July 8, 2019

Government Allocates Rwf128b To Repaying Debts


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Finance Economic Planning Minister Dr Uzziel Ndagijimana at Parliament last month to present the 2019-2020 budget

Rwanda has allocated nearly as much money for agriculture as it has for repaying debts.

In the budget read mid last month, Finance and Economic Planning Minister Dr Uzziel Ndagijimana set aside Rwf 128.5billion to covering the country’s debts – both domestic and external. The amount has increased from Rwf 103bn last year.

As much as Rwf 78b will be to cover domestic debts, while Rwf 53b will go to the country’s external lenders.

The debt will be 4.4% of the whole budget reaching Rwf 2.87trillion.

Compared to allocations for other sectors, debt repayment (or servicing), takes a considerably small portion of the budget. Private sector development and youth got Rwf 139.5billion. Agriculture got Rwf 154.1billion, whereas social protection was given Rwf 110.7bn.

The biggest priorities were infrastructure (Rwf551.1bn), education (Rwf310.2bn) and health.

Compared to regional neighbours as far as how much of the budget is allocated to debt repayment, 33% of Kenya’s budget will be for debt servicing, Uganda put 34 percent as some 24% of Tanzania’s budget goes to repayment.

Data for other regional neighbours Burundi and South Sudan was not readily available.

The World Bank said last week that Rwanda’s debt level was at 32.9 per cent of GDP or (about $3.5billion), which is way below the critical EAC threshold of 50 per cent.

Other EAC members’ debt to GDP was above 40%.

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