Rwanda recorded a budget shortfall of Rwf1.7 billion in the first quarter of the 2020/2021 fiscal year, according to the Ministry of Finance and Economic Planning.  

From July to September 2020, the country had planned to spend Rwf887.6 billion but instead spent Rwf885.9 billion, reflecting a shortfall of 0.2 per cent.

While presenting the budget and economic update for the first quarter of this fiscal year Monday, November 23, the Minister of Finance and Economic Planning, Uzziel Ndagijimana, told the Chamber of Deputies that there was a rise in domestic revenue collections for the period under review.

In the July-September period, domestic revenue collections amounted to Rwf465.5 billion—both tax and non-tax revenues—a Rwf52.5 billion or 12.7 per cent surplus for the period.

On the basis of external financing, the country received Rwf404.4 billion in external funds against Rwf406 billion, implying a shortfall of 0.4 per cent

Meanwhile, Rwanda’s Gross Domestic Product (GDP) dropped by 12.4 per cent year-on-year.

The decline was occasioned by the poor performance in transport, trade, education, construction, exports, hotels and restaurants, and agriculture sectors, mainly due to the Covid-19 pandemic.

Some spending outcomes

The country spent heavily on the purchase of seeds and fertilisers, thus helping support the economy in times of Covid-19.

The country produced 8,500 tonnes of coffee, falling short of its forecast of 8,900 tonnes.

Over 102,000 children were provided with fortified foods to tackle malnutrition. Pregnant and breastfeeding mothers received the nutritious meals, the minister said.

On electricity, Ndagijimana said that over 32,000 households received on-grid electricity connection, while over 10,000 households were connected to solar energy.

In the midst of the pandemic, Rwanda increased Covid-19 testing laboratories from one to 12.

MPs commended the government's efforts in controlling the virus spread albeit expressing concerns over funding shortage in the face of a fragile economy.

"What will happen to the activities that were planned but they faced the budget shortfall? Will they be catered for in the revised budget or we will wait for the next financial year?” wondered MP Veneranda Nyirahirwa.

MP Christine Muhongayire said that; "I can see the economy is still in decline because of the Covid-19 pandemic. As the people in charge of economic planning, how do you plan to return the growth momentum?”

Ndagijimana said that; "The domestic resource mobilisation target was surpassed. Only 0.2 per cent of the external loans was not received in the first quarter; but, there is hope that it will be accessible in the next quarter.”

The domestic economy is projected to drop by -0.2 per cent in 2020, which is lower than the global economic decline of -4.4 per cent this year.

However, the economy is expected to pick up and grow by 5.7 per cent in 2021, 6.8 per cent in 2022, and by the pre-Covid-19 pandemic growth level of 8 per cent in 2023, if the efforts to contain the pandemic are successful, worldwide.