Rwanda’s Cabinet Approves 2017/18 Budget

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An extra ordinary cabinet meeting convened at Village Urugwiro and chaired by Prime Minister Anastase.

Rwanda’s cabinet approved the 2017/18 budget on Tuesday, targeting to reduce to 17 percent its current dependence on donor money.

The Tuesday’s extra ordinary cabinet meeting chaired by Prime Minister Anastase Murekezi, approved the draft law determining state finances for the 2017/2018 fiscal year valued at two trillion, ninety four billion nine hundred and ten million, four hundred eighty thousand five hundred forty-five (Frw 2.094,910,480,545)

The East African country wants to contribute 66% of its national budget plus 17% of loans, making the total of 83% of the entire budget.

Despite a general increase in size of budget, money allocated to some institutions has been reduced.

According to the Budget Framework Paper (BPF) 2017/2018 Rwanda plans to pull its domestic revenue to 66% to the whole budget plus 17% of loans, making the total of 83% of national budget. The remaining 17% will come from foreign aid.

The 2017/2018 a draft budget shows a significant rise from Rwf 1954.2 billion in 2016/2017 to Rwf 2094.9 billion.

Available data shows that the Rwandan economy is projected to grow by 6.2 percent in 2017 and 6.8 percent in 2018, from 5.9 percent in 2016 supported by improvement in the agriculture sector with a growth rate at 4.6 percent in 2017 and 4.6 percent in 2018 due to food crops and exports crops improvement reflecting ongoing investments.

The 2017/2018  budget framework paper projects foreign direct investment to continue to increase reaching USD 307.2 million, USD 404.4 million and USD 439 million respectively in 2017, 2018 and 2019, from USD 258.9 million in 2016. In both 2018 and 2019, USD 67 million are expected as foreign direct investment and USD 81.8 million as external loans to finance imports for the Bugesera airport.

In the light of the above projections, BNR is expected to draw down 109.5 million USD of its reserves in 2017.

However, there are glaring challenges as for 2017, the rising global fuel and food prices as well as the lower than expected domestic food crops harvest poses significant threat to inflation.

This is therefore projected to increase in 2017 to about 7 percent reflecting mainly the first round pass-through effect of rising fuel and food prices as agriculture season A 2017 production was not good as expected.

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