The Ministry of Finance and Economic Planning proposed increasing the funds to support emerging national priorities and enhance public service efficiency.
The additional funds will be allocated across various institutions to address gaps identified in various sectors.
As part of the adjustments, FRW 44.9 billion will be allocated to various institutions to fill gaps in employee insurance contributions.
Additionally, FRW 10 billion will be used for government subsidies on fertilisers and improved seeds, while FRW 5 billion will go towards various sports activities.
Other allocations include FRW 3 billion for the Rwanda Correctional Service (RCS) to address food shortages and FRW 1.1 billion for the National Rehabilitation Service (NRS) to support children in rehabilitation centres.
Additionally, FRW 3.5 billion has been set aside to cover taxes for the 63-kilometre Base-Butaro-Kidaho road, while FRW 5.8 billion will go towards social security contributions.
So far, the implementation of the 2024/2025 budget stands at 65%.
Reduction in Foreign Aid and Tax Revenue
The revised 2024/2025 budget highlights a decrease in expected foreign aid and tax revenue due to various factors.
Tax revenue is now projected to reach FRW 2,950.4 billion, down from the initially estimated FRW 2,970.4 billionâ€"a decrease of FRW 20 billion.
This decline is attributed to the reduction in indirect taxes collected in the 2023/2024 fiscal year, as well as a drop in personal income tax revenue. The Rwandan government recently decided to exempt individuals earning less than FRW 60,000 from income tax, an increase from the previous threshold of FRW 30,000.
However, non-tax revenue is expected to increase by FRW 48.4 billion, rising from FRW 444 billion to FRW 492.4 billion.
This increase is primarily due to proceeds from privatising former government projects and a reduction in government spending on international peacekeeping efforts, which will decrease by FRW 3.6 billion.
Foreign grants are also projected to decline, from FRW 725.3 billion to FRW 621.2 billion.
Meanwhile, the Rwandan government anticipates an increase of 184.3% in foreign loans, particularly from the World Bank. Loans channelled through the national treasury and development projects will increase by approximately FRW 121.1 billion.
On the other hand, domestic borrowing is expected to decrease by around FRW 38 billion.
IGIHE
