Rwanda’s annual budget is expected to increase by 14 per cent in the 2011/2012 financial year as the government increases development spending to accelerate growth and reduce poverty.
In 2011, the economy is projected to grow at about 7 per cent, showing a slight slow-down from 2010, due to the expected adverse impact of rising food and fuel prices.
Higher food and transports costs pushed up the inflation rate in Rwandan urban centers for the sixth conservative month in April to 4.98 per cent.
Overall inflation rate, which has a higher weighting on food, surged more than five percentage points to 3.05 per cent in April from minus 2.03 per cent in March.
According to a draft budget framework presented to Parliament late last month, the budget will increase from Rwf984.0 billion ($1.65 billion) last year to Rwf1,116.9 trillion ($1.825 billion).
The framework highlights four pillars of expenditure: Infrastructure rollout; maintaining growth in productive sectors; development of human capital; and promotion of good governance.
The government will be seeking to raise resources for completion of strategic projects that will stimulate growth of other sectors.
These projects include expansion of national carrier RwandAir, construction of Kigali Convention Centre with a five-star hotel, increasing broadband access through the 2,300km fibre-optic cable project and increasing energy access from six per cent to 16 per cent by 2013.
It also includes road construction and rehabilitation, rural electrification, energy generation and distribution projects and ICT development. Completion of these projects will also assist in increasing exports and broadening the revenue base to generate more tax revenues.
Spending will also focus on the country’s productive capacities, which include key sectors like agriculture, trade, industry and finance.
This is expected to facilitate rural transformation of the economy by enhancing agriculture supply and agribusiness, scaling up land registration and promoting value addition for exports.
“By spending money on productive sectors you are not only meeting short-term goals but you also investing in sustainability. Investing in productive sectors creates opportunities for future growth and economic development,” said Maurice Toroitich, the managing director of KCB.
The budget projections indicate that the allocation to productive capacities is at 17.9 per cent.
However, human development and social sectors — health, education, social protection, youth, culture and sports — continue to receive the lion’s share of government resources, at an estimated 30.5 per cent, according to the draft.
The focus will be on improving the quality of life, with an emphasis on implementing the nine-year basic education programme, skills development through vocational training colleges, promotion of ICT in education and strategic support to higher education. This story was first published by The EastAfrican newspaper.
Leave a Reply