Rwanda:New 2016/17 Government budget sees foreign grants reduced


The foreign grant is getting involved less and less in the current proposed Government budget year after year as the government seeks to end grant reliance in its future financial plannings.

While presenting Government’s Financial Year 2016/17 revised budget proposal to Parliament, Amb. Claver Gatete, the Minister of Finance and Economic Planning (MINECOFIN) has underlined that grants from foreign countries have reduced by Rwf 38.8 billion from Rwf 365.3 billion in the 2016/17 original budget to Rwf  326.6 billion.

However, this will not stop the government’s new budget from increasing by a  proposed Rwf 3.9 billion net increase in domestic resources from Rwf 1,182.4 billion to Rwf1,186.3 billion.

Government plans to raise spending by Rwf 4.9 billion  from Rwf  1949.4 billion approved by Parliament in June 2016 to  Rwf 1954.2 billion

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Inside the Budget:

Total loans are expected to increase by Rwf  7.4B on account of World Bank loan for agric sector & exchange rate gains

A rise in tax revenues of Rwf  9.8 billion from increased Value Added Tax (VAT) collections as well as increase in non-EAC imports. However, non tax revenues are expected to decrease by Rwf  5.9 billion on account of lower administrative services fees projected.

Government expects Rwf  11.5 billion from sale of stake in I&M bank.The money will be invested as initial equity in the Bugesera Airport.

Government also expects increase in domestic financing by Rwf  20.8 Billion from the use of government bank deposits.

On the expenditure front, government proposes Rwf 47.9 billion rise in recurrent expenditure from Rwf 945.7 billion to Rwf 993.6 billion

Development budget is expected to decrease by Rwf 7.8 billion from Rwf 785.7 billion  approved in the 2016/17 original Budget to Rwf 779.9 billion.

Additional funding has been provided to key domestically funded projects such as Oil & Gas exploration, E-passport, Valley dam, etc

Rwf  1.5 billion to be paid to residents as refund to their properties damaged by previous road contructions in different parts of the country.

Rwf 2.7  billion was increased to the Energy Development Corporation Limited (EDCL)’s current budget.

Rwf  2.5 billion  increased to MINAGRI’s current budget to support the project of seed storage.

Rwf  1.3 billion increased to MINIRENA in implementing to empower a research project on natural resources.

Rwf  700 million  incresed to  Rwanda Agriculture Board(RAB) that will serve to complete seed harvest stocks and animal water feeding.

Rwf  5 billion to be increased on Rwanda Transport Development  Authority (RTDA)’s budget to pay taxes and road consrtuction activities.

Rwf  1 billion will be increased to the National Election Commission’s current budget to help improve presidential election organizations.

Rwf 1.8 billion to be used in demographic censuses that serve to facilitate the government in buget planning.

Rwf  4.9 billion  to be spent on inmates’ everyday life.

Rwf  8 billion to pay teachers’ bonuses.

Rwf 24.5 billion  will be spent on the international peacekeeping activities worldwide.

the governemtn’s net lending  Net lending is expected to increase from Rwf  121.4 billion  Rwf  142.3 billion.

An increased Rwf 24 billion was granted to RWANDAIR  to expand its airline commercial activities including the increase the number of of airplanes to expand its transport destinations.

The budget planning for new institutions that replaced Rwanda Natural Resources Authority (RNRA) will soon be communicated.

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Fred Irakoze

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