Rwanda plans to increase its 2020/2021 budget by 6.7%. This was announced on Thursday, February 11, by Uzziel Ndagijimana (pictured), during a virtual session with the Parliament.

The move will see the budget increase from 3,245 billion Rwandan francs ($3.2 billion) to 3,464 billion Rwandan francs ($3.4 billion). The objective is to strengthen public spending in different sectors of the economy, after the 0.2% contraction recorded in 2020.

The extra resources will mainly be pumped into the fight against the coronavirus pandemic. Part of the amount will also be dedicated to the acquisition of equipment to support the practical training of students, while helping the government pay its debts and increase its investments.

Minister Uzziel Ndagijimana said the budget review process has been influenced by the economic and fiscal results for the first quarter of 2020/21, which include the assessment of the economic effects of covid-19 and the support granted to vulnerable households and enterprises.

To finance the anticipated increase in spending, the authorities expect an improvement in domestic resources by 1.1%, as a result of better fiscal performance.

However, during a health crisis that has affected the turnover of many companies, concerns remain about the state's ability to achieve the tax collection rate necessary to finance this new increase in spending.

The official also revealed that the government is also counting on a swift economic recovery which should allow the country to reach a growth of 5.7% in 2021. A recovery that could result in an improvement in the mobilization of domestic revenue. However such pace of recovery is dependent on how quickly the second wave of infections currently hitting the African continent is brought under control.

Moutiou Adjibi Nourou