In its efforts to reduce foreign budget support,Rwandan government has set measures to increase means by which this ideal can be achieved. A Budget Framework Paper presented yesterday has shown that Rwanda has made a big step to realize that. 60% of budget is made of home generated incomes while 40% comes from foreign development partners.
1. Background:
The 2013/14-2015/16 Budget Framework Paper was presented to Parliament on 14th May 2013 and the Parliament at its sitting on 27th May, 2013 adopted comments on the Paper and its comments are contained in the letter reference No. 691/CD/EA/FN/2013 dated 27th May 2013.
As required under articles 36 and 42 of the Organic Law on State Finances and Property, the Cabinet shall approve the draft finance before its submission to the Chamber of Deputies as provided in article 79 of the Rwanda Constitution of 2003 as amended to date.
In fulfillment of this requirement, the Cabinet meeting convened on June 12th, 2013 and approved the 2013/14 draft finance law as attached.
The comments submitted by parliament on the 2013/14-2015/16 Budget Framework Paper were discussed during the meeting that was held in MINECOFIN on 4th June 2013 that brought together the Economic and Social Clusters. The recommended actions to address the issues raised by Parliament are properly recorded in the minutes of June 4th 2013.
The above recommended actions are shown in the attached minutes and have been adequately incorporated in the finalization of the draft law determining the State finances and property for the 2012/13 budget.
2. Total Resource Envelope:
The total budgeted resources for the 2013/14 fiscal year amount to RWF 1,653 billion. This represents an increase of RWF 103 billion compared to the RWF 1,550 billion in the revised 2012/13 budget.
Total domestic resources are estimated at RWF 994.9 billion, which accounts for 60.2% of the total budget, while external resources are projected at RWF 658.6 billion that accounts 39.8% of the total budget. The details are shown in the attached table below:
3. Total Expenditures:
On the expenditure side, total recurrent expenditures is projected at RWF 735.7 billion or 44.5% compared to RWF 658.9 billion in the 2012/13 revised budget that represented 42.5% of the total budget.
The expenditure on development projects is projected at RWF 802.9 billion or 48.6% of the total budget compared to RWF 628.2 billion in the 2012/13 revised budget that represented 40.5% of the total budget.
The expenditure on Net Lending is estimated at RWF 114.8 billion or 6.9% of the total budget. This compares with RWF 170.5 billion in the 2012/13 revised budget that accounted for 11% of the total budget.
The reduction in Net Lending is attributed to the on-off payments debt payments in favour of KCC and Rwandair that were budgeted and paid in 2012/13 budget. The fiscal space created by this reduction has benefited development budget more than recurrent budget in line with EDPRS2 priorities.
The table below summarizes the projected expenditures for 2013/14 budget:
4. The EDPRS2 and Resource Allocation
The expenditure allocation in the 2013/14 budget and the medium term has been made according to the EDPRS2 objectives and a large share has been allocated to the EDPRS2 sectors as follows:
a) Thematic areas have been allocated 50% of the 2013/14 total budget and carries over 50% resource allocations in the medium term.
b) Foundational Sector has been allocated 37% of the 2013/14 total budget and is allocated an average of 37.5% in the medium term.
c) The support functions have been allocated 13% of the 2013/14 total budget and have an average of 10% in the medium term.
Total resource allocation is shown in the table below:
The thematic areas mentioned in the table above comprise the EDPRS2 emerging priorities and are at the centre transformational dynamics envisaged in the implementation of EDPRS2. The role of each thematic area in the transformation of the economy is summarized below:
a) The objective of the economic transformation thematic area is to sustain rapid economic growth and facilitate the process of economic transformation by increasing the internal and external connectivity of the Rwandan economy.
b) Rural development thematic area will focus on achieving sustainable poverty reduction through broad-based growth across sectors in rural areas by improving land use, increasing the productivity of agriculture, enabling graduation from extreme poverty, and connecting rural communities to economic opportunity through improved infrastructure.
c) The objective of the productivity and youth thematic area is to move Rwanda from an agriculture-based economy to an industry and services-based economy by prioritizing secondary, tertiary and vocational education, skills development, a healthy workforce and job creation.
d) The objective of accountable governance is to enhance accountable governance by promoting citizen participation and mobilisation for delivery of development, strengthening public accountability and improving service delivery.
5. Conclusion;
The 2013/14 draft finance law conforms to the 2013/14 – 2015/16 Budget Framework Paper presented to Parliament on May 14th, 2013 amended with the recommended actions as shown in the minutes mentioned earlier. It is recommended to the Chamber of Deputies for consideration and approval.
UM– USEKE.RW.
