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FISCAL DECENTRALISATION: PERFORMANCE IN THE MINI BUDGET 2009 AND GENERAL PROGRESS UP TO DATE

FISCAL DECENTRALISATION: PERFORMANCE IN THE MINI BUDGET 2009 AND GENERAL PROGRESS UP TO DATE. Christophe Nsengiyaremye Acting Coordinator IGFR. OVERVIEW OF THE PRESENTATION. INTRODUCTION FISCAL PERFORMANCE FOR THE MINI BUDGET 2009

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FISCAL DECENTRALISATION: PERFORMANCE IN THE MINI BUDGET 2009 AND GENERAL PROGRESS UP TO DATE

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  1. FISCAL DECENTRALISATION: PERFORMANCE IN THE MINI BUDGET 2009 AND GENERAL PROGRESS UP TO DATE Christophe Nsengiyaremye Acting Coordinator IGFR

  2. OVERVIEW OF THE PRESENTATION • INTRODUCTION • FISCAL PERFORMANCE FOR THE MINI BUDGET 2009 • OTHER MAIN ACHIEVEMENTS IN THE MINI BUDGET FISCAL YEAR AND PROGRESS UP TO DATE • CURRENT CHALLENGES AND WAY FORWARD

  3. INTRODUCTION • During the half-year, up to 30 June 2009, local government institutions received a total of Billion RwF 62.3 from the Central Treasury in the form of cash transfers and direct payments; • Local government institutions generated revenue internally through collections of various taxes, fines and fees amounted to Billion RwF 11; • Overall, local government institutions had total revenues amounting to Billion RwF 76.1 including grants from Donors.

  4. INTRODUCTION (CONT’D) • Consolidated district’ expenditures amounted to Billion RwF 76,6 with Billion RwF 32,4 for wages and salaries, the remaining amount allocated in transfers to sectors and other non-budget agencies, capital expenditure and other goods and services; • The consolidated district’s closing balance amounted to Billion RwF 12,2; coming mainly from 2007 where amounted to RwF 11,4.

  5. FISCAL PERFORMANCE FOR THE MINI BUDGET PERIOD 2009

  6. RESOUCES PERFORMANCE

  7. REVENUE PERFORMANCE PER DISTRICT

  8. REVENUE PERFORMANCE PER DISTRICT (CONT’D)

  9. REVENUE PERFORMANCE PER DISTRICT (CONT’D) • Average execution was 79%. • Least performing districts with an execution of 37% :Nyarugenge due to the low predictability of resources from donor (4%) and central government :CDF, ...(49%) • High performing district with an execution rate of 139%: Muhanga, performing due to the excess funding from CG and donor (received 1,021,966,178 against 56,500,000 budgeted)

  10. RESOURCES AS ALLOCATED ON EXPENDITURE CATEGORIES

  11. RESOURCES ,EXPENDITURE AND CLOSING BALANCE PER DISTRICT

  12. RESOURCES ,EXPENDITURE AND CLOSING BALANCE PER DISTRICT-CONT’D

  13. RESOURCES ,EXPENDITURE AND CLOSING BALANCE PER DISTRICT-CONT’D

  14. RESOURCES ,EXPENDITURE AND CLOSING BALANCE PER DISTRICT-CONT’D • During the fiscal period, expenditures exceed resources by RwF 0.5 Bn, • Wages and salaries get 43% of total resources, capital receive 19%, G&S receive 16% and transfers to the non budget agencies take 18%; • At the end of the fiscal period, district have different closing balances: Kigali City have the big deficit (RwF -0.6 bn) and Rusizi have the big positive balance (RwF 1.5 Bn)

  15. EARMERKED TRANSFERS PERFORMANCE

  16. Transfers performance per District

  17. Transfers performance per District

  18. Transfers performance per district

  19. Earmarked Transfers performance per district • Average execution was 92%. • Least performing districts with an execution of 83% :Ruhango and Ngoma • High performing district with an execution rate of 100%: Nyarugenge

  20. Earmarked Transfers performance per programme-million rwf

  21. Earmarked Transfers performance per programme-miosrwf

  22. Earmarked Transfers performance per program • Minijust, Mininter, Minaloc, Minagri, Mininfra, Mijeprof and bloc grant programs were executed 100%; • All programs perform very well with an average of 92%;

  23. OTHER ACHIEVMENTS AND GENERAL FD PROGRESS UP TO DATE

  24. MAIN ACHIEVMENTS IN MINI BUDGET PERIOD • Inventory of the teachers salaries and ex-communes arrears; • District officials capacity building in PFM: MUSANZE, HUYE and KIGALI CITY DISTRICTS (budget and planning, procurement, accounting, etc. • All executives Secretaries trained in procurements; • DISTAX software developed and under test in Kigali City.

  25. MAIN PROGRES UP TO DATE The GoR has taken a number of important steps in moving the Fiscal Decentralization agenda forward: • Vision, policies, laws, and medium term plans have been formulated and functions have been progressively decentralized followed with financial resources; • Strengthen & Harmonization of planning and budgeting cycle between central and local levels; • Definition of clear guidelines governing intergovernmental financial relations • Strengthen technical capacity in Planning, Financial Management, and Financial Control at the local level

  26. MAIN PROGRES UP TO DATE-CONT’D Increased intergovernmental earmarked transfers as follows: • 2006 - 35.8Bn (Earmarked) • 2007 - 56.3Bn (Earmarked) & 8.3Bn (Block grant) • 2008 - 74.3Bn (Earmarked) & 11.3Bn(Block grant) • 09/10 -78.3Bn (Earmarked) & 16.4Bn (Block grant) With existing laws and regulations (the OBL, law on district source of revenue, the presidential Order on fees to be charged by District,…), The local authorities have powers & autonomy to administer, collect, and set rates for local taxes and other fees;

  27. MAIN PROGRES UP TO DATE-CONT’D • Enhanced support to CDF (10%) and Block grant (3%-5%); • Modern, efficient and coherent financial mgt systems at the local level ( SAGE PASTEL, SIBET/SMARTGOV); • Summarized District Budget appear in Annual Finance Law and annual financial report provided

  28. CHALLENGES AND WAY FORWARD

  29. Challenges • Low capacity in financial management & Accounting systems at local levels; • Challenges of increasing revenue mobilization by LGs; (limited materials and human resources, narrow and limited tax base, lack of information management systems); • High staff turnover ;

  30. Challenges-Cont’d • No harmonization of transfers mechanisms (Some ministries transfers directly to districts ) • Regularity and quality of in year District budget execution report due to lack of use of SmartGov software • Low predictability of revenues from the CG to the LGs & direct funding from Donor

  31. Way forward • Intergovernmental Transfers mechanisms being reviewed and updated (harmonization and predictability to districts) • Fiscal Decentralization Strategy under development; • Installation of Tax Management Systems (TMS) in Districts for effective taxpayers management; • Improve predictability of sources of revenues from the CG to the LGs & from other extra budgetary support, eg direct funding from Donors. • Capacity building for District to enhance resource mobilization-Situation analysis already done; • Capacity building for district in PFM; • SmartGov software fully implemented in all district and utilized;

  32. Conclusion Challenges exist in districts and there will be a continuous support from different stakeholders to improve the district financial situation

  33. Thank You

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