Honourable Minister, we know the Ministry of Finance and Economic Planning stands at the cross-roads of economic development of Rwanda and indeed, noticeable strides have been taken by Rwanda in a positive direction. We would like to have your views on some of the developments that contributed to this positive trend and strategies to sustain it or even do better in future.

Q1: First of all what do you consider as the vision of the Ministry of Finance and Economic Planning and what is your mission about?

The Ministry of Finance and Economic planning has a Vision of “Developing Rwanda into a Country Free of Poverty” and a Mission of “Raising sustainable growth, economic opportunities, and living standards of all Rwandans”.

Q2: How do you intend to achieve your mission and is there a framework in place to achieve this mission overtime?

Yes! We have a structured system of work and our internal business processes are built to suit our objectives. In order to pursue our mission and make positive strides towards our vision vision, the Ministry implements a three years rolling strategic plan that portrays the strategic direction of the institution. It is on the basis of these broad strategies, that we develop an annual action plan with clear set objectives as well as deliverables within specified timeframes. Indeed, this provides an in-built monitoring mechanism for the action plan which is the basis for periodical performance evaluation.

We have broadly twelve strategic objectives that are derived from our mission. To achieve any of our objectives, we undertake a number of activities through different Units of the Ministry as well as its affiliated Agencies. And as the mission suggests, the “core business is not to produce wealth” but to create an environment and give support to. These strategic objectives are:

1. Maintain a stable macroeconomic environment with low inflation, moderate budget deficits and sustainable public debt;

2. Foster greater evidence-based planning and performance-based budgeting;

3. Enhance resource mobilization both internally and externally with a view to reducing dependency on aid;

4. Achieve the highest international standards in Public Finance Management (PFM) in order to ensure an accountable use of resources;

5. Improve the delivery of public services and accountability through effective financial and fiscal decentralization;

6. Contribute to increase the productivity of the economy, employment opportunities, the investment climate and the quality of public investments;

7. Contribute to increase living standards of the population and human development within a sustainable environment;

8. Promote a dynamic, efficient and stable financial market accessible to all segments of the population;

9. Contribute to promote a fair and flexible labour market that rewards entrepreneurship and risk-taking behaviours for economic development;

10. Ensure an efficient and equitable tax and benefit system with incentives to work, save and invest in the development of the country;

11. Contribute to foster deep regional integration through openness to change as well as mobility of goods, services, labor and capital;

12. Build MINECOFIN into a strong, efficient and responsive institution.

Q3: What do you consider to be the key achievements in terms of economic development for the year 2007?

As already demonstrated, the activities of the Ministry of Finance are diverse and the impact is sometimes not easily discernible on spot. However, there are a number general performance benchmarks that were achieved, which are worth noting:

1. Strategic positioning of the economy for the medium-term Economic Development. The poverty Reduction Strategy (EDPRS) was prepared, District Development Plans elaborated and high quality statistics disseminated including the EICV report or Household Income Survey report;

2. Preserving macroeconomic stability with low and predictable inflation rate, competitive real interest rates, stable and sustainable fiscal policy and viable Balance of Payments position;

3. Reforming the public finance management to reflect a dynamic economic environment. Disseminated secondary legislations and instructions to implement the Organic Budget Law on State Finances and Property; Reformed the budget processes and strengthened the medium term expenditure framework; enhanced public accounts management and control including dissemination of detailed Financial Management and Accounting policies and procedure manuals as well as the preparation of the first ever consolidated financial statements for the year 2006; Government Audits were revamped including restructuring of internal audit; Public Procurement code was enacted and standard bidding documents prepared and disseminated to all Budget Agencies; the Smartgov system was rolled out to districts and upgraded to accommodate the new Chart of Accounts; Public Expenditure Reviews were conducted in Education, Agriculture, Social protection and Water and sanitation sectors;)

4. Reforming the financial sector, from microfinance to capital markets via improved competitive business and regulatory environment for banks, insurance companies and pension funds;

5. Sustaining improvements of the tax administration and the tax system as well as mobilizing donors’ support around the Government agenda through the EDPRS;

6. Strengthening the private sector development through initiatives like scaling-up of investment in energy, ICT, transport infrastructure; improving investment climate, doing business, and business development services; implementing integrated rural development, with value-adding agricultural specialization; promoting agri-business processing zones, industrial park, and related supporting infrastructure.

7. Deepening fiscal and financial decentralization to improve service delivery within the decentralized government entities. Transfer of funds to districts increased from Rwf 18 billion in 2007 to Rwf 79 billion in 2007 and technical support was periodically accorded to them to ensure the efficient utilization of those funds;

8. Promoting economic coordination, cooperation and economic integration both in the region and at the international level to leverage the economies of scale.

Q4: Despite these good achievements, poverty levels are still high in Rwanda especially in the rural areas. How do you intend to tackle this?

Indeed the number of people living below the poverty line is still big and we are aware of the spread and depth of poverty in Rwanda. But we should also not forget where we are coming from. In the past years, most of the resources have been focused on reconstruction of systems and structures as well as rehabilitation of humans and meager resources have been spent on economic development. However, the trend towards a focus on productive investments is very evident both from policy and operational paradigms. As we move ahead, we have developed the 2008-2012 Economic Development and Poverty Reduction Strategy that contains detailed programs and projects to tackle poverty as well as clear targets and indicators. This is the tool that we hope to use in response to the poverty challenge and it is for me and you to make it happen.

Q5: What have been the constraints and what do you see as bottlenecks in the period ahead?

The constraints witnessed in the year 2007 seem to persist for some foreseeable future and we will need a sustained effort to overcome them. The critical ones include:

1. Insufficient hard infrastructure particularly in transport, communication and energy sectors to facilitate doing business;

2. Inadequate skilled labour force to increase productivity and income;

3. Agricultural practices with minimum value addition that does not match with the modern competitive markets;

4. Random settlement patterns that limit the opportunities for optimal land use particularly mechanized agriculture;

5. Demographic growth rate that is not in tandem with the economic performance of the country;

6. Undeveloped but emerging financial sector with limited capacity to provide financing required for business development;

7. Weak but growing private sector with limited entrepreneurial skills and shallow business culture.

Q6: What are the government’s priorities for the year 2008 and beyond?

Our priorities as we move ahead are driven by our vision and the overall goal is to achieve the objectives of Rwanda Vision 2020. However, our focus this year and in the medium term will dwell on:

1. Building “hard infrastructure” to systematically reduce the operating costs of doing business. The aim is to turn Rwanda into a regional trade and communication hub.

2. Investing massively in skills since it has been identified as one of the key obstacles to stronger growth in Rwanda. The aim is to build a knowledge-based society, as described in Rwanda Vision 2020;

3. Promoting the private sector both financial and non-financial to make the Rwandan business environment the most competitive in the region;

4. Sustaining and accelerating progress in social sectors.

Q7: Economic Integration seem to preoccupy most policy makers today especially in the East African Region. How is economic integration going to make a difference?

Through economic integration, producers, traders and service providers will broaden the prospects for profitable investments. Regional integration can offer new investment opportunities. For example, transformation technologies may not be profitable at a single country level, packaging industries may not break-even with the production of a single country, marketing strategies may not be able to sustain a constant high supply of the highest quality when each country compete for the same shelf space in high-margin markets. Joined-up thinking can widens horizons.

Q8: Do you think the Kenyan Crisis is likely to eat into the progress we made and disrupt our economic performance?

There is limited information at present to determine how the Kenyan crisis will affect our economic performance both in qualitative and quantitative terms. However, based on what we hear and read from the papers suggest that the major impact of the crisis will be through the oil prices and disruption in the transport sector for international trade. To date, the limited shortages and inflationary pressures incurred have been contained and a stable macroeconomic environment has been preserved. However, much will depend on the duration of the crisis. If it persists, then it could have more significant effect on Rwandan economy.

Source: http://www.rwandagateway.org