The government of Rwanda plans to spend a proposed budget of more than Rwf7 trillion in 2025/2026 fiscal year, according to the Ministry of Finance and Economic Planning (MINECOFIN).

This amount represents an increase of over Rwf1.2 trillion or 21 per cent compared to over Rwf5.8 trillion approved for the current fiscal year.

The ministry indicated that the budget for 2025/26 and the medium-term until 2028 indicates continued normalisation of fiscal policy for recovery from different crises including the Covid-19 pandemic, the inflation crisis, the May 2023 floods, and the Marburg disease outbreak of 2024.

The budget will also cover the implementation of strategic projects such as the construction of an international airport in Bugesera and RwandAir expansion, while preserving fiscal consolidation, according to MINECOFIN.

While presenting the 2025/26-2027/28 budget framework paper to Parliament on Thursday, May 8, the Minister of Finance and Economic Planning, Yusuf Murangwa, said that the increase in budget will mainly be dominated by fast-tracking the construction of the New Kigali International Airport in Bugesera and the expansion of the national airline RwandAir, as well as implementing recent pension reforms – which took effect in January.

The pension reforms include doubling contributions for employees from the previous 6 per cent of the basic salary to 12 per cent of their gross salary. This implies that the government has to spend more on paying the due contributions for public servants.

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Projection of domestic resource mobilisation

As per data from MINECOFIN, domestic revenues are projected to amount to more than Rwf4.1 trillion (or 58 per cent of the total budget estimates) in 2025/26, which reflects an increase of 19 per cent compared to more than $3.4 trillion for the current fiscal year (or 59 per cent of the total spending for 2024/25).

Domestic resources comprise over Rwf3.6 trillion from tax revenue, which is Rwf677.6 billion or nearly 23 per cent higher than over Rwf2.9 trillion budget of 2024/25, and Rwf477.2 billion from other revenue collection.

MINECOFIN indicated that the increase in the tax revenue projection will reflect the current and expected good performance of economic activities with the effect from the recently approved tax policy reforms and other tax measures under the medium-term revenue strategies.

External resource projection

According to the budget framework paper, domestic resources will be supplemented by external resources expected to reach an estimated more than Rwf2.7 trillion. This amount comprises Rwf585.2 billion from grants and over Rwf2.1 trillion from loans.

The projected external loan amount for the coming fiscal year 2025/26 will be Rwf648.4 billion higher compared to more than Rwf1.5 trillion in the revised budget of the current fiscal year.

Grants declined by of 5.7 per cent compared to Rwf621.2 billion of the 2024/25 budget.

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Expenditure outlook

Regarding expenditure for the fiscal year 2025/26, recurrent spending – including expenses on running public office operations and staff remunerations – amounts to more than Rwf4.2 trillion, which is 24.7 per cent higher than the more than Rwf3.4 trillion allocated in 2024/25.

Under this component, the compensation of employees’ category – including salaries and other employment-related benefits – is estimated at more than Rwf1.1 trillion which is 11. 6 per cent higher than the amount in the 2024/25 budget.

This reflects the implementation of recent pension reforms, employment growth in civil servants, horizontal promotion and bonuses as well as the restructuring of different public institutions, MINECOFIN explained.

The envelope for recurrent expenditures includes more than Rwf1 trillion for public debt servicing, which is nearly 40 per cent higher than Rwf766.3 billion that is allocated for the same purpose in 2024/25.

On capital spending side (government investment in development projects), the estimated amount is more than Rwf2.5 trillion for both foreign and domestically financed projects. This includes spending under various equity investment shares projected at Rwf701.8 billion – in entities including the international airport in Bugesera and RwandAir.

Allocation for key sectors

Regarding allocation by sectors, the budget framework paper shows that education was allocated an estimated more than Rwf813 billion, health Rwf462 billion, and agriculture Rwf222 billion.

Rwf251 billion has been earmarked for transport, Rwf201 billion for energy, Rwf165 billion for water and sanitation, and Rwf132 billion for private sector development and youth employment. Some Rwf131 billion has been allocated for environment and natural resources, and Rwf97 billon for Information Communication Technology (ICT).

Key spending priorities

The 2025/26 national budget will prioritise interventions towards the achievement of the goals set under the second National Strategy for Transformation (NST2), according to MINECOFIN.

The priorities include increasing crop and livestock productivity, promoting private investment, job creation and exports, accelerating industrialisation with a focus on manufacturing, promoting sports and creative arts, and expanding electricity generation and access.

Other key aspects include scaling up access to water, sanitation and decent housing, strengthening the transport system, leveraging ICT and innovation to improve service delivery across sectors.

There is also enhancing resilience to environment and climate change through mitigation and adaptation, ensuring access to quality health and education, promoting sustainable graduation from poverty and improving nutrition, as well as enhancing justice system, public service delivery, citizen participation and engagement.

MPs and official comments

MP Odette Uwamariya, the chairperson of the parliamentary Committee on State Budget and patrimony, said that parliament will hold a special session with the Ministry of Finance and Economic Planning to discuss the areas facing funding gaps that should be addressed based on top national priorities.

For example, Uwamariya cited proposed budget Local Administrative Entities Development Agency (LODA), which was halved to a proposed Rwf58 billion in 2025/26 from more than Rwf122 billion in 2024/25.

Rwanda’s agriculture sector was allocated Rwf222.22 billion under the 2025/26 budget estimates, which represents a 4.4 per cent drop from Rwf232.59 billion in the current fiscal year.

While delivering a proposed spending related presentation to the parliamentary Committee on State Budget and Patrimony on May 12, the Permanent Secretary at the Ministry of Agriculture and Animal Resources, Olivier Kamana, said that the budget will finance the execution of various projects for sector growth.

They include agricultural and livestock insurance, which was apportioned Rwf1 billion [as subsidy to farmers], National Strategic Grain Reserve project, which got more than Rwf5.3 billion, and fertiliser and seeds subsidy to lower costs for farmers’ access to such agricultural inputs, which was allotted Rwf55 billion.

The entire infrastructure sector’s annual budget is projected to decrease by 5 per cent to Rwf615.1 billion in in the next fiscal year, from more than Rwf647.9 billion currently, shows data from the Ministry of Infrastructure.

During budget hearings on May 12, the Minister of Infrastructure, Jimmy Gasore, said that the funding will support interventions, including the provision of 100,000 clean cook stoves in 2025/26.

Regarding energy access, Gasore said that the government plans to connect 280,000 more households to electricity. Electricity access among Rwandan households stands at 82 per cent in the current fiscal year.

The infrastructure minister said up to 143 kilometres of tarmac roads, and upgrade 110 more kilometres.