Rwanda looks for ways to plug cash shortfall

Thursday July 13 2017

Recently, Kigali City Council approved the

Recently, Kigali City Council approved the Rw19.7 billion budget for the fiscal year 2017/18, of which 58 per cent is expected to come from own revenues while 42 per cent is transfers from central government and grants. PHOTO FILE | NATION 

By JOHNSON KANAMUGIRE
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The city of Kigali is exploring options for increasing its revenue to fund a budget shortfall inherited from the last fiscal year.

Recently, Kigali City Council approved the Rw19.7 billion ($23.4 million) budget for the fiscal year 2017/18, of which 58 per cent is expected to come from own revenues while 42 per cent is transfers from central government and grants (32 per cent and 10 per cent respectively).

Figures indicate that the city is running a budget deficit as there is a Rwf1.1 billion gap between estimated net expenditures and financial asset for the year.The city had fallen short of the 2016/17 budget by Rwf4.2 billion ($23.4 million), obtaining only Rwf14.2 billion ($17 million) against the projected Rwf18.5billion ($22 million).

“We are seeking to fill the gap through raising enough own revenues,” said Athanase Rutabingwa, Kigali City Council chairman.

According to city officials, dipping own revenues coupled with delayed grants from international organisations were to blame for the shortfall for the past year.

Among reasons behind the fall of the city’s revenue is the adoption of digital billboards, resulting in the discarding of traditional printed advertising.

According to the Vice Mayor for Economic Affairs Parfait Busabizwa, the city was updating its data on taxpayers as it went about sealing loopholes and reining in defaulters.

Councillors said the city is considering other avenues of incomes such as municipal bonds. It will also consider adjusting the masterplan to include more city land in the residential and taxable bracket.

Projected Rwf11.4 billion ($13.5 million)of own revenues in the 2017/18 fiscal year will be driven by transfers from districts (Rwf8.1 billon), sales of goods and services (Rwf101 million), plots (Rwf2.9 billion) while fines, penalties and forfeits will generate Rwf103.1 million from Rwf97.6 million last year.

Property income will increase revenue to the tune of Rwf18.1 million from Rwf17.8 million last year.

A huge chunk of the city’s Rwf19.7 billion (23.4 million) budget goes to infrastructure, namely transport, urbanisation and rural settlements.