Budget projected to increase by Rwf574.5 billion in 2024/2025

By Esther Muhozi
On 7 May 2024 at 09:41

The Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana has revealed that the budget for the fiscal year 2024/2025 is projected to be 5,690.1 billion Rwandan francs (Frw), which represents an increase by 574.5 billion Frw or 11.2% compared to the 5,115.6 billion Frw used in the fiscal year 2023/2024.

He made this announcement on May 6, 2024, while presenting the preliminary budget framework for the fiscal year 2024/2025 to both chambers of the Parliament.

Minister Dr. Ndagijimana pointed out that domestic revenues are expected to be 3,414.4 billion Frw, accounting for 60% of the total budget.

"It is a pleasing step towards self-reliance in budgeting," he stated.Foreign grants are expected to reach 725.3 billion Frw, or 12.7%, while foreign loans are projected at 1,318.1 billion Frw, representing 23.2% of the total budget.

In total, domestic revenues combined with foreign loans, which the country will repay, will account for 83.2% of the fiscal year 2024/2025 budget.

The ordinary budget expenditure is expected to reach 3,421.2 billion Frw, which is 60% of the total budget, while funds allocated for development and state investments will amount to 2,268.9 billion Frw, or 40% of the total budget.

Dr. Ndagijimana stated that selected activity programs are based on their alignment with the development goals we have set, which are included in the Government’s agenda to accelerate development and address the impacts of climate change on the economy and other external challenges.

"There were discussions between the Ministry of Finance and Economic Planning and all government entities regarding planning and the next fiscal year’s budget to ensure agreement on the activities and projects that will be prioritized during that year and the medium-term before approval by the cabinet. The funds have been allocated based on the objectives of the three pillars of the government’s agenda to accelerate development," he said.

Rwanda’s economy is expected to grow by 6.6% in 2024, and by 6.5% in 2025.The growth rate will reach 6.8% in 2026, and in 2027, it is projected to increase to 7.2%, all based on global political and economic issues.

Agricultural sector output is expected to grow by 5% in 2024, compared to a 1% increase in 2023. Meanwhile, industrial output is expected to increase by 8.9% in 2024, compared to 10.9% in 2023.

The service sector output is expected to grow by 6% compared to an 11.2% increase in 2023. Market prices are expected to rise by an average of 5% in 2024 compared to a 14% increase in 2023.

Dr. Ndagijimana affirmed that this decrease in market prices will be "due to a significant reduction in food prices this year."

In 2024, Overall balance of payments is expected to register a surplus of USD 196.4 Million from USD 107 Million of 2023.

"It will primarily be due to an increase in exports, including goods and services, as well as an increase in foreign loans obtained by the government, remittances from Rwandans abroad, and foreign investments."

In the medium term, economic policies will focus on increasing domestic revenue, including tax law reforms and other forthcoming adjustments.

Key activities will include increasing agricultural and livestock production and activities that help the country store produce to achieve food self-sufficiency.

The job creation program will focus on supporting local industries to adopt technology, implementing basic infrastructure in industrial zones, and providing loans.

Dr. Ndagijimana also said that efforts will be made to build power plants, alongside extending electricity to households.

In infrastructure, there will be continued efforts to repair various roads and extend road networks, including building the Rusizi port on Lake Kivu.

In the pillar of social welfare, efforts will include increasing water supply networks in urban and rural areas, expanding the Karenge water plant, and others.

In health, the focus will be on repairing and expanding major hospitals such as Kabgayi and Muhororo and enhancing the capacity of Masaka Hospital to become a university hospital, as well as strengthening the health sector to combat non-communicable diseases and epidemics.

In education, the focus will be on improving the quality of education, supporting school feeding programs, placing new teachers at all levels, and promoting vocational and technical education.

Technology initiatives will include extending it to various institutions that currently lack it, including schools

Dr. Ndagijimana presenting the draft budget to members of the Parliament.