In May, the Minister of Finance and Economic Planning, Dr. Uzziel Ndagijimana presented to both chambers of parliament, the Budget Framework Paper (BFP) and the midterm budget estimates for 2017-2018/2019.
Ndagijimana said that the government will continue to promote import substitution and diversify exports with the aim of reducing the exposure to external shocks and imbalances over the medium term.
“The implementation of Made in Rwanda policy will continue to play a key role in narrowing the current account deficit in the short to long run and help to consolidate private sector domestic activities, create jobs and boost economic growth,” Ndagijimana said.
Key targets and interventions will include growing traditional exports, promoting non-traditional exports, growth of the service sector as well as cross cutting interventions such as promotion of made in Rwanda, developing of cross border and trade logistics infrastructure and development of industrial parks among others.
Proposed 2018/2019 Budget
The proposed total budgeted resources for fiscal year 2018/19 amount to Rwf2,443.5 billion, which is Rwf328.2 billion higher compared to Rwf2,115.3 in the 2017/18 revised budget.
The 2018/19 domestic resources are projected at Rwf1,646.4 billion, representing 67% of the total budget.
Total tax revenues are projected at Rwf1,353 billion, non-tax revenues at Rwf155.7 billion, Domestic Borrowing is projected at Rwf129.1 billion while Rwf8.6 billion will come from the use of government deposits.
External grant is estimated at Rwf396.3 billion while total external loans are projected at Rwf400.9 billion. Domestic resources and external loans will account for 84% of the total budget while 16% will come from grants which is in line with government of Rwanda’s ambition of self-sustenance.
On the expenditure front, the recurrent budget is projected at Rwf1,305.7 billion while development expenditure is estimated at Rwf897.1 billion. Net lending is projected at Rwf190 billion which will be used to finance key government projects such as the construction of Bugesera airport, expansion of Rwandair operations, export promotion activities among others. Rwf27.2 billion will be used for payment of arrears while Rwf23.5 billion will be used to accumulate government deposits.
The allocation of resources in the budget for 2018/19 fiscal year and the medium term is guided by interventions in National Strategy for Transformation.
These will include creation of off-farm Jobs, promotion of urbanization to enhance economic transformation, promotion of competitive knowledge based economy, industrialization and export promotion, domestic savings promotion, increased agriculture and livestock production and productivity, sustainable management of Natural resources among others.
People speak
Different people who spoke to IGIHE suggested that the government would increase the budget allocated in small enterprises making local products which would also help to create many jobs.
Gloriose Umutesi, the founder of Shallon Fashion, a shop that makes different handicrafts products including carpets, bags, indoor shoes and other clothes says that the budget should consider increasing the promotion of Made in Rwanda products.
She says that the people engaged in the sector have no access to the loans for them to be able to add value for their products.
“We would request advocacy from officials so that we have full access to loans which would help us produce enough stuffs. They should also advocate for us to have more the markets for our products,” she said.
Emmanuel Abarikumwe, Talon Minutes Ltd owner, an enterprise that makes leather shoes says that in the budget, officials should consider constructing the plant that makes leather products.
He said that they import all materials used to make shoes are imported from Kenya.
“We wish that they could construct a plant that makes leather products. All products are imported from Kenya. So, at the end we produce shoes which are so expensive and people do not like them,” he said.
He said that as their products are expensive, they are incapable to expand the market so that they can export.
Francois Mutarambirwa, a university graduate said that the Government should increasing the resources allocated in the well-being of people.
“By doing so, they have to reduce poverty through agricultural activities since the financial income and well-being of people are mainly supported by this sector. And 80% of Rwandans are in agri-business,” he said.
He said that in a way to uplift the welfare of population, the budget allocated to infrastructure should also be increased. He said that water and electricity should reach all people.
Mutarambirwa also suggests that the budget should also consider creating more jobs for youth to get employment and reduce unemployment rate.
“They should consider allocating increased budget in job creation. Leaders should also bear in mind new business creation which goes along with job creation,” he suggested.
Aime Sandrine Uwambaje, the Executive Secretary of Gikondo Sector of Kicukiro said that the budget for planned activities on sector level is enough.
“The budget is allocated based on planned activities in different sectors like good governance, economic development and social welfare; all activities that were planned in four government pillars have enough budgets. But, if they plan more activities, they should increase the budget,” she explained.
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