The government will increase spending in the fiscal year 2017/18 by Rwf 140.7 billion, bringing the revised budget to Rwf 2.09 trillion compared to from Rwf 1.94 trillion for the current fiscal year.
Presenting the budget in parliament on Thursday, Finance Minister Claver Gatete said the budget will focus on promoting investments and locally made products, as expressed in its theme ‘Sustainable growth through infrastructure development and promotion of Made in Rwanda.’
The budget is based on a projected economic growth of 6.2% in 2017 and 6.8% in 2018, compared to 5.9% in 2016.
“The government’s objective is to reduce the reliance on donor support especially where grants are concerned. However, for the time being this support remains vital for our development,” Gatete told lawmakers.
The 2017/18 budget projects domestic revenue at Rwf 1.37tn with an expected Rwf 118.9bn increase in tax revenue from Rwf 1.08tn to Rwf1.2tn.
Total grants are estimated at Rwf 356.7bn compared to Rwf 326.6bn in the 2016/17 budget, and external loans at Rwf 362.8bn compared to Rwf 375.1bn in the current budget on account of revised projections based on the status of the execution of projects.
Government expenditure policies in fiscal year 2017/18 are guided by EDPRS-2 objectives while ensuring appropriate allocation to enhance service delivery.
To this end, recurrent expenditure is expected to increase by Rwf 131bn from Rwf 994.0bn in 2016/17 revised budget to Rwf 1.125tn 2017/18 fiscal year. “This rise is attributed to increase in wages and salaries of Rwf 44.9bn due to new institutions established and restructured organization of Presidential elections among others,” Gatete said.
The development budget is estimated at Rwf 772.7bn in 2017/18 from Rwf 777.9bn in the 2016/17 budget representing a Rwf 5.2bn reduction. Domestically financed development projects expenditure is set to increase by Rwf 26.2bn from Rwf 434bn to Rwf 460.2bn 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,” the Minister said.
Gatete also told lawmakers that net lending is set to increase by Rwf 16.8bn from Rwf 142.3bn in the current budget to Rwf 159.1bn in 2017/18 and the focus will mainly be on Bugesera Airport, the expansion of the Rwandair fleet and full operationalization of Air Transport Ltd company.