Experts commend raising domestic financing as Rwf7.8tn budget is tabled

With domestic resources expected to finance 68 per cent of government spending next fiscal year, experts say this reflects growing confidence in the country's ability to fund its development agenda while reducing reliance on external support. They also point to the budget's strong focus on agriculture, industrialisation, infrastructure development and job creation as critical priorities amid an increasingly uncertain global economic environment. The Minister of Finance and Economic Planning, Yusuf Murangwa, on Thursday, June 11, presented to Parliament the proposed budget for the 2026/27 fiscal year, which is Rwf7,796.3 billion. Domestic resources are expected to contribute Rwf5,273.8 billion, while external resources will account for the remaining 32 per cent. ALSO READ: Domestic resources, borrowing account for 93% of 2026/27 budget Angello Musinguzi, the tax and regulatory services associate at Garnet Partners Ltd, said the increasing share of domestic financing is one of the most notable features of the spending plan. “The growing contribution of domestic resources reflects the country's efforts towards greater self-reliance in financing development,” he said. “It shows that Rwanda is increasingly able to mobilise resources from within its own economy to support national priorities and reduce vulnerability to fluctuations in external financing.” Nearly two-thirds of the proposed expenditure has been allocated to programmes under the Economic Transformation pillar, which is expected to receive about Rwf4.9 trillion. Key priorities include increasing agricultural productivity, supporting industrial growth, expanding infrastructure, creating jobs and strengthening climate resilience. Musinguzi said the strong emphasis on agriculture comes as countries grapple with climate change, supply chain disruptions and geopolitical tensions. ALSO READ: Finance minister presents budget on Thursday: Key things to know The budget includes plans to expand irrigation, improve access to fertilisers and quality seeds, increase strategic grain reserves, strengthen livestock productivity and support coffee and tea production. “With global pressures ranging from climate change to conflicts affecting supply chains, investing in food production and agricultural resilience is critical. Food security remains fundamental to economic stability,” he said. He also welcomed increased allocations towards climate adaptation and environmental protection, including wetland rehabilitation, ecosystem restoration and improvements in meteorological services. “Climate change has direct implications for agriculture, infrastructure and food security. Investing in environmental protection and adaptation measures today can help reduce future economic losses and strengthen the country's long-term development prospects,” Musinguzi said. ALSO READ: Govt highlights spending priorities for 2026-27 The government also plans to continue investing in major infrastructure projects, including roads, energy generation, water and sanitation systems, urban transport and facilities linked to the New Kigali International Airport. Analysts say such investments are essential for supporting economic growth, improving connectivity and enhancing Rwanda's competitiveness as a regional business and tourism hub. While welcoming continued investment in industrial parks, manufacturing and energy infrastructure expert Olivier Condo said infrastructure spending should be complemented by measures that improve productivity within existing industries. “The budget invests well in infrastructure and investment attraction. What I would like to see more of is structured support for operational performance inside existing factories, not just capital to build or expand, but programmes that help manufacturers run what they already have more effectively,” he said. Condo added that translating infrastructure investment into sustainable industrial growth will require equal attention to workforce development. “Capital can arrive faster than the human capacity needed to deploy it effectively. The challenge is ensuring that investments in industrial infrastructure are matched by investments in skills, operational excellence and factory-level capability. That is what ultimately translates infrastructure spending into higher productivity and sustainable industrial growth,” he said. While the analysts broadly welcomed the budget, they stressed that its success would ultimately be measured by its ability to create jobs and improve livelihoods. Daphine Tumukunde, senior tax advisor associate at KPMG Rwanda, said economic growth should translate into meaningful employment opportunities, particularly for young people. “Economic growth is important, but it should also create meaningful opportunities for young people through skills development and support for small businesses,” Tumukunde said. The proposed budget includes measures aimed at supporting start-ups and small and medium enterprises, strengthening internship programmes and promoting employment through public and private sector investments. Tumukunde welcomed these interventions, noting that they could help ensure that economic growth delivers tangible benefits to households and communities. However, she cautioned that external economic pressures could affect implementation of some programmes. “Fuel prices affect virtually every sector of the economy. If costs continue to rise due to conflicts and disruptions in international markets, government projects could become more expensive than initially projected, putting additional pressure on budget implementation,” she said. She also warned that inflation and broader global economic shocks could affect government revenues, business activity and the delivery of development programmes. “There is also the challenge of funding large projects while keeping public debt at manageable levels. These investments can bring significant benefits in the future, but they need to be managed carefully to ensure they deliver the expected results,” Tumukunde said. Despite the risks, the experts said the proposed budget demonstrates a continued commitment to long-term economic transformation, with a growing reliance on domestic resources and targeted investments aimed at strengthening resilience, competitiveness and job creation.

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Experts commend raising domestic financing as Rwf7.8tn budget is tabled