Rwanda Budget Revision – Shortfall In Revenue Collection, Reduced Aid Donations, And More Debt

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As the CEO of Rwanda, President Paul Kagame, begins his lecture to a fearful gathering at the annual retreat 2015, he should not overlook the Revised Budget tabled by the Minister of Finance in Parliament on February 25, 2015.

The budget is bad news: 1) Revenue collection has fallen short of 2014 estimates, 2) donors are less generous, and so the regime 3) is turning to more and more debt.

Here are a few highlights from the revised budget.

• Overall the 2014/2015 budget has increased from RwF 1753.3 billion to RWF 1759.6 billion – equivalent to US$2.5 billion.

• Tax revenue estimates have fallen short by RwF 12.2 billion from RwF 906.8 billion to RwF 894.6 billion – equivalent to US$1.3 billion.

• Donor grants have shrunk from the original estimate of RWF 544.8 billion (US$788 million) to RWF 414.4 billion – equivalent of US$600 million. Donors in other words are giving the regime less than originally anticipated by US$188 million.

• Total loans have been raised from RWF 122.8 billion to RwF 212.6 billion – equivalent to US$ 307 million.

Kagame’s economic lion is proving to be a mouse. Let us hope the retreat is not the usual posturing and phraseology, and instead addresses substantive matters by first acknowledging the difficulty situation facing Rwanda.

Dr David Himbara

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