Rwanda’s budget is on track with 52 percent of the overall budget execution being implemented in the first six months of the financial year, Finance Minister John Rwangombwa said at a press briefing last week.
“Based on trends so far on the expenditure point of view the budget is on track, and we expect RRA to meet the revenue target,” he said during a press briefing at the Ministry’s head office on Friday.
Rwangombwa said that there is no deficit in the current account of the budget, or the gap between revenue and recurrent expenditure.
On the revenue point of view, during the revision of the budget, at the beginning of the year, government revised tax collections to Rwf1.6b of the total tax projections from RRA.
According to Rwangombwa, total domestic revenue was brought down to Rwf16b because government reduced on non tax revenues.
The Ministry had expected to collect money from selling of fertilizers which didn’t go well. Government also cut its projection on revenues from selling of ID cards and driving license.
“All the above revenues were supposed to be collected by other agencies and not RRA,” he said.
At the beginning of this financial year, the budget needed additional reserves whereby deficit widened and financing of the budget increased Rwf25b.
“We widened the deficit in the financing of the budget. There is deficit which is not coming because we increased the expenditures but because there are strategic activities we had to intervene by drawing down more reserves,” Rwangombwa emphasized.
Among the strategic activities mentioned include, construction of the convention centre and rebuilding of RwandAir.
He noted that there is room in the Central Bank which the treasury meet its cash flow demands.
But when there are delays in disbursement either with development partners governmet can draw on these reserves , the Minister said.
The press briefing was arranged to highlight Rwanda’s economic performance last year and projections for this year.
Last year revenues collected were 10 percent above the projected, and expenditures were as projected. The most hit sector was external trade because of the Global Financial Crisis. Exports declined by 24 percent while imports increased by 8 percent.
According to National Institute of Statistics, in 2009, GDP at current prices was estimated to be Rwf 2,992 billion and GDP per head was Rwf 296,000 or US$ 520 at the nominal exchange rate of 568.3 Rwf to 1 $.
However, the minister said that because of good relations with the development partners and the money through budget support, the overall Balance of Payment was positive to the tune of 6.2 months of imports of foreign reserves.
Rwangombwa, projects 2010 to be a success with a general recovery from the financial downturn, Rwanda targets a growth rate of between seven and eight percent.