Rwanda begins harmonising budget calendar to EAC

The government of Rwanda will prepare draft revised laws necessary for it to harmonise its budget calendar to that of the East African member states.

The government of Rwanda will prepare draft revised laws necessary for it to harmonise its budget calendar to that of the East African member states.

The move is to prepare the country to fully harmonise its programmes with those of other East African Community (EAC) countries.

The fiscal year in Rwanda has been coinciding with the Roman calendar year, but government has found it demanding to switch to that of the EAC that starts on July 1 and ends on June 31.

The Secretary General in Finance ministry, John Rwangombwa, said that, the relevant laws that require amendment have been identified.

"The draft amendments have been prepared and are being finalised, we hope to have the draft amend laws approved before the Parliament is dissolved," he added.

This alignment will start from July 2009 and that the new amendments in the regulation and processes of drafting the budget are aimed at creating simplicity, efficiency and effectiveness of the budget.

The change is also expected to strengthen medium term expenditure framework (MTEF), preparation of gender budgeting guidelines and rationalising performance budgeting.

"There are issues that we have to look at. We present our budget to Parliament in October and then consultations go on up to December. In Kenya, Uganda and Tanzania, consultations begin before the budget is presented," he said

The secretary general believes that in order for this to be implemented, there are three things that must be done; they include change of the relevant legislations, change of processes and procedures and effective communication to stakeholders about the changes.

Implication of harmonising

The implication is that even the planning period will also change to match that of Kenya, Uganda and Tanzania.

"The planning process has been following the calendar year with action plans being validated in January to February .This will be harmonised with the fiscal year," he said.

Adding that; "The current budget support and domestic revenue flows are back-loaded. With the change of fiscal year, they will be front-loaded," he added.

The ministry will also have to align the Joint Budget Support Reviews (JBSRs) with the budget preparation process.

The current JBSRs are in April and September but this will change. Commitments for the budget that is approved in December are made in September, with the revised budget calendar, the budget will be approved in June meaning that commitments will be earlier.

The ministry expects to submit the draft finance law for the mini budget in October this year. Revise the 2009/2010 in February and submit it to the Parliament in April 2009.

However there are still challenges a head of implementing this strategy, according to the secretary general, results from reforms often take long to be realised.

Other challenges the ministry encounters are; weak but improving institutional and human capacities, prioritisation of reforms which is very difficult, it is difficult to develop realistic assumptions for the mini budget.

"We are broadly on track on our budget reform agenda, there are challenges being faced but are part of the reform process. We appeal to development partners to align their processes too. We shall keep all stakeholders on board with the reform process," said Rwangombwa.

This comes at the time Rwanda is planning to join the East African Customs Union next year.

The country is also in negotiations with other EAC countries to create a common market that will allow free movement of persons, labour, goods, service and capital within the East African region by 2010.

For Rwanda to become a member of the EAC customs Union, it has to apply EAC rules of origin, adopt the three band structure of EAC Common external tariff which include 0 per cent on raw materials and capital goods, 10 per cent on intermediate goods and 25 per cent on finished goods.

Rwanda must also adopt the EAC Programme of the elimination of internal tariffs; Internalise the custom union protocol and its annexes and realign related legal and institutional framework for its implementation. It also has to adjust Customs Management Systems and put in place the required legal and institutional framework and strengthen the internal management systems.

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