MINECOFIN

MINISTRY OF FINANCE AND ECONOMIC PLANNING

REPUBLIC OF RWANDA

Made in Rwanda and Infrastructure given priority in 2017-18 Budget

Posted on 09.06.2017

Government will increase spending by Frw 140.7 billion from Frw 1,954.2 billion indicated in the 2016/17 revised budget to Frw 2,094.9 billion in the 2017/18 fiscal year, the Minister of Finance and Economic Planning has said.

Presenting the 2017-18 National budget to a joint parliamentary session, Minister Claver Gatete pointed out that generally economic plans enshrined in the 2017-18 budget as well as medium term will focus on promoting investments and locally made products hence the theme: “Sustainable growth through infrastructure development and promotion of Made in Rwanda”. In this regard, Minister Gatete noted that Rwanda’s economy is expected to grow by 6.2% in 2017 and 6.8% in 2018.

Resources

Government expects to finance 66% of the 2017-18 budget through resources, 17% through loans and expects 17% to come from grants through budget and project support.

“Government’s objective is to reduce the reliance on external donor support especially where grants are concerned. However, this support remains vital for our development,” Minister Gatete told parliamentarians.

The 2017/18 domestic revenue is projected at Frw 1,375.4 billion (66% of total budget) and rises to Frw 1,738.2 Billion representing 83% of the total budget when combined with loans.

The increase in domestic revenues is attributed to Frw 118.9 billion increase in tax revenue collection from projected Frw 1,081.4 billion to Frw 1,200.3 billion.

Total grants are estimated at Frw 356.7 billion compared to Frw 326.6 billion in 2016/17 revised budget. Total external loans are estimated at Frw 362.8 billion in 2017/18 and Frw compared to Frw 375.1 billion in the 2016/17 revised budget on account of revised projections based on the status of the execution of projects.

Resource allocation under EDPRS2

Resource allocation is line with EDPRS 2 priorities and it is expected to contribute towards attaining EDPRS 2 targets as well as forming the basis for Vision 2050 and EDPRS 3

BUDGET ALLOCATION PER EDPRS 2 PRIORITIES

2017/2018

Amount in Billion FRW

Percentage (%)

I. Thematic Areas

                              1,108.1

53%

Economic Transformation

                                 414.9

20%

Rural Development

                                 348.3

17%

Productivity and Youth Employment

                                 123.4

6%

Accountable Governance

                                 221.5

11%

2. Foundational Sector

                                 986.8

47%

TOTAL BUDGET

                              2,094.9

100%

 

Key Components of Foundational issue

Health

Basic Education

Macro-Economic Stability and Public Finance Management

Justice, Peace and Stability

Food Security and Nutrition

Decentralization

 

Expenditure

Government expenditure policies in fiscal year 2017/18 are guided by EDPRS 2 priorities and objectives while ensuring appropriate allocation to enhance service delivery across sector.

To this end, recurrent expenditure is expected to increase by Frw 131 billion from Frw 994.0 billion in 2016/17 revised budget to Frw 1,125 billion 2017/18 fiscal year. This rise is attributed to increase in wages and salaries of Frw 44.9 billion from the new institutions established and restructured, organization of presidential elections among others.

Development budget is estimated at Frw 772, 7 billion in 2017/18 from Frw 777, 9 billion in the 2016/17 budget representing Frw 5.2 billion reduction. Domestically financed development projects expenditure is set to increase by Frw 26.2 billion from Frw 434 billion in 2016/17 to Frw 460.2 billion in 2017/18. The increase will be used for roads infrastructure development, irrigation projects, key transmission lines, improvement of water supply in both rural and urban areas among other priorities. Net lending is set to increase by Frw 16.8 Billion from Frw 142.3 billion in the 2016/17 revised budget to Frw 159.1 billion in 2017/18 and the focus will mainly on the new Bugesera Airport, Expansion of Rwandair fleet and full operationalization of Air Transport Ltd Company.

The 2017/18 draft finance law conforms to the 2017/18 – 2019/20 Budget Framework Paper presented to Parliament on April 28, 2017 and was amended to reflect the recommended actions by the Parliament as submitted on May 30, 2017.

 

 


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