By The Inspirer staff writer
The 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 Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana said today, April 30, 2019.
Minister Ndagijimana said that the budget is projected to increase from Rwf2,585.2 billion in revised budget for fiscal year 2018/19 to Rwf2,876.9 billion, in FY 2019/2020, implying an increase of Rwf291.7 billion, and is projected to reach more than 3,560.5 billion in FY 2021/22.
Minister Ndagijimana made the disclosure as he was presenting to both chambers of Parliament, the Budget Framework Paper (BFP) and the midterm budget estimates for 2019/20-2021/22.
“The implementation of Made in Rwanda policy will continue to play a key role in narrowing the current account deficit in the short to long run and help to consolidate private sector domestic activities, create jobs and boost economic growth,” Minister Ndagijimana observed.
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 promotion of made in Rwanda, developing of cross border and trade logistics infrastructure and development of industrial parks among others.
Minister Ndagijimana told Parliamentarians that policies and strategies over the medium term are built on 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 the budget for the fiscal year 2019/20 will reflect medium term fiscal path which allows for an increased spending to reach the first phase of National Strategy for Transformation (NST1) goals while maintaining public debt at sustainable levels.
Components of the budget, sources of its funding
The proposed total resources estimated for fiscal year 2019/20 is made up of Rwf1,726.2 billion of domestic tax and non-tax revenue, domestic borrowing of Rwf237.6 billion, Rwf6.4 billion from net lending and payments, external grants of Rwf409.8 billion and external loans of Rwf497 billion.
Total tax revenue collections have been projected to reach Rwf1,535.8 billion in the fiscal year 2019/20. This amount will exceed the estimated figure of Rwf1,373.1 billion to be achieved in the fiscal year 2018/19 by Rwf162.7 billion while Non-tax revenue collections to the Treasury have been estimated at Rwf190.4 billion; which is 7.9 billion FRW lower than the projected amount of 198.4 billion FRW in the fiscal year 2018/19.
Total expenditures in the fiscal year 2019/20 is projected at Rwf2,876.9 billion, made up of recurrent expenditure of Rwf1,424.5 billion, Development expenditures of Rwf1,152.1 billion, net lending outlays of Rwf244.1 billion, repayment of arrears amounting to Rwf30.6 billion and accumulation of deposits of Rwf25.5 billion.
The resources allocation for 2019/2020 and in 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 Frame work 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.
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