Budget support to increase by over 26%

KIGALI - The external support to Rwanda’s budget of the fiscal year 2010-2011 is expected to increase by 26.7 percent, a newly released policy statement says. The National Bank of Rwanda (BNR) said in the statement that direct budget support, particularly from development partners, will increase to $ 519 million in 2010 from $ 409.6 released last year. According to the Minister for Finance and Economic Planning, John Rwangombwa, the increment was published after several consultations and the government is positive that the donors will deliver on their promises. “The indicated increase in budget support is based on firm commitments we have already received from our development partners. So we are assured of getting it,” he said. The development comes as Rwanda continues to work toward depending less on foreign aid to support its budget. The World Bank has already contributed $91 million, the European Union $80.5m, the United Kingdom $63.1m, the African Development Bank $27.6 m and Germany $15.2m. Most of the funding will be available in the first two quarters of the 2010/11 Financial year. Rwanda will also receive additional funding of $39.3m through the Joint Financing Mechanisms. The government increased spending by 24 percent in the 2009/10 fiscal year compared to 2008 to stimulate the economy and safeguard against the global slump. The Ministry of Finance says that to counter a liquidity problem which hit early last year, the government negotiated credit lines for long-term loans from the African Development Bank, European Union Investment Bank and the International Finance Corporation. Ends