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The project is much anticipated between both countries especially for Rwanda as a landlocked nation.

The railway on Rwandan side will follow the lowland through Ngoma, Kirehe, Bugesera and Kicukuro districts.

On Tuesday this week, Jean de Dieu Uwihanganye the Minister of State in charge of Transport in the Ministry of Infrastructure (MININFRA) requested parliamentarians to pass the draft law approving agreements between Rwanda and Tanzania concerning the implementation of the railway project ‘Isaka-Kigali’ signed in Kigali on 09 March 2018.

Uwihanganye explained that the project will greatly contribute to Rwanda’s development when completed.

He revealed that Rwanda has already designed the master plan waiting for approval.

“Rwanda has already made the master plan to be approved by the cabinet meeting in May this year. As you know, Rwanda promotes private investors. That is why we feel the Isaka-Kigali railway project should be executed under public –private partnerships. On the other hand, Tanzania seeks to get financing from the government only. This is how the situation is,” said Uwihanganye.

The 532 km railway will pass through Rusumo border to Kigali city. There will be an extra part of the railway leading to Bugesera International Airport.

The railway on the side of Rwanda will be 138 km with the rest of 394 being on Tanzania side.

It is estimated to cost USD $3.6 billion on completion. Tanzania shall meet USD $ 2.3 billion while USD $ 1.3 billion is required on Rwanda side.

Minister Uwihanganye said there should be no assumptions to have fixed everything by next year because Rwanda and Tanzania have not yet agreed on the source of funds.

“It was realized that it would be hard for the government to opt for loans. It is clear how difficult it is obtaining a loan of USD $ 3.6 billion or USD $ 1.3 billion on the side of Rwanda unless other activities are halted. What is possible is to bring in private investors to reduce the debt burden for the country. This is what we are still discussing to reach consensus,” he explained.

Uwihanganye explained that the implementation of the project will reduce transport costs by 40% hence positively impacting on Rwanda’s imports and exports.

President Kagame who was delivering a talk at Milken Global Conference on “Global Overview: Measuring the Winds of Change” panel moderated by The New York Times writer, Nicholas Kristof explained that the question should be what Africa has been doing with this debt.

Other participants that featured on the same panel include the CEO of Wilson Center, Jane Harman; the Director of China Strategy, Michael Pillsbury and former UK minister Lord Peter Mandelson.

Commenting on China involvement in Africa, President Kagame said; “Africa has its own needs and interests whether you want to see it that way or not.”

The competition between the USA and the industrialized world with China finds Africa caught between China and the West. The USA said that its military and security operations in Africa are hampered by China dominance on the African continent.

“Africa has not had debt from China only. Debt forgiveness was there because there was debt. The question is what Africa has been doing with this debt. Saying we are worried Africa will be trapped in debt with China, sounds like concern for Africa by outsiders rather than Africa being concerned for its own wellbeing,” said Kagame.

President Kagame also talked on the claim that China is sponsoring corruption in Africa. He highlighted that the assumption is that corruption is confined to China and Africa and that the west does not get involved in corruption, which is not true.

He said that nobody should give an excuse for corruption but should be fought wherever it comes from that ‘it is what we have been trying to do in our countries and in other African countries”

“Africa, my own country, look to the west as partners of choice, or investors of choice in Africa. If the west was doing investments that are required in Africa the way they should be, then Africa will stop being caught in this trap or competition,” highlighted Kagame.

He emphasized that Africa needs to get its act together and be a place that can raise its stakes higher than where it is and as much as possible to be one of the players on the global scene instead of being caught up in power games seen across the world.

This saw an increase of Rwf 291.7 billion (11%) compared to the previous year.

The minister presented the draft yesterday to both chambers of Parliament as he presented the Budget Framework Paper (BFP) and the midterm budget estimated for 2019/20-2021/22.

Minister Ndagijimana noted that the budget for the fiscal year 2019/20 will reflect the medium-term fiscal path which allows for increased spending to reach the NST1 goals while maintaining public debt at sustainable levels.

In this regard, the budget envelope is projected to increase from Rwf 2,585.2 billion in the revised budget for Financial Year 2018/19 to FRW 2,876.9 billion, in Financial Year 2019/2020 an increase of FRW 291.7 billion and to reach to more than 3,560.5 billion in FY 2021/22.

The proposed total resources estimated for fiscal year 2019/20 is made up of Rwf 1,726.2 billion of domestic tax and non-tax revenue, domestic borrowing of Rwf 237.6 billion, Rwf 6.4 billion from net lending and payments, external grants of Rwf 409.8 billion and external loans of Rwf 497 billion.

Total tax revenue collections have been projected to reach Rwf 1,535.8 billion in the fiscal year 2019/20. This amount will exceed the estimated figure of Rwf 1,373.1 billion to be achieved in the fiscal year 2018/19 by Rwf 162.7 billion while Non-tax revenue collections to the Treasury have been estimated at Rwf 190.4 billion; which is 7.9 billion Rwf lower than the projected amount of Rwf 198.4 billion in the fiscal year 2018/19.

Total expenditures in the fiscal year 2019/20 is projected at Rwf 2,876.9 billion, made up of recurrent expenditure of Rwf 1,424.5 billion, Development expenditures of Rwf 1,152.1 billion, net lending outlays of Rwf 244.1 billion, repayment of arrears amounting to Rwf 30.6 billion and accumulation of deposits of Rwf 25.5 billion.

The resources allocation for 2019/2020 and in the medium term was guided by the strategic objectives to achieve the transformational goals of NST 1 set out in the three pillars namely: Economic Transformation, Social Transformation, and Transformational Governance. The key interventions and projects under NST 1 pillars have been funded as follows:

The Budget Framework paper will provide the basis for the preparation of the 2019-20 budget which will be read in June 2019.

BFP is a document outlining government economic policies over the medium term that helps lay the foundations of the next fiscal budget. It is prepared in accordance with article 32 of the Organic Law on State Property and Finances and outlines the Government’s macroeconomic and fiscal policy stance as well as the budget policy over a 3-year horizon.

Outlining key priorities for 2019/20 fiscal year and the medium term Minister Ndagijimana told Parliamentarians that policies and strategies over the medium term are built on the Government’s ambition to raise Rwandans high living standards and reach the upper middle-income status by 2035 and high income by 2050.

This is reflected in the blueprint of the Vision 2050 under development. The National Strategy for Transformation (NST1), which has been developed as implementation instrument of the remainder of Vision 2020 and for the first four years of the Vision 2050, provides the direction of the policy objectives over the medium term.

Minister Ndagijimana noted that 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 the long run and help to consolidate private sector domestic activities, create jobs and boost economic growth,” Minister Ndagijimana said.

Key targets and interventions will include growing traditional exports, promoting nontraditional exports, growth of the service sector as well as cross-cutting interventions such as the promotion of made in Rwanda, developing of cross border and trade logistics infrastructure and development of industrial parks among others.

The new cooperation program worth 120 million Euros will cover the period 2019-2024 and intervene mainly in three sectors: Health (€45.000.000), Agriculture (€30.000.000) and Urbanization (€28.000.000).

The program will concentrate on better access to sexual and reproductive rights and health.
In addition, attention will be devoted to the improvement of value chains in agriculture, the commercialization of agricultural products and sustainable urbanization; public finance management is the fourth priority.

With regard to health and agriculture, the program will be piloting a new aid instrument: Results-Based Aid (RBA). In RBA the donor contribution is released to MINECOFIN after verifying that the agreed sectorial targets have been achieved.

Speaking after the signing event, the Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana hailed the contribution of the bilateral to achieving Rwanda’s sustainable development objectives.

“The Government of Rwanda regards health, agriculture, and urbanization as critical sectors that have a significant impact on Rwanda’s development outcomes as articulated in our National Strategy for Transformation. Therefore, Belgian support in these sectors is a step forward in realizing the targeted achievements,” Minister Ndagijimana said.

The Ambassador of Belgium in Rwanda, Benoit Ryelandt said the signing of this agreement is a sign of the special relations between the two countries.

“This country program is the result of a year of intensive preparations and discussions between Belgium and Rwanda, to define the priority sectors and the objectives, aspired results, and implementation modalities in each sector. The specific agreement signed today gives also the start to the first bilateral program between our two countries, were no longer any tax exemptions are requested,” he said.

“This commitment not to request tax exonerations is in line with the ambition to support improved local revenue collection and underlines the importance of the support the program includes to the further development of the Public Finance Management (PFM) in Rwanda through the PFM multi-donor fund,” affirmed Benoit.

The program was developed by the Belgian Development Agency, Enabel in close collaboration with different Rwandan ministries.

Implementation will be assured mainly through Rwandan government institutions in coordination with Enabel.

The funding follows the previous one worth 160 million Euros which Belgium gave to Rwanda in 2011. It was used in health, energy, and agriculture among other sectors.