Executive summary

The Rwanda National Budget, whose theme is "Stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery," was presented by the Minister of Finance and Economic Planning on 22 June 2020.

The focus of the national budget is economic recovery from the COVID-19 pandemic as well as safeguarding lives, jobs, business and industrial recovery.

Detailed discussion

Economic forecast

Due to the COVID-19 pandemic, the economy is expected to only register growth of 2% in 2020, a sharp decline from the growth of 9.4% registered in 2019. The economic growth is expected to rebound to 6.3% in 2021 and 8% in 2022.

Budget summary

The budget:

Financing of the budget:

Budget expenditures:

Key expenditure priorities in line with NST-1 and resources allocation

The allocation of resources in the national budget were guided by the strategic objectives of the National Strategy for Transformation (NST). The NST is Rwanda's long-term plan to achieve the middle-income status by 2050.

NST-1 has three-pillars namely:

a) Economic transformation – to accelerate inclusive economic growth and development founded on the private sector, knowledge-based economy and Rwanda's natural resources.

b) Social transformation – to develop the Rwandans into a capable and skilled work force with quality standards of living and a stable and secure society.

c) Transformational governance – to consolidate good governance and justice as building blocks for equitable and sustainable national development.

Budgetary allocation under NST-1 pillar:

In line with NST-1, the key priorities under the National Budget are:

1. Strengthening of the health system by increasing accessibility to quality health services for all
2. Supporting the Made in Rwanda policy to reduce the trade deficit and build economic resilience
3. Strengthening of social protection programs by increasing their coverage
4. Increasing agriculture and livestock productivity
5. Promoting employment through investment in public infrastructures
6. Developing a smart society by promoting digital infrastructure and digital technologies to improve service delivery
7. Supporting the recovery of Micro, Small, Medium and Large Enterprises affected by COVID-19
8. Improving access to quality education through construction and rehabilitation of classrooms
9. Continuing to eradicate malnutrition and stunting by improving screenings at early age
10. Strengthening of disaster preparedness and management

The Minister of Finance and Economic Planning did not propose any changes to the current taxation system.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Rwanda Limited, Kigali

• Michael Ichura
  michael.m.ichura@rw.ey.com

Ernst & Young (Kenya), Nairobi

• Francis Kamau
  francis.kamau@ke.ey.com

Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg

• Marius Leivestad
  marius.leivestad@za.ey.com

Ernst & Young Société d'Avocats, Pan African Tax – Transfer Pricing Desk, Paris

• Bruno Messerschmitt
  bruno.messerschmitt@ey-avocats.com
• Alexis Popov
  alexis.popov@ey-avocats.com

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

• Rendani Neluvhalani
  rendani.mabel.neluvhalani@uk.ey.com
• Byron Thomas
  bthomas4@uk.ey.com

Ernst & Young LLP (United States), Pan African Tax Desk, New York

• Brigitte Keirby-Smith
  brigitte.f.keirby-smith1@ey.com
• Dele Olagun-Samuel
  dele.olaogun@ey.com

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ATTACHMENT

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