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The Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana presented the 2020/2021 revised budget to members of parliament where he revealed that the revised budget will increase by Rwf 219.1 billion to cater for COVID-19 related expenditures, increase in net lending outlays to support business through the Economic Recovery Fund as well as state corporations.
Minister Ndagijimana virtually presented the revised budget yesterday in line with cabinet resolutions to contain COVID -19 pandemic as well as the Supreme Court ruling allowing parliament to conduct virtual plenary sittings.
“The budget revision process has been informed by the economic and budget performance for the first quarter of 2020/21 which includes the assessment of the COVID-19 economic effects and provision of necessary support to vulnerable households, create jobs and support businesses,” Minister Ndagijimana said.
Key changes in FY 2020-2021 Revised Budget
The proposed revised budget presented to parliament contains key adjustments which include rise in domestic revenues due to projected increase in taxes following recovery of economic activities and businesses. Reclassification of budgetary loans to budgetary grants due to changes in disbursement plans. On the expenditure front, Government expects to increase recurrent spending to cater for COVID-19 related expenditures, increase in net lending outlays to support business through the Economic Recovery Fund as well as state corporations.
The proposed revisions to the 2020/21 budget reflect changes in the resource envelope as well as the corresponding adjustments on expenditures. As a result of the proposed changes, the total budget is projected to rise from Rwf 3,245.7 billion to Rwf 3,464.8 billion showing an increase of Rwf 219.1 billion.
Tax revenues are projected to increase by Frw 158.5 billion, from Rwf 1,421.4 billion in the original budget to Rwf 1,579.9 billion. Non tax revenue is expected to increase by Rwf 20.5 billion upwards from Rwf 184.3 billion to Rwf 204.8 billion. Grants are expected to rise by Rwf 99.7 billion, upwards from Rwf 492.5 billion in the original budget to Rwf 592.2 billion.
Total expenditure is being raised from Rwf 3,245.7 billion to Rwf 3,464.8 billion showing a net increase of Rwf 219.1 billion. The expenditure has been revised to reflect changes made under recurrent spending, capital expenditure and net lending outlays.
Recurrent Expenditure will be raised by Rwf 12.4 billion from Rwf 1,583.0 billion from the original budget estimate to Rwf 1,595.4 billion. Capital expenditure is expected to rise by Rwf 37.6 billion, from Rwf 1,298.5 billion in the original budget to Rwf 1,336.1 billion.
The changes majorly affect the domestically financed capital expenditures. Net lending increased by Rwf 165.2 billion from Rwf 306.5 billion in the original budget to Rwf 471.7 billion. This increase in the Net lending outlays are mainly allocated to the Economic Recovery Fund as the continued effort of the Government to support Businesses affected by COVID-19 pandemic outbreak.
The 2020/21 revised budget is part of the revised medium term macro-economic framework that aims to continue fighting the COVID-19 pandemic outbreak which continues to take a heavy toll on Rwanda’s economy. The Government will continue to monitor closely all components of the economic performance that may affect the smooth implementation of the revised 2020/21 budget, and will take any necessary corrective measures to ensure full implementation of the budget and at the same time maintain macro-economic stability.