FinMin Claver Gatete outlines 2014/2015 Budget
Minister for Finance and Economic Planning, Claver Gatete, has presented his 2014/2015 Budget to a joint plenary session of Members of Parliament and Senators in Kigali. In the budget speech the Finance Minister announced that the government would spend RwF 1.75 trillion in the next financial year, an increase of RwF 75.5 billion on the RwF 1.6 trillion in the 2013/14 revised Budget.
Revenue will be sourced from RwF 1.08 trillion in domestic resources with projected tax revenue Rwf 906.8 billion and non-tax revenue at RwF 79 billion. Finances from external sources will be RwF 667.6 billion or 38% of the total Budget.
You can find the full speech in Kinyarwanda (Rwandan language) here.
The government press release on the budget as published on the Finance Ministry website is as follows:
“Infrastructure and export promotion among top priorities of 2014/15 Budget
Government plans to spend RwF 1.75 trillion in the 2014/15 fiscal year representing RwF 75.5 billion increase compared to RwF 1.6 trillion in the 2013/14 revised budget.
Total domestic resources are estimated at RwF 1.08 trillion which accounts for 62% of the total budget. These include tax revenue worth RwF 906.8 billion, non-tax revenue worth 79 billion, domestic financing worth RwF 95.6 billion and net lending worth RwF 4 billion. External resources are projected at RwF 667.6 billion which accounts for 38% of the total budget. Total grants account for RwF 544.8 billion representing 31% while total external loans equal RwF 122.8 billion representing 7%.
On the expenditure side, total recurrent expenditure for 2014/15 is projected at RwF 864.5 billion or 49% compared to RwF 799.9 billion in the 2013/14 revised budget. The expenditure on development projects for 2014/15 is projected at RwF 784.1 billion or 45% of the total budget compared to RwF 758.8 billion in the 2013/14 revised budget. Net Lending is estimated at RwF 104.7 billion or 6.0% of the total budget. This compares with RwF 118.9 billion in the 2013/14 revised budget.
The 2014/15 budget is projected to close with an overall cash deficit of RwF 177.2 billion which is lower than the revised 2013/14 budget of RwF 271.2 billion by RwF 94 billion. This deficit will be financed with net foreign loan receipts of RwF 107.6 billion while the domestic borrowing will contribute RwF 69.6 billion.
The budget whose theme is “Infrastructure development to accelerate export growth” reflects government’s focus on implementing strategic policies aimed at addressing the infrastructure needs in order to increase export of goods and services.
Priority areas under the EDPRS2 to be funded in the 2014/15 budget include energy, agriculture, exports promotion, urbanization & rural settlement, employment programme & skills development including TVET, social protection & graduation and promotion of green economy.
This year’s expenditure projections are tied to the emerging priorities grouped under the EDPRS2 thematic areas of Economic transformation for rapid growth, Rural Development, Productivity and Youth Employment creation as well as Accountable Governance. These thematic areas have been allocated RwF 915 billion representing 52% of the total budget.
To sustain achievements made in EDPRS1 and build the foundation of EDPRS2, resources worth RwF 622.9 billion (36% of total budget) have been allocated to foundational issues. Similarly, to ensure sector coordination and service delivery by thematic areas and foundational sectors resources worth RwF 215.3 billion (12% of total budget) has been allocated to support functions.
Under the thematic areas, economic transformation has been allocated RwF 438.9 billion (25%) of the total budget. Its objective is to sustain rapid economic growth and facilitate the process of economic transformation by increasing the internal and external connectivity of the Rwandan economy.
Rural development thematic area was allocated RwF 252.8 billion (14% of the total budget). It focuses 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.
Productivity and youth employment accounts for RwF 170.3 billion, which is 10% of the total budget. Its objective 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.
Accountable governance has been allocated RwF 53.1 billion (3%). Its objective is to enhance accountable governance by promoting citizen participation and mobilisation for delivery of development, strengthening public accountability and improving service delivery.
The 2014/15 budget is consistent with the medium term fiscal framework. It continues the policy started in 2013/14 of reducing exemptions by including taxes on project imports in revenues as well as broadening the tax base by including some local Government taxes collected in the districts in Rwanda Revenue Authority collections.”