Rwanda plans to raise government spending by 7 per cent in the 2017/18 fiscal year to Rwf2.09 trillion ($2.58 billion), its finance minister said on Thursday.
Claver Gatete told Parliament that 17 per cent of the budget will be funded by donors with the rest coming from internal revenue and borrowing, of which Rwf362.8 billion will be borrowed from outside Rwanda.
“The government’s objective is to reduce the reliance on external donor support especially where grants are concerned. However, for the time being this support remains vital for our development.”
The government expects to collect Rwf1.20 trillion ($1.4 billion) in revenue during the fiscal year, which runs from July to June, up from Rwf1.081 trillion ($1.23 billion) in 2016/17.
The minister said 54 per cent of the budget of would be used on recurrent expenditure with an increment of Rwf131 billion ($155 million), part of which will be used to finance August presidential elections and salaries in new government institutions.
The government planned to use Rwf937 billion ($1.1 billion) on development projects, an increase of 44.4 per cent from the fiscal year ending June, Mr Gatete said.
The cash will be used for promoting export products, agriculture and expansion of state-run airline RwandAir, completing the construction of a new airport and renovation existing airports.
The money will also go to towards roads, power transmission lines and water supply, Mr Gatete said.
Rwanda’s economy is expected to grow 6.2 per cent in 2017 and 6.8 per cent in 2018 while inflation is expected to be at 7 per cent by the end of 2017, Mr Gatete said in May.
He said inflation would edge down to 6 per cent in 2018.
The country has posted soaring growth rates in recent years mostly fuelled by business-friendly policies and strong inflows of foreign investment.