Rwanda Prioritises Infrastructure, Made in Rwanda in 2017-18 Budget

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The Rwandan government will increase spending by Frw 140.7 billion from Frw 1,954.2 billion as indicated in the 2016/17 revised budget to Frw 2,094.9 billion in the 2017/18 fiscal year.

Claver Gatete. Minister of Finance and Economic Planning, Ministry of Finance while presenting the 2017-18 National budget 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.

The East African nation 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.

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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