The Government has proposed to increase total public spending by Rwf633.6 billion, from Rwf3,807 billion in the original budget presented mid-last year, to Rwf4,440.6 billion. According to the proposed revised budget presented to parliament on Monday February 7, the increment represents 16.6 per cent of the original budget for 2021/22. In general, the additional amount will help public institutions to discharge their responsibilities, help implement public projects including in areas of health, education, agriculture, and access to electricity. The proposal was presented in a virtual session by the Minister of Finance and Economic Planning Uzziel Ndagijimana and its relevance was approved and will be sent for scrutiny to the Committee on National Budget and Patrimony. Ndagijimana said that the review of the budget took into account the strategies to tackle the effects of the Covid-19 pandemic, and the budget execution in the first months of the current fiscal year which began on July 1, 2021. Moreover, he said that the review considered the funding gaps that were identified in different institutions in order to enable them to fulfill their responsibilities in the current fiscal year. “These amendments were agreed upon by all the concerned entities, which give hope that the revised budget for the 2021/2022 fiscal year will be executed as planned,” he said. It is expected that domestic revenues will increase by Rwf155 billion from the earlier projected Rwf1,993 billion in the original budget to Rwf2,148 billion representing a 7 percent increase. This, the minister said, is attributed to additional taxes and other revenues expected following the recovery of economic activities [from the Covid-19 impact]. Tax revenue is projected to increase by Rwf42.4 billion or 2.4 percent from Rwf1,717.2 billion projected in the original budget to Rwf1,759.6 billion. Non-tax revenue will increase by Rwf112.6 billion or 40.7 percent from Rwf275.8 billion to Rwf388.2 billion. Grants are expected to increase by Rwf5.4 billion from Rwf612.2 billion in the original budget to Rwf637.6 billion. For loans, they are expected to increase from Rwf651.4 billion to Rwf1,469.7 billion on the account of Eurobond as well as resources to combat the effects of Covid-19. Regarding capital expenditure, the original budget amount of Rwf1,393.3 billion is being raised by 19 percent (or Rwf262.4 billion) to Rwf1,655.7 billion. Where additional amount will be spent On the expenditure front, the Government projects the recurrent budget to increase by 15.3 percent (or Rwf371.2 billion) from Rwf2,413.7 billion in the original budget to Rwf2,784.9 billion. In general, the budget increment would help public institutions to accomplish their responsibilities, including Rwf12.8 billion for paying salaries for personnel of the entities that had initially received inadequate funding. Funds allocated to public projects are projected to increase by 19 percent from Rwf1,393.3 billion to Rwf1,655.7 billion, implying an addition of Rwf262.4 billion. Such an additional amount is expected to be used in various public projects. They include Rwf4 billion for paying off the outstanding bill on the construction of classrooms, Rwf6.6 billion for road infrastructures, Rwf9 billion for electricity, Rwf1.3 billion for water access, and Rwf36 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 were allocated Rwf7.8 billion. In agriculture, projects among others, the national grain strategic reserves, irrigation, and fertilisers [subsidy] were allocated an additional Rwf6.2 billion. Also, ICT projects were allocated Rwf13.9 billion under to the proposed budget increment. Earlier, in June last year, while analysing the budget, MPs identified 173 funding gaps that required Rwf311.2 billion. Later in the same month, the Parliament adopted the budget in which the Ministry of Finance and Economic Planning considered to cover 152 of those gaps in this fiscal year. MP Phoebe Kanyange said that as Rwf41.5 billion was allocated to cover 56 of those gaps in the first half of the current fiscal year, while the rest will be covered in the revised budget early next year, the Minister should provide an update on the issue. “Among the funding gaps that were identified, how many have been fixed in this budget revision,” she asked the Minister. Minister Ndagijimana said that some of the gaps were fixed, while others are still being considered for funding. MP Marie Therese Murekatete wondered why the budget review does not include the financing to revamp Ruhengeri Referral Hospital, indicating that this action is long overdue. “The current number of the patients seeking health services at the Ruhengeri Referral Hospital has surpassed its capacity,” she said, underscoring the need to expand its buildings and medical equipment. MP Christine Muhongayire commended the Government for the budget increase amid this Covid-19 pandemic, pointing out that it will help grow the country’s economy. “I was not expecting the budget to increase that much during this Covid-19 pandemic. This development indicates the major efforts that the Government of Rwanda made to get finances needed to carry on activities meant for the development of this country,” she said. Rwanda’s economy was expected to grow by 10.2 percent in 2021 after its growth was revised upwards from the initial 5.1 percent. In 2020, Rwanda’s economy fell by 3.4 percent, representing 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 lockdowns that sharply reduced economic activities in 2020.
