Rwanda raises domestic financing to 68.3pct in 2019/2020 Budget

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The government plans to spend Rwf2,876.9 billion in the 2019-2020 Fiscal year due to start on July 1.

Presenting the budget to both chambers of parliament in Kigali on Thursday, the Minister of Finance and Economic Planning, Uzziel Ndagijimana said domestic resources are expected to finance 68.3 percent, up from 67 percent in the current budget.

Domestic resources including domestic borrowing are Rwf1,963.8 billion, which is 68.3 percent of the total budget for fiscal year 2019/20.

External grants are Rwf409.8 billion, which is 14.2 per cent of the total budget while external loans total to Rwf497.0 billion, which is 17.3 per cent of the total budget, according to the budget speech.

The total domestic resources and loans combined account for 85.8 per cent of the entire budget of 2019/2020 fiscal year, which is a good indication towards our objective of self-reliance, said Ndagijimana.

The next fiscal year’s budget represents an increase of Rwf291.8 billion compared to Rwf2,585.1 billion in the 2018-19 revised budget.

Tax revenue collections were projected at Rwf1,535.8 billion which accounts for 53.4 percent of the total budget while non-tax revenue was estimated at Rwf190.4 billion, representing 6.6 percent of the total budget.

The minister highlighted key measures through which the projected revenue will be collected.

These include revision of the law whereby every person carrying out commercial activities would have to use the new e-billing machines “EBM for all”, expanding the coverage to non-VAT registered persons and improving tax compliance.

He also outlined several incentives which he said remained the same like in the current budget in line with supporting the population to access basic needs and promote Made in Rwanda.

Under these rice will pay import duty rate of 45 percent or $345 per metric ton instead of 75 percent; sugar will pay import duty rate of 25 percent for 70,000 metric tons, instead of 100 percent or $460 per metric ton.

Road tractors for semitrailers will pay duty rate at 0 percent instead of 10 percent while motor vehicles for transport of goods with gross weight exceeding 5 tons but not exceeding 20 tons will pay Import Duty Rate of 10 percent instead of 25 percent.

Motor vehicles for transport of goods with gross weight exceeding 20 tons will pay import duty rate of 0 percent instead of 25 percent; buses for transportation of more than 25 persons will pay import duty rate of 10 percent instead of 25 percent.

Buses for transportation of 50 persons and above will pay a duty rate of 0 percent instead of 25 percent, while capital machinery and raw materials used in manufacturing of textile garments and footwear will pay import duty of 0 percent instead of 10 percent or 25 percent.

Telecommunication equipment will pay import duty rate of 0 percent instead of 25 percent while raw materials used in industries will pay 0 percent instead of 10 percent or 25 percent.

Used clothes will pay 4 per cent per kilo instead $2.5 per kilogram, while used shoes will pay $5 per kilogram instead of $0.4.

Expenditure on development projects is projected at Rwf1,152.1 billion which represents 40 percent of the total budget, while recurrent expenditure is estimated at Rwf1,424.5 billion or 49.5 percent of the total budget to cover payment of salaries especially for teachers.

The economic transformation pillar was allocated Rwf1,636 billion, amounting to 56.9 percent of the total budget.

The key interventions will include contributing to the creation of 213,198 productive and decent jobs, supporting on-job trainings of 3,300 people and supporting and empowering youth and women to create business through entrepreneurship and access to finance.

Social transformation will take up Rwf781.7 billion while transformational governance was allocated Rwf458.7 billion or 15.9 percent of the total budget.

Energy development and access to electricity were allocated Rwf143.4 billion to enable electricity connectivity to 500 productive users including schools, health centers.

Agriculture sector was allocated Rwf155.8 billion, to cover implementation of irrigation technology, promotion of the agriculture research and operalization of agriculture insurance scheme among other things.
Improving access to quality education for all was allocated Rwf310.2 billion.

Specific interventions cited include construction and rehabilitation of classrooms countrywide, construction and equipping of TVET schools, enhancing the use of ICT in education and teacher training.

To increase access to quality health government allocated Rwf230.9 billion to facilitate construction, rehabilitation and equipping hospitals in different district hospitals.

On poverty fight, government allocated Rwf147.3 billion to facilitate cattle stocking program of One Cow per family (Girinka Program); and increasing the coverage of programs designed to support vulnerable households.

Rwanda’s economy is expected to grow by 7.8 percent in 2019, 8.1 percent in 2020 and 8.2 percent in 2021 driven by agriculture and infrastructure, the minister said.

Government expenditure policies in fiscal year 2019-20 will be guided by National Strategy for Transformation priorities and objectives while ensuring appropriate allocation to enhance service delivery across sectors, according to the minister.

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