The government has proposed to raise annual national budget from Rwf5,690.1 billion that was approved by Parliament in June 2024, to Rwf5,816.4 billion, an increase of Rwf126.3 billion, the Minister of Finance and Economic Planning, Yusuf Murangwa, said on Wednesday, January 5. He made the announcement during his speech of the revised budget proposal to Parliament. The proposed additional funds were allocated based on the needs for the 2024/2025 fiscal year so that they are effectively met, he observed, telling Members of Parliament that the increase in pension contributions, salaries, agriculture, and infrastructure will account for a bigger share of the resources. ALSO READ: Mandatory pension contributions to double in January According to the Ministry of Finance and Economic Planning (MINECOFIN), the adjustments reflect changes in the resource envelope and aim to enhance resource allocation, support emerging national priorities, and improve public service efficiency. “Rwandan economic growth remains robust amid global uncertainties, including the effects of climate change, global inflation, and geopolitical tensions. This is evidenced by strong growth in the first three quarters of 2024,” Murangwa remarked. “The Government will continue to maintain macroeconomic stability and promote inclusive growth by investing in key areas such as agriculture, climate change, infrastructure, education, healthcare, and social protection,” he added. Changes in revised budget While tax revenue forecasts have been adjusted downward by Rwf20 billion – from the total projected Rwf2,970.4 billion – other revenue sources, including increased privatisation proceeds and external concessional loans will help offset this decrease, MINECOFIN indicated in a statement it issued on Wednesday. ALSO READ: Ten key projects to be funded under proposed Rwf5.7tn national budget The revision includes adjustments in both recurrent and capital outlays (investments in development projects), the ministry indicated, pointing out that the development budget will rise by Rwf80.6 billion, from Rwf2,007.3 billion to Rwf2,087.9 billion. This change affects both foreign and domestically financed capital expenditures allocated under different sectors. “The additional funds were allocated to different activities including agricultural ones especially [government] subsidy on chemical fertilisers; as well as infrastructure,” Murangwa said. ALSO READ: Govt earmarks over Rwf54bn for fertilisers, seeds The recurrent budget will increase by Rwf45.7 billion, from Rwf3,682.9 billion to Rwf3,728.5 billion, primarily due to an increase in pension contributions – as government starts paying more pension contributions for its staff in line with a presidential order approved by the Cabinet on November 9, 2024. “Overall, the additional funding will help finance different programmes, including the provision of government contribution to development activities, filling the gap in social security and salaries of workers, as well as filling the gap in the budget allocated to embassies especially because of the new Embassy opened in Luxembourg,” Murangwa said. ALSO READ: Six things you should know about new pension reforms The ministry indicated that the revised budget for the 2024/25 fiscal year is part of the updated medium-term macroeconomic framework. It also highlighted that the government will continue to closely monitor all components of economic performance that may affect the implementation of the revised budget and will take necessary actions to ensure its full execution while maintaining macroeconomic stability.
