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Budget focuses on economic transformation

Finance and Economic Planning minister Uzziel Ndagijimana on arrival at the Parliamentary Buildings in Kimihurura where he presented the 2019/20 Budget yesterday. The national budget prioritises spending on developmental projects. / Sam Ngendahimana

The Government has kept focus on heavily investing in development activities that bring about economic transformation as it unveiled the budget for the next fiscal year, which begins on July 1.

Under the proposed 2019/2020 budget, the government plans to spend slightly over Rwf2.8 trillion, reflecting an increase of Rwf291.8 billion compared to the slightly over Rwf2.5 trillion allocated for the current 2018/19 revised budget.


As he presented the budget to both chambers of Parliament, the Minister of Finance and Economic Planning, Uzziel Ndagijimana, emphasised a deliberate focus on core objectives of the government’s first National Strategy for Transformation (NST1).


Therefore, a significant share of the budget’s planned expenditure will go towards the economic transformation pillar at the tune of roughly 57 per cent of the total budget.


Members of parliament share a light moment during the presentation of the 2019/2020 Budget by Finance minister Uzziel Ndagijimana. / Sam Ngendahimana

The trend of giving this pillar the lion’s share of the budget in the next fiscal year is clearly maintained since the same level of investment and prioritisation for it marked the current budget.

Just as in the current budget, the next budget will see the social transformation sector take around 27 per cent of the budget, while transformational governance has been allocated about 16 per cent of the envelope.

Out of the total budget for the next fiscal year, the recurrent expenditure or money that the government uses to run its day-to-day activities is projected at Rwf1,424.5 billion, which accounts for 49.5 per cent of the budget.

That leaves the total development budget, which is the money spent on economic development projects including net lending to public companies, at Rwf1,396.2 billion, representing 48.5 per cent of the total budget.

Ndagijimana said that the share of the recurrent budget in the next fiscal year is reduced by 1 per cent compared to the current year while the share of development budget is increased by 1 per cent.

“It confirms the Government’s effort to contain recurrent expenditures and focus more on development spending,” he said.

In line with NST1 key objectives, investments in the next fiscal year will go into priority areas that fast transform the country’s economy, such as projects and activities that will contribute to the creation of 213,198 decent and productive jobs.

Other activities to be funded include revision of secondary cities’ master plans and improving transportation infrastructure and services in urban and rural areas, improving air transport infrastructure, and promoting a knowledge-based economy by making the Rwanda Innovation Fund and other centres of excellence operational.

In the same line, more activities to promote industries to increase exports, scale up agriculture and livestock productivity, and increase access to electricity and water will receive significant funding. 

Investments will also go into projects to improve access to quality education and healthcare, accelerate graduation from poverty by scaling up VUP to reach more households, and eradicate    malnutrition and stunting.

Efforts will also be made to invest in improving service delivery through scaling up services offered online and strengthening justice, law, and order.

The government expects to fund the 2019-20 budget through domestic resources worth Rwf1,963.8 billion, which represents 68.3 per cent of the entire budget.

Out of those resources, tax revenue collections are estimated at Rwf1,535.8 billion, accounting for 53.4 per cent of the total budget, while non-tax revenues are estimated at Rwf190.4 billion representing 6.6 per cent of the total budget.

The remainder of the budget will be funded through external sources worth Rwf906.7 billion, which accounts for 31.5 per cent of the total budget and include grants worth Rwf409.8 billion (14.2 per cent) and loans worth Rwf497.0 billion (17.3 per cent).

Thursday’s presentation in Parliament paves way for the House’s final discussions on the budget bill, which will first be held at the level of the parliamentary Committee on National Budget and Patrimony in the next few days.

Then parliamentarians will finally have to pass the budget bill into law in time for the next fiscal year that starts next month on July 1.

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