2009 MINIBUDGET PERFORMANCE Elias Baingana Director General of

2009 MINI-BUDGET PERFORMANCE Elias Baingana Director General of National Budget 1

Presentation Outline 1. Background 2. Resources 3. Expenditures 4. Deficits and Financing 5. Conclusion 2

Background q The budget approved estimated total revenue and grants at RWF 368. 4 bn and total expenditure and net lending at RWF 352. 7 bn projecting a surplus (including grants) of RWF 15. 6 bn. q The approved Budget was revised early in the year to accommodate some priority expenditures including the military operations in the DRC. q As a result, total revenue and grants were marginally projected downwards to RWF 354 bn. Total expenditure and net lending was slightly revised upwards to RWF 358. 8 bn. q The overall balance (including grants) which was originally projected to register a small surplus was now estimated to close with a small deficit of RWF 5. 8 bn. 3

Background q Despite adverse external economic conditions, budgetary performance did not deviate greatly from the revised estimates. q Total Revenues and Grants were RWF 25. 3 bn less than the revised estimates. q Total Expenditure and Net Lending was RWF 7. 9 bn lower than the revised estimates. q The overall deficit (excluding grants) was RWF 6. 4 bn lower than the projected amount of RWF 164. 7 billion. q Primarily due to a shortfall in budget support grants, the overall deficit (including grants) was RWF 17. 4 bn higher than the projected estimate. 4

Resources 1. Domestic Resources: q Tax revenues performed marginally better than expected with excess collections of RWF 5. 5 bn (103. 1% execution rate). q Non tax revenues were RWF 7 bn lower than projected (58. 8% execution rate). The shortfall was mainly due to delays in the accrual of the fertilizer and Identity cards sales receipts. 2. External Resources: q Budget support disbursements registered a shortfall of RWF 23. 8 bn as compared to the revised figures. q Project loans and Grants budgets were revised due to new information becoming available. Out of the projected Rw. F 68. 9 bn, Rw. F 34. 6 billion was received through cash disbursements and direct payments are estimated to account for the remaining Rw. F 34. 3 bn. 5

Expenditures q Total Expenditure and Net Lending remained within the projected limits (by RWF 6. 9 bn) q The total recurrent expenditures were under-spent by about Rw. F 13. 6 bn. q Capital expenditures were almost exactly equal to projections – an under- spend of just RWF 0. 9 bn. q Actual Net Lending of RWF 10 bn was above the projected level of RWF 3. 4 bn by RWF 6. 6 bn. 6

Deficits and Financing q The revised budget projected an overall deficit (including grants) of Rw. F 5. 8 bn instead of a surplus of Rw. F 15. 6 bn as originally projected. q The overall deficit (including grants) at RWF 23. 2 bn was RWF 17. 4 bn higher than the projected figure. q Due to the above developments, the cash needs of the Government rose to RWF 27. 6 bn; q This was financed by RWF 34. 1 bn drawdown of project loans plus an additional draw down of RWF 2. 1 bn of Government deposits; 7

2009 Budget Execution by Economic Inputs q Total expenditures were lower for all categories except Net Lending; q The biggest under spending was on transfers and subsidies mainly due to BNR transfers; q The over-spending on Net Lending was mainly due to replenishment of the Strategic Stocks of petroleum products; q Despite the shortfall in total spending, the target of priority expenditures was met. 8

2009 Budget Execution by Function q Total primary outlays o Wages and salaries for teachers. during the first half of 2009 amounted to RWF o Capitation grant for primary schools and “Tronc Commun”. 294. 7 bn. q Education took largest share; Rw. F 54. 4 bn or 18. 5%. o School Feeding and scholastic materials. o Schools construction and repairs. q Key expenditures were o Transfers for cost-sharing as well as external scholarships. the following: o Vocational and technical training. 9

2009 Budget Execution by Function q Other Gov’t Services o Transfers for running costs for Good Governance and Economic Management institutions. o Issuance of new national identity cards and driving permits. o Debt repayment and interest costs. o Subscription and membership costs. o Funding the activities of the Electoral Commission. took Rw. F 46. 6 bn or 15. 8%. q Key expenditures were the following: 10

2009 Budget Execution by Function q Legislative and Executive Organs took Rw. F 34. 7 bn or 11. 8%. o Inter-Governmental transfers to districts. o Transfers to the Community Development Fund (CDF). q Key expenditures were the following: o Management support to the legislative institutions. o Transfers for salaries and running costs of diplomatic missions. 11

2009 Budget Execution by Function q Defence expenditures took about Rw. F 34. 5 bn or 11. 7%. o Running costs for the military institutions. o Peace keeping operations in Sudan. q PKO and demobilization costs are significant components. q Key expenditures were the following: o Reintegration and demobilization costs. o Internationally agreed DRC operation. 12

2009 Budget Execution by Function q Transport and Communication took Rw. F 23. 9 bn or 8. 1%. q Key expenditures were the following: o Construction of Kicukiro. Kirundo road. o Rehabilitation of Ruhengeri. Gisenyi road. o Construction and rehabilitation of road networks. o Provision of ICT infrastructure. o Feasibility study of the new Bugesera Airport 13

2009 Budget Execution by Function q Public Order and Safety took Rw. F 16. 8 bn or 5. 7%. q Key expenditures were the following: o Running costs for the National Police and Prison Services. o Purchase of equipments for the National Prison Service. o Rehabilitation of prisons. 14

2009 Budget Execution by Function q Health sector took Rw. F 20. 3 bn or 6. 9%. q Key expenditures were o Transfers to district health centres and hospitals for: ü Health workers’ salaries. ü Purchase of drugs and vaccines. the following: ü Purchase of medical equipment. ü Subsidy for “Mutuelle” insurance scheme for the indigents. ü Support to the contractual approach to community health (PBF). ü Pooling risk for health insurance scheme. 15

2009 Budget Execution by Function q Fuel and Energy took o Rw. F 18. 0 bn or 6. 1%. Construction of Rukarara and Nyabarongo hydro-power stations. q Key expenditures were o Rural electrification program. the following: o Lake Kivu gas project. o Purchase of HFO and payment for fuel import subsidies. o Rehabilitation of Mkungwa, Gihira and Gisenyi power stations. o Construction of Kigali–Kiyumba Electrical line. 16

2009 Budget Execution by Function q Agriculture took Rw. F 18. 3 bn or 6. 2%. q Key expenditures were the following: o Importation of fertilizers. o Purchase of improved seeds. o Extension services. o Research projects. o One cow per family project. o Irrigation project. 17

2008 Budget Execution by Function q Water and Sanitation took Rw. F 4. 1 bn or 1. 4%. q Key expenditures were o Rural clean water supply and sanitation projects. o Clean water supply to Kigali from underground sources. the following: o Studies for clean water supply in districts. 18

2009 Budget Execution by Function q Social Protection took Rw. F 8. 8 bn or 3. 0%. q Key expenditures were the following: o Transfers to the Genocide Survivors Assistance Fund (FARG). o Support to Orphans and other vulnerable groups. o Resettlement of returning refugees. 19

2009 Budget Execution by Function q Industry and Commerce took Rw. F 6. 4 bn or 2. 2%. q Key expenditures were the following: o Transfers for running costs of autonomous agencies (RDB). o Free trade zone construction. o Support to rural micro-finance and small and medium scale enterprises. 20

2009 Budget Execution by Function q Land Housing and Community Amenities took Rw. F 2. 3 bn or 0. 8%. o Running costs for the Land Registration Agency. o Compensation for demolished dwellings. q Key expenditures were the following: o Preparation of settlement sites (Viabilization et Bornage) 21

2009 Budget Execution by Function q Environment Protection took Rw. F 1. 6 bn or 0. 5%. q Key expenditures were o Running costs for REMA. o Rehabilitation and protection of river banks and lake shores. the following: o Biodiversity and Landscape protection in districts of Northern Province. 22

Conclusion q It had been projected that the international financial crisis would impact negatively on the mini-budget execution. q This was to be felt by pressures on expenditures whilst reducing revenue collections. q This did not happen, and the fiscal targets were broadly met as planned. THANK YOU 23