Inside proposed 16 per cent increase in national budget

Finance minister Uzziel Ndagijimana presenting the Budget Framework Paper at Parliament on Monday. Nadege Imbabazi.

The Minister for Finance and Economic Planning, Dr Uzziel Ndagijimana, this week tabled before Parliament a plan to spend over Rwf2.4 trillion in the next fiscal year 2018/19, representing a 16 per cent increase from the current 2017/18 budget.

This was part of the Budget Framework Paper (BFP) and the midterm budget estimates for the next three financial years (2018/19-2020/21).

BFP is a document that outlines government economic policies over the medium term and helps lay the foundation for next fiscal budgets.

The proposed budgeted resources for fiscal year 2018/19 amount to Rwf2,443.5 billion, which is Rwf328.2 billion more than Rwf2,115.3 billion for the 2017/18 revised budget.

The increase in the budget is a result of the Government’s will to sustain economic growth by investing in priority areas of the economy, which is expected to grow 7.2 per cent in 2018, experts and officials say.

The Head of National Budget at the Ministry of Finance and Economic Planning, Rehemah Namutebi, told Saturday Times on Thursday that most additional funding will go towards sectors that are critical in the increase of the country’s Gross Domestic Product (GDP).

“We are growing and as we grow you can’t expect the budget to be the same. We are continuing with our national priorities and most of the increase on the budget will go towards sectors that are a priority to the growth of our GDP,” she said.

Namutebi outlined agriculture, services and industry among areas that will receive significant funding in the next fiscal year.

She said that, once the budget proposals are endorsed by Parliament, major schemes in the agriculture sector such as irrigation (to deal with climate change), local production of seeds and fertilisers, as well as crop intensification are likely to be initiated.

“Agriculture remains our main focus area given its impact on the economy,” she said.

In the area of industry, the official said that government looks to increase access to electricity by investing in building transmission lines, boosting access to water, and for the construction of the proposed Bugesera airport, and revising master plans for secondary cities, as well as preparing their designated industrial parks.

Namutebi noted that the budget proposals also seek to boost the services sector by creating thousands of off-farm jobs, boosting domestic savings schemes, and promoting the transport sector to facilitate trade.

Under preliminary budget proposals for the next fiscal year as outlined in the BFP, out of the Rwf2.4 trillion proposed for the next fiscal year 2018/19, development expenditure (funds to be invested in development projects) is estimated at Rwf897.1 billion while Rwf1.3 trillion will go towards recurrent expenditure (money used to run government’s day-to-day activities).

Officials at the Ministry of Finance, including minister Ndagijimana, have indicated that the allocation of resources in the budget for 2018/19 fiscal year and the medium term is guided by interventions already laid out in the Government’s National Strategy for Transformation (NST1).

The strategy, which has been designed as an implementation instrument of the remainder of Vision 2020 and for the first four years of Vision 2050, focuses mainly on the creation of off-farm jobs, promotion of urbanisation to enhance economic transformation, and promotion of competitive knowledge based economy, among other priorities. 

It also seeks to promote industries and exports, domestic savings, increased agriculture and livestock production and productivity, and sustainable management of natural resources.

The Budget Framework Paper, which is currently being analysed by Members of Parliament, will provide the basis for the preparation of the draft law for the 2018-19 Budget, which is set to be presented to Parliament next month.

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