Govt Says Development Priorities on Track

{{The 55th Development Partners Coordination Group (DPCG) meeting took place yesterday to review the progress of government’s development objectives and discuss the way forward. }}

During the quarterly meeting, representatives of Development Partners were briefed on the medium term economic performance and growth projections, progress on the implementation of the second Economic Development and Poverty Reduction Strategy EDPRS2 as well as the National Employment Plan.

Presenting the 2014-15 macro-economic framework, government’s Chief Economist Leonard Rugwabiza noted that the economy is expected grow by 6% in 2014 compared to 4.6% of 2013.

This is mainly due to the expected good performance of agriculture by 5% (from 3% in 2013) and recovery of service sector growth by 7% compared to 4% in 2013.

Industry sector is projected to grow at 6% during 2014 lower than the 11% registered in 2013 due to reduced construction activities.

In 2015, the overall GDP growth is projected at 6.7%. Growth in industry is expected to pick up again and reach 9% while growth of agriculture and services are expected to stabilize at 5% and 7% respectively.

On the 2014-15 budget, Rugwabiza noted that fiscal consolidation through increased domestic revenue mobilization and expenditure prioritization to close the fiscal gap remain the key objectives of the Government’s medium term fiscal strategy.

On the resource side, government projects tax revenue to grow by 0.5 percentage points of GDP in 2014/15 fiscal year against 2013/14 and to undertake comprehensive tax reforms to sustain increases in domestic resource mobilization.

Expenditure side will focus mainly on achieving EDPRS2 objectives with a plan to allocate a higher proportion of expenditure to development projects relative to current expenditures.

“We will continue to monitor any risk related to budget implementation, including possible lower revenue collection stemming from reduced growth in order to take corrective actions where required, including through possible frontloading and/or increasing public spending to inject some liquidity into the economy to promote growth,” Rugwabiza said.

The total budgeted resources for the 2014/15 fiscal year amount to Rwf 1,753 billion (30.3% of GDP) compared to the revised budget of Rwf 1677 billion (32.8% of GDP), representing Rwf 76billion increase.

Total revenue and grants are projected at RWF 1531 billion, compared to RWF 1332.5 billion in the revised 2013/14 budget.

The DPCG is the highest-level coordination body responsible for overseeing the entire aid coordination and policy dialogue on development.

It is composed of Government of Rwanda Permanent Secretaries, heads of bilateral and multilateral donor agencies, as well as representatives of civil society and the private sector.