Rwanda: How Will Government Finance the 2024-2025 Budget?

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The government plans to spend an estimated Rwf5,690 billion in the fiscal year 2024/2025, an 11.2 per cent increase compared to the Rwf5,116 billion approved for the current fiscal year.

The Ministry of Finance and Economic Planning plans to allocate the budget to key sectors such as health, education, and agriculture, which are expected to boost the economy.

Under the same pillar, the government looks to increase trained teacher ratio in primary schools, minimum proficiency in numeracy in Senior 3, enrolment in Science, Engineering, Technology and Mathematics and in Technical and Vocational Education and Training , and reduce drop out across all educational levels.

"This is a very huge achievement. Where revenue will come from, however, is still a big question for the Ministry of Finance," he observed, adding that wars in Ukraine and Palestine that have disrupted global supply chains, as well as the effects of COVID19 adds another layer of complexity to the challenge.To mitigate the shocks, Rwanda Revenue Authority is automating its processes to ensure tax compliance.

The remaining 40 per cent of expenditure will be met through external financing, with grants forecast to reach more than Rwf725 billion, or 12.7 per cent of the total budget, while loans will amount to over Rwf1.3 trillion, equivalent to 23.2 per cent. The increase in the budget to the agriculture sector would, among others, enable the training of young people into mechanization, improved irrigation practices, and terracing techniques thereby providing productive avenues for youth most of whom are currently idle with no any form of work.

 

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