Rwanda’s government forecast a 20 percent increase in total expenditure in the 2012-13 fiscal year as it boosts spending on infrastructure including roads, airports and power plants.
Spending will rise to 1.33 trillion Rwandan francs ($2.2 billion) in the 12 months through June, 2013, from 1.11 trillion francs in the current budget year, Finance Minister John Rwangombwa said in a budget document e-mailed to reporters yesterday in the capital, Kigali. Infrastructure costs will increase to 321.2 billion francs from 256.9 billion francs, it said.
Key projects in the coming year include commissioning the design of the Isaka-Musongati railway, the development of so- called micro-hydro sites to generate 24.18 megawatts of electricity and accelerated exploitation of geothermal power resources, according to the document.
Rwanda is rebuilding its economy after a genocide in 1994 in which at least 800,000 people, a 10th of the country’s population, were killed. Economic growth in the East African nation was the third-fastest on the continent last year, after Ghana and Zimbabwe.
Growth is forecast to slow to 7.7 percent in 2012 and 7.5 percent in 2013, compared with 8.6 percent last year, according to the budget document. Inflation is targeted at 7.5 percent by the end of 2012 and is projected to “stabilize” at 5 percent over the medium-term, it said.
Revenue and grants in 2012-13 are forecast at 1.21 trillion francs, compared with 1.03 trillion francs in the current year, according to the budget document. The overall deficit for next year is forecast at 132.4 billion francs, equivalent to 2.8 percent of gross domestic product, compared with 77.1 billion francs, or 1.9 percent, this year, it said.
The deficit will be funded with net foreign loans inflows of 119.6 billion francs and net domestic borrowing from the banking system of 12.7 billion francs, according to the document.
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