Rwandan government proposes Frw 5.69trn budget for FY2024/2025

The Rwandan government recently unveiled a proposed budget of about 5.69 trillion for the upcoming fiscal year 2024-2025, marking an 11.2% increase from the previous budget. This proposal has sparked discussions and analysis on its feasibility and implications for the country's economy. To delve into the details and provide expert insights, CNBC Africa spoke with Angello Musinguzi, Senior Manager at KPMG Rwanda. Musinguzi expressed his satisfaction with the proposed budget, stating that the modest increase in revenue was realistic and achievable considering the economic conditions from the previous year. He emphasized the government's ability to meet the targets through a combination of domestic revenue generation and external funding sources. One of the key areas highlighted in the budget proposal is the allocation of resources to priority sectors, with a significant focus on agriculture, education, health, and ICT. Musinguzi noted that Rwanda's consistent emphasis on agriculture, coupled with the need to address climate change challenges, has influenced the allocation of funds in these key areas. In terms of funding sources, Musinguzi outlined that the government aims to finance 60% of the budget through domestic revenue, with taxes accounting for a major portion of the revenue. Additionally, about 40% of the budget will be sourced from external borrowing and donations. He underscored the importance of enhancing tax collection mechanisms and expanding the tax base to support revenue generation. When discussing Rwanda's debt situation, Musinguzi reassured that while the country carries a debt burden, it is not alarming, and Rwanda's positive credit rating allows for external borrowing at feasible rates. He projected that the government's target of external borrowing, amounting to approximately 30% of the budget, could be achieved. The conversation also touched on the appointment of a new finance minister, Mr. Yusuf Murangwa. Musinguzi expressed confidence in the new minister's ability to effectively manage the fiscal responsibilities, citing his experience and familiarity with the government's financial operations. In conclusion, Musinguzi reiterated his optimism regarding Rwanda's revenue targets, particularly highlighting the advancements in tax collection technologies and strategies that are expected to bolster revenue generation. The proposed budget, with its strategic allocation of resources and funding sources, signifies a concerted effort by the Rwandan government to address key economic priorities and propel sustainable growth in the upcoming fiscal year.