A month into the closure of the current financial year, most local governments have only executed between 15 and 45 per cent of development budget allocated to them.
This, according to members of the parliamentary Standing Committee on National Budget and Patrimony, poses a serious threat to development in decentralised entities.
The concerns were presented by the committee members to the Minister for Local Government, Francis Kaboneka, and his Finance and Economic Development counterpart Claver Gatete, on Wednesday, after the legislators concluded a countrywide tour to follow up on budget execution in line with development blueprint, the second Economic Development and Poverty Reduction Strategy (EDPRSII).
Constance Mukayuhi Rwaka, the committee chairperson, told the ministers that during their tour of at least 15 districts, the level of execution was inexplicable.
“It is very difficult to explain, all we want is to ensure that development budget is executed to at least 90 per cent to accelerate growth. There is poor planning at the district level in terms of budgetqry allocation and execution,” Rwaka said.
Gatete told legislators that one of the reasons was the delay by taxpayers to remit their taxes on time, hence affecting disbursement of funds to entities.
The ministers, together with the legislators, proposed that some legislation governing Budget Execution and legal framework for public finance management should be amended to facilitate early remittance and disbursement of tax revenues to decentralised entities.
In February, the government revised the 2014/2015 Budget Estimates upwards by Rwf6.5 billion to Rwf1759.6 billion as its implementation entered the second part of the financial year.
In the revised figures, the government was to borrow more money to fund development projects that would otherwise stall due to delays in disbursement of external funding.
Presenting the new Budget Estimates to Parliament at the time, Minister Gatete said the initial budget had partly been affected by delayed disbursements of foreign loans and grants.
He said this necessitated adjustments to ensure that implementation of EDPRSII remains on track.
Meanwhile, consultations on the 2015/2016 Budget are due to begin this month, with the new Budget expected to be out latest by the end of June, according to the harmonised fiscal policy of the East African Community partner states.
Low budget allocation for sectors
Legislators also decried the “insufficient budget” allocated to facilitate development in sectors.
Sectors are allocated 10 per cent of the total revenues generated by the districts plus 50 per cent of the fines collected from various offenses committed within a given sector.
“This budget is shared equally, among all sectors, yet different sectors have different challenges and plans. This impedes development and can be a major challenge to proper planning,” MP Rwaka said.
Among other issues noted by lawmakers included the poor collaboration amongst local leaders at the decentralised level, especially between advisory councils at all levels and the executives regarding the use of the budget, among other decisions making challenges.
Minister Kaboneka said they are trying to empower sectors in terms of building capacity and financially. so that all recurring administrative errors and economic planning at decentralised levels are prevented or minimised, at worst.
“Devolution started in 2006, since then things have been changing drastically and we are trying to empower them. It is a process,” Kaboneka said.
On the issues of insufficient budget for sectors, Kaboneka urged sector leaders to come up with Budget Framework paper and present it to respective districts so that, the district budget managers are able to know which kind of projects are available for supporting.
“This has been caused by poor planning. This is an issue we are trying to solve. Hopefully, sectors will start drawing their own budget frameworks to also help in budget allocation and accountability,” he said.
The Chief Executive of Rwanda Governance Board, Prof. Anastase Shyaka, told The New Times that it is very important that sectors are fully empowered and financially supported, for they are the foundation of national development.
Rwanda has 416 sectors across 30 districts.