The Minister of Finance and Economic Planning said, Thursday, that total government expenditure for the Financial Year 2010/11 is projected at Rwf952.6bn, up from Rwf849bn this Financial Year.
This increase was generated owing to the fact that, throughout this Financial Year, it has not been easy for the private sector to secure the much needed capital to finance various investment projects, as banks had slashed their lending due to the global economic downturn.
This will also boost economic growth that declined significantly from 11.6 percent in 2008 to 6 percent in 2009.
While presenting the 2010/11 Budget Framework Paper (BFP) before a joint session of Parliament, the Minister said the 12 percent growth in government expenditure will consequently exert pressure on market prices.
Rwanda has maintained a stable macro economic environment with low interest rates and inflation has fallen below 4 percent. This is a huge incentive for government to increase expenditure, in order to fulfill the developmental and social needs of the Rwandan people.
In 2009, the business environment was affected as reflected in low level of turnovers compared to previous years.
In order to avert a further slide in economic growth, there’s need for additional measure by the Ministry of Finance and Economic Planning as well as the Central Bank to boost growth in the labour market and national output.