Rwanda is predicting a decline in foreign funding before the end of the current financial year ending in June 2017, Finance Minister, Claver Gatete, told parliament yesterday.
Gatete has forecasted a reduction in foreign grants by Rwf38.8 billion from Rwf365.3 billion to Rwf326.6 billion mainly due to expected “lower disbursement of Global Fund grants.”
As a result, Minister Gatete has been forced to revise the budget, but he had to first seek for “parliamentary blessings,” before the end of business yesterday.
His proposal includes, first, increasing spending by a margin of 0.25% (Rwf4.9 billion) from Rwf949.4 billion to Rwf1954.2 billion.
The increase will cover up for a few spending adjustments and also cushion the economy from any uncertainties that might arise as a result of the tilts made in the cash flow.
Right off the bat, Minister Gatete will slice development budget by Rwf7.8 billion from Rwf785.7 Billion to Rwf779.9 billion. He intends to cut on allocation of Global Fund projects due to the reduction of initially projected disbursements.
However, additional funding was provided on other key domestically funded projects such as expropriation on infrastructure projects, Oil and Gas exploration project, E-passport, Valley Dams, and High Commercial Court among others.
On the other hand, the budget adjustment gave some projects a slight financial boost. Externally funded projects will get a net increase of Rwf2.5 billion exchange rate depreciation.
The Minister explained that an increase in tax revenue arising from the accelerated roll out of the electronic billing machines, increase in non EAC imports and larger than expected exchange rate depreciation will help mobilize the Rwf4.9 billion.
In justification, the minister said this whole budget revision “is guided by the need to address the external shocks affecting the national economy.”
Again, he added, the action is consistent with the long-term objective of increasing domestic revenue and closing a fiscal gap and the reliance on external funding.
Some good news was the government’s plane to raise funs for the construction of the long-awaited Bugesera Airport.
The government, according the Minister, will offload its stake of 99,030,000 shares in I&M Bank Rwanda, a subsidiary of I&M Holdings through an initial public offering (IPO) running from February 14 to March 3. The stake in the bank is equivalent to 19.61% of the issued share capital in I&M Bank.
Note: Factsheet on Global Fund Grants in Rwanda
US$1,165,461,105 Total disbursed amount so far
153,147 People currently on antiretroviral therapy
32,684 New smear-positive TB cases detected and treated
12,919,288 Insecticide-treated nets distributed