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Rwanda: National budget increased by 16% to more than 4.4 trillion Rwandan francs

The government has proposed to increase total public expenditure by Rwf633.6 billion, from Rwf3,807 billion in the original budget presented mid-last year to Rwf4,440.6 billion.

According to the revised draft budget presented to parliament on Monday 7 February, the increase represents 16.6% of the initial budget for 2021/22.

In general, the additional amount will help public institutions fulfill their responsibilities, contribute to the implementation of public projects, particularly in the areas of health, education, agriculture and access to electricity.

The proposal was presented in virtual session by the Minister of Finance and Economic Planning Uzziel Ndagijimana and its relevance was approved and will be forwarded for consideration to the National Budget and Heritage Commission.

Ndagijimana said the budget revision took into account strategies to combat the effects of the Covid-19 pandemic, and the execution of the budget in the first months of the current fiscal year which started on July 1, 2021. .

Further, he said that the review took into consideration the funding gaps that have been identified in different institutions to enable them to discharge their responsibilities in the current financial year.

“These amendments have been accepted by all the entities concerned, giving hope that the revised budget for the financial year 2021/2022 will be executed as planned,” he said.

Domestic revenue is expected to increase by Rwf 155 billion from the originally projected Rwf 1,993 billion in the initial budget to Rwf 2,148 billion, an increase of 7%.

This, the minister said, is attributed to additional taxes and other revenue expected following the resumption of economic activities. [from the Covuid-19 impact].

Tax revenue is expected to increase by Frw 42.4 billion, or 2.4%, from Frw 1,717.2 billion projected in the initial budget to Frw 1,759.6 billion. Non-tax revenue will increase by Frw 112.6 billion or 40.7% from Frw 275.8 billion to Frw 388.2 billion.

Subsidies are expected to increase by Rwf 5.4 billion from Rwf 612.2 billion in the original budget to Rwf 637.6 billion.

For loans, they should increase from Frw 651.4 billion to Frw 1,469.7 billion on the Eurobond account as well as resources to fight against the effects of Covid-19.

With regard to capital expenditure, the initial budget amount of Frw 1,393.3 billion is increased by 19% (or Frw 262.4 billion) to reach Frw 1,655.7 billion.

Where the extra amount will be spent

On the expenditure front, the government expects the operating budget to increase by 15.3% (or Rwf 371.2 billion) from Rwf 2,413.7 billion in the original budget to Rwf 2,784.9 billion. Frw.

In general, the budget increase would help public institutions to discharge their responsibilities, including 12.8 billion Rwandan francs for the payment of salaries of staff of entities that had initially received insufficient funding.

Funds allocated to public projects are expected to increase by 19% from Rwf 1,393.3 billion to Rwf 1,655.7 billion, an addition of Rwf 262.4 billion.

This additional amount should be used in various public projects.

They include Rwf 4 billion for the payment of the unpaid bill for the construction of classrooms, Rwf 6.6 billion for road infrastructure, Rwf 9 billion for electricity, Rwf 1.3 billion for access to water and Frw 36 billion for public buildings.

The development would also benefit projects in the health sector, including hospitals (Kanombe, Munini and IRCAD – Research Institute Against Digestive Cancer (IRCAD), which have been endowed with RWF 7.8 billion.

In agriculture, projects including national strategic grain reserves, irrigation and fertilizers [subsidy] received an additional allocation of Rwf 6.2 billion.

In addition, ICT projects have received an allocation of 13.9 billion Rwandan francs under the proposed budget increase.

Earlier, in June last year, while analyzing the budget, MPs identified 173 funding gaps that required 311.2 billion Rwandan francs.

Later in the same month, parliament passed the budget in which the Ministry of Finance and Economic Planning planned to cover 152 of these shortcomings in that fiscal year.

MP Phoebe Kanyange said that as Frw 41.5 billion has been allocated to cover 56 of these shortfalls in the first half of the current financial year, while the rest will be covered in the revised budget in early next year, the minister is expected to provide an update on the release.

“Of the funding shortfalls that have been identified, how many have been corrected in this budget review,” she asked the minister.

Minister Ndagijimana said some of the shortcomings have been corrected, while others are still under consideration for funding.

MP Marie Therese Murekatete questioned why the budget revision did not include funding for the reorganization of the Ruhengeri referral hospital, indicating that this action was long overdue.

“The current number of patients seeking health services at Ruhengeri Referral Hospital has exceeded its capacity,” she said, stressing the need to expand its buildings and medical equipment.

MP Christine Muhongayire praised the government for increasing the budget amid this Covid-19 pandemic, stressing that it will help the country’s economy grow.

“I did not expect the budget to increase so much during this Covid-19 pandemic. This development indicates the major efforts that the Government of Rwanda has made to obtain the necessary funding to continue activities aimed at the development of this country,” she said.

The Rwandan economy is expected to grow by 10.2% in 2021 after its growth was revised upwards from the initial 5.1%.

In 2020, the Rwandan economy fell by 3.4%, which represents the first economic slump since 1994. The reason for such an economic slump is the Covid-19 pandemic, including measures to control it, such as the closures that have sharply reduced economic activities in 2020.

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