June 8 (Bloomberg) -- Rwanda’s government plans to almost eliminate its budget deficit over the next three years, while reducing dependence on foreign grants, said the Minister of Finance and Economic Planning John Rwangombwa.
The shortfall will narrow to 0.3 percent of gross domestic product from a targeted 2.4 percent in the fiscal year through June 2012, the smallest in five years, Rwangombwa said in a phone interview today from the capital, Kigali.
The government aims to boost the economy by investing in infrastructure and agriculture, increasing tax revenue to 14.8 percent of GDP by 2014 from 13.6 percent. In the budget for next year, 21.7 percent will go to infrastructure projects and 17.9 percent to agriculture, industry, trade and environmental protection, the government said yesterday. Domestic borrowing will fall to 21.6 billion francs ($36.1 million) from 81 billion francs this year.
“We are targeting an increase in private borrowing,” the minister said. “We want to be less active in the market because we don’t want to crowd out the private sector.”
The government plans to earn 25 billion francs through asset sales. Shares of MTN Rwanda, a unit of MTN Group Ltd. of South Africa, will be offered this year, according to yesterday’s statement, which did not list a date. On June 27, Bank of Kigali Ltd., Rwanda’s biggest lender by assets, will begin its initial public offering, which will include 20 percent of the government’s stake in the company, bank officials said May 31.
--Editors: Philip Sanders, Heather Langan
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