The country's private sector says the government failed to address key funding needs in the recently read budget, which they say is critical to their role in reducing the country’s widening trade imbalance.
The Private Sector Federation (PSF) is particularly concerned that government keeps reducing budget allocation to the Export Guarantee Fund (EGF), which was established to finance SME’s to export Rwandan products to international markets.
In the 2016/2017 financial year, the government allocated Rwf8 billion to the EGF, but last year this reduced to Rwf1.2 billion, and in the recently passed budget only Rwf1 billion was allocated.
“The government needs to reduce the requirements to access funds and also invest heavily in the EGF to enable SMEs to export ‘Made in Rwanda’ products both regionally and internationally,” read the PSF statement.
PSF together with other agencies has been taking advantage of the newly-opened export markets for Rwandan products especially in West Africa, as well as other African markets.
To facilitate this process, PSF opened firm that is currently exporting locally-made products to Congo Brazzaville and will soon export to Pointe-Noire.
PSF said the government should prioritise and increase allocation of funds to ‘Made in Rwanda’ awareness campaigns, exhibitions and other programmes aimed at promoting local products.
Firms in the service sector also underscored how important their sector has become to the economy and urged the government to allocate more resources to the sector if it is to generate the expected gains.
“Governments in the region need to support the tourism sector even more especially at the budget level,” said Carmen Nibigira, the tourism policy analyst and project director at Horworth HTL.
Out of the Rwf2.8 trillion planned for the fiscal year 2019/2020, Rwf1.7 trillion is expected to come from domestic and non-tax revenues, which is an increase of 9.9 per cent from the previous year, reflecting the positive impact of the tax reforms currently being implemented
Budgetary focus on private sector development and youth employment is expected to create 213,198 jobs.