BUJUMBURA June 6th (ABP) – The Cabinet met on Wednesday June 1, under the chairmanship of the Head of State, Mr. Evariste Ndayishimiye. Several projects were discussed during that council, including the 2022/2023 finance bill. That project is being developed in a specific context of implementation of public finance management reforms, aimed at migrating from the average budget to the program budget.
For that financial year, the draft State budget is therefore transitional with results-based budgeting where budget allocations are made on the basis of well-planned projects/programs/activities in order to be able to migrate completely to budgeting in program mode from of the 2023/2024 fiscal year. That way of budgeting implies that the budgetary appropriations allocated to the activities, through the Annual Work Plan and Budget, constitute a capital investment which will generate interest in terms of the expected results. The 2022/2023 draft State budget, which marks the transition to the program budget, introduces the Annual Work Plan and Budget as a tool for its implementation. To do that, all the ministers and institutions, the personalized administrations of the State, the public establishments of an administrative nature, the companies with public participation and all the municipalities of the country have prepared their budget forecasts by indicating the activities to be carried out with indicators objectively verifiable, to allow monitoring and evaluation of expected results on a quarterly basis.
As part of the 2022/2023 budgetary transparency and traceability, the revenue that was collected by the personalized State Administrations, the public establishments of an administrative nature and other public services operating on the basis of State subsidies, come in taxation managed by the Burundian Revenue Office.
In the sector of agriculture and livestock, the 2022-2023 draft budget places particular emphasis on financing the increase in agro-pastoral production through the subsidy of organo-mineral fertilizers and the production of selected seeds, the cattle herd restocking program for the population grouped in agro-pastoral cooperatives. To encourage producers, a remunerative purchase price for the production will be set to find sustainable solutions related to the problems of crop management. In the field of economic and social infrastructure, in terms of transport, the construction of the railway linking Uvinza-Malagarazi-Musongati [1] Gitega has been highly privileged. In order to finance development projects and youth employment, the Government will provide allocations to the Youth Economic Empowerment and Employment Program and increase the capital in the Youth Investment Bank and the of Impulse, Guarantee and Accompaniment.
This 2022/2023 draft budget provides financial support consisting of the digitization of public services, which is a reform to modernize the collection of public revenue. In an effort to increase revenues, significant measures are planned to ensure that the set objective is achieved.
Thus, the OBR will continue and undertake several actions, in particular the strengthening of the collection of taxes on the activities of the mining sector and the taking of measures to reduce the informal sector through local taxation.
For the 2022/2023 budget year, overall revenue increases from BIF 1,562.06 billion in 2021/2022 to BIF 2,193.6 billion in 2022/2023, an increase of 40.4%. As for expenses, they go from 1,713.8 billion BIF in the State budget, Fiscal Year 2021/2022 to 2,391.08 billion BIF in the draft State budget for Fiscal Year 2022/2023, an increase of 39.5%.
The overall deficit of the 2022/2023 General Budget project amounts to BIF 197.4 billion against BIF 151.8 billion (2.02%) in 2021/2022, an increase of 2.38%.
As part of the execution of the said budget, a quarterly expenditure commitment plan will be prepared and implemented based on the annual work plans and budgets of the ministries and institutions, and a rolling cash flow plan. The quarterly commitment plan will be validated by the Council of Ministers. All budgetary expenditure must be subject to the prior authorization of the Minister having Finance in his attributions and executed taking into account the available resources. After exchange and debate, this bill was adopted with recommendations to specify that the payment of school and academic fees or any other transactions must be made in local currency, bring the renewal costs of IT plates to 300,000 BIF, Project vehicles that will be transferred to the State after their closure must pay plate fees like other vehicles, revise the law governing income tax to broaden the category of taxpayers, carefully study the system collection and marketing of food products to fight against rising prices,…
The Cabinet meeting also analyzed the Note on the participation of BANCOBU in the share capital of the Burundi Stock Exchange. After the promulgation of the 2019 law governing the capital market in Burundi and the 2020 law governing the Capital Markets Regulatory Authority in Burundi, the activities of the Capital Market are centered on the stock market. The stage currently underway concerns the establishment and operationalization of this market, by setting up a mixed company called “Burundi Stock Exchange”, whose role will be to manage the stock market, to help and control the purchase and sale of securities. The Burundi Stock Exchange will be established as a commercial entity, registered under the Code des Sociétés Privées and with public participation. On December 1, 2021, the Central Bank wrote a letter to BANCOBU to request its subscription to the share capital of the Burundi Stock Exchange. The same correspondence was sent to all commercial banks carrying out these activities in Burundi. The BANCOBU Board of Directors voted for the subscription of five hundred million Burundian francs (500,000,000BIF) out of a total capital of 2,500,000,000 BIF. That note has been prepared to collect the orientation of the Council of Ministers, as well as the non-objection for the following procedures.
At the end of the analysis, the Council of Ministers gave its agreement for BANCOBU to participate in the Social Capital of the Burundi Stock Exchange and to move on to the next steps.