Rwanda: Industrialization and Job creation among priorities of the 2018-19 Budget
Government will increase spending by FRW 328.2 billion from FRW 2,115.3 billion compared to the 2017/18 revised budget FRW 2,443.5 billion in the 2018/19 fiscal year, the Minister of Finance and Economic Planning has said.
Presenting the 2018-19 National budget to the joint parliamentary session, Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning pointed out that generally, economic plans enshrined in the 2018-19 budget as well as medium term will focus on job creation through rapid industrialization to drastically reduce the current high rate of unemployment among the youth hence the theme: “Industrialization for Job Creation and Shared Prosperity”, that was agreed upon by all EAC Finance Ministers to demonstrate the region’s total commitment to job creation.
Government expects to finance 67.5% of the 2018-19 budget through domestic resources, 16% through loans and expects 16% to come from grants. Total domestic resources are estimated at FRW 1,645.1 billion, which accounts for 67% of the total budget and this shows an increment of FRW 232.3 billion compared to FRW 1,412.8 billion in the 2017/18 revised budget.
Tax revenue collections are projected at FRW 1,351.7 billion, which show an increment of FRW 151.4 over the revised budget figure of FRW 1,200.3 billion. The non-tax revenue is projected at FRW 155.7 billion, which is FRW 17.5 billion higher than the FRW 138.2 billion in the revised 2017/18 budget.
Minister Ndagijimana also mentioned that the total grants are estimated at FRW 396.3 billion compared to FRW 352.9 billion in the revised budget of 2017/18 and the total external loans are estimated at FRW 402.2 billion in 2018/19 compared to FRW 349.7 billion in the 2017/18 revised budget. He reiterated Government’s continued intention to downscale reliance on donor support but noted its importance towards Rwanda’s development plans. He noted: “Government’s objective is to reduce reliance on external donor support especially where grants are concerned. However, this support remains vital for our development.”
Government expenditure policies in fiscal year 2018/19 are guided by NST-1 priorities and objectives while ensuring appropriate allocation to enhance service delivery across sectors. To this end, recurrent expenditure is expected to increase by FRW 135.4 billion from FRW 1,130.7 billion in the revised budget of 2017/18 to FRW 1,226.1 billion in 2018/19 fiscal year.
Development budget and Net Lending is estimated at FRW 1,126.6 billion in 2018/19 from FRW 960.5 billion in the 2017/18 revised budget representing FRW 166.1 billion increase. Domestically financed development projects expenditure is set to increase by FRW 68.3 billion from FRW 481.3 billion in 2017/18 revised budget to FRW 549.6 billion in 2018/19. This increase, the priority is to complete ongoing projects that will promote growth and job creation in the region.
The 2018/19 draft finance law conforms to the 2018/19 – 2020/21 Budget Framework Paper that was presented to Parliament on April 30, 2018 and was amended to reflect the recommended actions by the Parliament as submitted on May 30, 2018.