Rwanda to increase emergency budget to respond better to crises

Response to national crises such as disasters and pandemics is set to get a major boost following a decision to increase the budget allocated to emergencies as stipulated in the new organic law on public finance management. The development could see emergency budget share increased from the current cap of 3 per cent of the recurrent national budget to 5 per cent of the total budget, MP Omar Munyaneza, Chairperson of the Committee on National Budget and Patrimony at the Chamber of Deputies told The New Times. The new law was adopted by the Chamber of Deputies on August 3, and by the Senate on August 12. Under the new law, if emergency funding was calculated based on the Rwf4,658.4 billion total national budget for the current fiscal year, it would be up to Rwf232.9 billion. This money is almost the combined public funding allocated to agriculture and water projects during this financial year. It is also equivalent to over 60 per cent of the Rwf350 billion that the Government has so far invested in the Covid-19 Economic Recovery Fund in two years, with a view to recover businesses from pandemic impact. Public finance management has been following the Organic Law on State finances and property, which was enacted in 2013. With the 2013 law provision, the emergency funding would be limited to Rwf79.6 billion given that Rwanda’s recurrent spending is estimated at Rwf2,654.9 billion in this financial year. Speaking to The New Times, Jean Baptiste Nsengiyumva, a disaster management expert said that usually, in emergency management, the issue that researchers have been exposing is the inadequate preparedness to respond as there have been some cases of emergencies that were exceeding the available response capacity. He described the emergency funding increase as an important development expected to have a major implication through increased crisis response capacity to crises including drought. “Emergency can paralyse the country’s entire life. But, when there is adequate preparedness, the impact is mitigated,” he said, but called for all people to make concerted efforts in adaptation to disasters. “So, this is a major step made and I hope it will bring a good change in disaster and other emergency management, and in protecting the affected people,” he said. Emergency funding and its revision The new law stipulates that in the Central Government entities, an emergency budget line shall be provided for in the State budget to meet urgent and unexpected expenditure. The amount of expenditure meant for emergency budget reserve shall not exceed 3 per cent of the total expenditure in the State budget. This is higher than the up to 3 per cent of the recurrent budget that was provided for in the 2013 law. To use the impromptu (emergency) budget line, the Minister [in charge of finance and economic planning] must transfer the required amount to the relevant appropriation under the budget of the central entity which must use it. Overall, the budget revision was possible six months after the budget was approved by the Chamber of Deputies – basing on the mid-year budget execution report from the Minister of Finance and Economic Planning or the Chairperson of the Executive Committee of a decentralised entity such as a district. According to the new law, a revised draft budget may be submitted to the Chamber of Deputies or the Council of a decentralised entity any time during the fiscal year if a major unexpected event requiring new expenditures has occurred. Before tabling such a revised budget, all the possibilities of reallocations as well as the use of the impromptu budget reserve must be exhausted. In the event of a major unexpected event that prevents Parliament from sitting and requires immediate new expenditure, a decree-law is put in place after approval by the Cabinet. Under this decree-law, the Minister [in charge of finance and economic planning] has powers to make reallocation of appropriations that would otherwise be prohibited under this Organic Law and authorise spending up to 5 per cent of the total expenditure of the State budget. MP Munyaneza said that the law allows the expedited budget revision to respond to an emergency, without waiting for the six months to elapse after the budget approved by Parliament, or the end of the fiscal year. “This is because there is something urgent that is going to be done and will result in exceeding the approved 3 per cent of national budget,” he said.

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Rwanda to increase emergency budget to respond better to crises