On Thursday, February 20, 2025, Rwanda’s Parliament approved a revised national budget for 2024/2025. The budget increased from 5.69 trillion Rwandan francs to 5.82 trillion, with an additional 126.3 billion francs.
The government explained that the budget needed to be adjusted to ensure all planned projects could be completed on time. The extra funds will be spread across different sectors to address gaps in both the regular and development budgets.
Some key adjustments include:
- 44.9 billion francs for various institutions to cover employee pension contributions.
- 10 billion francs to support subsidies for fertilizers and improved seeds.
- 5 billion francs for different sports activities.
- 3 billion francs to help the Rwanda Correctional Service (RCS) provide food to inmates.
- 1.1 billion francs for the National Rehabilitation Service (NRS) to care for children in rehabilitation centers.
- 3.5 billion francs for road maintenance, particularly for the Base-Butaro-Kidaho road.
- 5.8 billion francs to support social contributions.
Currently, 65% of the budget for the 2024/2025 fiscal year has been implemented, with many planned activities already underway.
The budget revision also revealed that foreign aid and tax revenues are expected to decrease. Tax revenue projections have been lowered from 2.97 trillion francs to 2.95 trillion, a reduction of 20 billion francs. This decline is mainly due to changes in income tax policies, with the government increasing the tax exemption for low-income workers from 30,000 to 60,000 Rwandan francs.
However, other non-tax revenue sources are expected to rise by 48.4 billion francs, largely due to the privatization of state-owned enterprises and reduced spending on peacekeeping missions abroad.
Foreign aid will also decrease, dropping from 725.3 billion francs to 621.2 billion francs.
Despite the drop in aid and tax revenue, the government is boosting its reliance on loans. Foreign loans will increase by 184.3%, particularly through the World Bank, which will contribute an additional 121.1 billion francs. However, domestic loans are expected to decrease by 38 billion francs.
These adjustments aim to address financial gaps and ensure that Rwanda can meet its development goals over the coming years. The changes reflect the government’s ongoing effort to manage the country’s finances effectively, while continuing to invest in key sectors such as infrastructure, agriculture, and social welfare.
