By Eugene Kwibuka
Government will spend 50 per cent of the planned Rwf1.6 trillion in the
2013/2014 fiscal year on strengthening drivers of economic
transformation set out in the second Economic Development and Poverty
Reduction Strategy (EDPRS II).
Finance minister Gatete (L)chats with
Bernard Makuza, the Senate Vice president in charge of political
affairs, before the session. The New Times/ Timothy Kisambira.
The Minister for Finance Amb. Claver Gatete disclosed this while
presenting the Budget Framework to a joint session of Members of
Parliament (Deputies and Senators) on Tuesday.
Amb. Gatete, told lawmakers that government plans to invest Rwf 818
billion in areas of economic transformation, rural development,
productivity and youth employment, as well as accountable governance.
The government has identified the areas as the main pillars of EDPRS II,
which seeks to fast-track the country’s progress towards attaining
middle-income status by the year 2020.
“If we believe that this (EDPRS II) is a programme that is going to
contribute significantly to Vision 2020 then we must show it by making
sure that we make money available for this programme.
That’s why it has taken 50 per cent of the entire national budget for
the fiscal year 2013/2014,” Amb. Gatete said in an exclusive interview
with The New Times shortly after addressing parliament.
In line with the plan, the government will significantly invest in
infrastructure and energy projects. These range from the electrification
and construction of feeder roads and model towns in rural areas to
improving RwandAir fleet and empowering Rwandans in the private sector
with enough skills to manufacture more goods and provide more services
for exports, while building a more accountable government system.
“This is a government commitment; it’s the government way of telling
ordinary Rwandans that it means what it says. In other words, if it
approves a programme, it has to make sure that the money is available,”
Amb. Gatete said, emphasising that the country needs to scale up
investment in infrastructure if “we need to grow”.
Last month, the country’s top leaders resolved to focus attention in the
next five years to improving the country’s energy sector, transport
services, urbanisation, and vocational training.
EDPRS II aims at achieving 11.5 per cent annual economic growth over the
next five years. The country’s GDP per capita is projected to increase
from the current $644 to $1,240 by the year 2020.
Parliamentarians urge self-reliance
If plans laid out in the budget framework are approved, the Government
expenditure will rise to Rwf1.6 trillion in the 2013/2014 fiscal year,
up from about Rwf1.4 trillion this fiscal year.
The government has stated that the main objective of the next budget in
the face of declining aid is to increase domestic tax revenue
collections by an average of 0.2 per cent of GDP and limit new domestic
debt to 0.6 percentage of GDP. In the next fiscal year, the government
hopes to collect Rwf 816.6 billion (15.25 per cent of GDP) in tax
revenues and Rwf 67.5 billion (1.3 per cent of GDP) in non tax revenues.
While many of the lawmakers during Tuesday’s session commended the
government’s poverty reduction plans, they also urged the finance
minister to clearly explain how Rwandans will become self-reliant while
they continue to import more than they export, only a small number of
them pay the country’s taxes, and graduates of government-funded
vocational training centres bristle under limited access to financing.
In response, the minister said the government plans to broaden the tax
base by tapping into the potential of the informal sector as well as
boosting the ability of citizens to produce more goods and services for
export.
The parliamentarians have a few days to submit their comments on the
budget framework before the government can produce its final budget bill
for the fiscal year 2013/2014, which will be brought back to the
legislative house next month.
Source: The New Times
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