The Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana yesterday presented to both chambers of parliament, the Budget Framework Paper (BFP) and the midterm budget estimates for 2017/18 -2019/20.
BFP is a document outlining government economic policies over the medium term that helps lay the foundations of the next fiscal budget.
Minister Ndagijimana told Parliamentarians that the policies and strategies over the medium term are built on Government’s aspiration to transform Rwanda to high income economy and ensure high living standards of Rwandans by the middle of the 21st century. This is reflected in the blue print of the Vision 2050 as well as 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.
Minister Uzziel further noted that 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 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 said.
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.
The proposed total budgeted resources for fiscal year 2018/19 amount to Frw 2,443.5 billion, which is Frw 328.2 billion higher compared to Frw2,115.3 in the 2017/18 revised budget. The 2018/19 domestic resources are projected at Frw 1,646.4 billion, representing 67% of the total budget. Total tax revenues are projected at Frw 1,353 billion, non-tax revenues at Frw 155.7 billion, Domestic Borrowing is projected at Frw 129.1 billion while Frw 8.6 billion will come from the use of government deposits. External grant is estimated at Frw 396.3 billion while total external loans are projected at Frw 400.9 billion. Domestic resources and external loans will account for 84% of the total budget while 16% will come from grants which is in line with government ambition of self-sustenance.
On the expenditure front, the recurrent budget is projected at Frw 1,305.7 billion while development expenditure is estimated at Frw 897.1 billion. Net lending is projected at Frw 190 billion which will be used to finance key government porjects such as the construction of Bugesera airport, expansion of Rwandair operations, export promotion activites among others. Frw 27.2 billion will be used for payment of arrears while Frw 23.5 billion will be used to accumulate government deposits.
The allocation of resources in the budget for 2018/19 fiscal year and the medium term is therefore guided by interventions in NST1. These will include creation of off-farm Jobs, promotion of urbanization to enhance economic transformation, promotion of competitive knowledge based economy, industrialization and export promotion, domestic savings promotion, increased agriculture and livestock production and productivity, sustainable management of Natural resources among others.
The Budget Frame work paper will provide the basis for the preparation of the 2018-19 budget which will be read in June 2018. The resource allocation is line with National Strategy for Transformation priorities.