineral export prices which are expected to fall on the world market even though export volumes are expected to rise.
The minister further said that the 2011 imports amounted to US$ 1,563 million and are expected to increase to US$ 1,778.4 million in 2012 largely due to the volume of capital goods the government is importing to implement important projects.
While responding to the lawmakers’ queries and especially trying to allay Mukayuhi’s concerns, Rwangombwa revealed that a substantial proportion of external assistance had been disbursed.
“When we are still in negotiations, we actually do not even put the amounts in the budget. What is indicated here is part of the loans that come to finance the Kivu-belt road and it is not money that we plan to start mobilising for as we already have it.”
On gender balancing, the minister noted that efforts are being made and lawmakers will contribute ideas on how it can be perfectly streamlined.
The country has been working hard to introduce gender budget responsiveness in all sectors for the past three years. The minister noted that in the review of the law on gender mainstreaming, things will be rectified further to put more emphasis on the matter.
On possible threats to national reserves, the minister noted that the country has an extra five months sanctuary in terms of foreign reserves.
“In this five-month period, if we had unusual difficulties, meaning a halt on the money coming in, we would have time to evaluate imports and select only the most important ones,” Rwangombwa argued.
He noted on that the government targets to create at least 200,000 jobs annually, within the EDPRS framework.
On agricultural research, the minister noted that the focus over the past three years was to raise agricultural production through measures such as land consolidation and crop intensification.
Contact email: james.karuhanga[at]newtimes.co.rw