The government plans to spend more than Rwf7 trillion in the forthcoming 2025/2026 fiscal year, an increase of over Rwf1.2 trillion or 21 per cent compared to over Rwf5.8 trillion approved for the current fiscal year (2024/2025). The update was provided on Thursday, May 8, by the Minister of Finance and Economic Planning, Yusuf Murangwa. He was presenting to Parliament the Budget Framework Paper (BFP), a medium-term guide outlining Rwanda’s macroeconomic and fiscal policy directions and priorities for the period 2025/26 to 2027/28. He said that the increase in budget will be mainly driven by fast-tracking the construction of new Kigali international airport, located in Bugesera, expanding national carrier RwandAir expansion, as strategic investments, as well as implementing the recent pension reforms. ALSO READ: Pension contributions: Gov’t to spend Rwf45bn more for public servants Information from the Ministry of Finance and Economic Planning (MINECOFIN) shows that the increment also reflects investments in ongoing recovery efforts from crises including Covid-19, inflation, the May 2023 floods, and the Marburg disease outbreak. As per MINECOFIN the 2025/26 budget will be guided by national economic policies over the medium term, including fiscal consolidation path. It stated that it will support the implementation of the second National Strategy for Transformation (NST2) goals while maintaining public debt at sustainable levels. On the expenditure front, Murangwa said that expenses on running public offices and staff remunerations, is projected to amount to more than Rwf4.29 trillion in 2025/2026, while development budget – consisting of investments in development projects – is forecast to be over Rwf2.63 trillion. “The activities planned in the 2025/2026 budget were selected based on their contribution to the attainment of development targets that the government set as contained in its national strategy for transformation, as well as dealing with climate change effects on the economy, and external shocks,” he said. ALSO READ: USAID halt: Rwanda to make “necessary adjustments” Murangwa said that Rwanda’s growth momentum remains strong, despite a challenging environment caused by climate change effects, global inflation, geopolitical tensions, trade wars, among other factors. Despite various setbacks, he said that Rwanda’s economy remained resilient, achieving a growth rate of 8.9 per cent in 2024—which exceeded the previously projected 8.3 per cent. This growth was driven by strong performances in the services and industry sectors, as well as increased food crop production. The government remains committed to maintaining macroeconomic stability and fostering inclusive growth by investing in key areas such as agriculture, manufacturing, healthcare, social protection, and education, he pointed out. Key priorities Under NST2, the 2025/26 national budget will prioritise interventions towards the achievement of the set goals. The priorities include increasing crop and livestock productivity, promoting private investment, job creation and exports, accelerating industrialisation with focus on manufacturing, promoting sports and creative arts, and expanding generation and access to electricity. Other key things include scaling up access to water, sanitation and decent housing, strengthening the transport system, leveraging ICT and innovation to improve service delivery across sectors, 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. Sources of funding The resources for the 2025/26 fiscal year comprises domestic revenues of more than Rwf4.1 trillion—of which more than Rwf3.6 trillion is from tax revenue and Rwf477.2 billion from other revenues. External grants are estimated at Rwf585.2 billion, while external loans are expected to be over Rwf2.15 billion. MINECOFIN observed that guided by Vision 2050 and NST2, the Budget Framework Paper provides the foundation for the 2025/26 budget, which will be presented to Parliament in June this year.
