8 key projects to be funded under Rwanda’s Rwf 5 trillion budget

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Rwanda envisages spending over Rwf5 trillion in the 2023/2024 fiscal year, which represents a Rwf265 billion or six per cent increase compared to the revised expenditure of Rwf4.7 trillion for the current financial year, according to the Ministry of Finance and Economic Planning (MINECOFIN).

The rise in spending, the ministry said, will fuel ongoing economic recovery from the impact of the Covid-19 pandemic, support climate change mitigation, and finance key investments in education, healthcare, ICT, agriculture, and infrastructure through the first National Strategy for Transformation (NST1).

Of the total projected expenditure in the next fiscal year, recurrent spending needed to run entities’ operations (such as expenses on salaries, utilities and office equipment) will take up over Rwf2, 902 billion representing 57.7 per cent; while development expenditure — which directly contributes to economic development by increasing production and real income of the country — will be allocated over Rwf2, 127 billion representing 42.3 per cent.

Here are eight key projects related to NST1 priority areas that will be funded under the proposed budget for the next fiscal year, beginning on July 1, according to the Minister of Finance and Economic Planning, Uzziel Ndagijimana.

1. Rwanda Energy Access and Quality Improvement Project

Rwanda Energy Access and Quality Improvement Project (EAQIP/WB), will be allocated Rwf74.3 billion, according to data from the Ministry of Finance and Economic Planning.

The project is meant to scale up energy access in Rwanda. It is implemented through the partnership of the Government of Rwanda and the World Bank (WB).

The allocation announced by MINECOFIN implies an increase of about 55 per cent compared to the Rwf48 billion that Energy Development Corporation Ltd (EDCL) planned to spend on the project execution in the next fiscal year.

Information from Rwanda Energy Group (REG) indicates that the project development objective is to increase access to modern energy (clean cooking solutions) for households, enterprises, and public institutions, and to enhance the efficiency of electricity services in Rwanda.

Among other interventions, it will provide $15 million (over Rwf15 billion) in financing to make access to off-grid electricity affordable at all income levels and to connect at least 150,000 households.

It runs from 2021 to 2026, at a cost of more than Rwf181 billion.

As of April 30, 2023, Rwf18 billion, or about 10 per cent of the required funding for the scheme, had been spent on its implementation.

2. Digital Ambassadors Programme

The Digital Ambassadors Programme which aims at narrowing the digital divide and increasing citizens’ literacy in ICT, will get an estimated Rwf3.3 billion allocation in the next fiscal year.

This is a significant amount compared to more than Rwf60 million funding this programme received in the current fiscal year which ends on June 30, according to data from the Ministry of ICT and Innovation.

It was initiated in 2017/2018 and is expected to come to an end in mid-2024, with a target to provide digital skills to five million citizens by mid-2024 — with a total investment of Rwf5 billion on the part of the Government, according to information from the Ministry of ICT and Innovation.

The programme’s delivery approach is based on the model of recruiting young women and men with digital entrepreneurship ambition – Digital Ambassadors (DAs) – to provide digital literacy training to citizens, such as on how to access e-Government and other digital and mobile services through Irembo, which is an online portal that serves as a gateway to different public services.

The initiative is in line with Rwanda’s target to achieve digital literacy for all youth (16 to 30-year-olds) and at least 60 per cent among adults, under the first National Strategy for Transformation (NST1) which will conclude next year.

On June 1, during a session with the Senate that was looking at ICT development in Rwanda, ICT and Innovation Minister, Paula Ingabire, said that 35 per cent of the Rwandan adult population was digitally literate, which she said was a low rate.

She indicated that there were about 100 digital ambassadors last year (2022), while about 450 more were recruited two months ago, “and they will increase to 1,500 countrywide by the end of this year [2023].”

3. Development of fuel strategic reserves (Rusororo)

The development of 60 million litres for the Government of Rwanda’s fuel strategic reserves (Rusororo), in Gasabo District, was allocated Rwf13.5 billion.

The Energy Sector Strategic Plan 2018/19 – 2023/24 by the Ministry of Infrastructure states that the target for the petroleum subsector was to establish reserves to cover three months of usage. It indicated that storage levels were 74 million litres [as of 2018], with facilities under construction to take the amount to 112 million.

“By 2023/24, it is forecast that 198 million litres of petroleum will be in reserve across a number of storage facilities, both public and private. This target will be reviewed and amended based on the latest available demand projections,” the strategic plan reads in part.

4. Export Targeted Modern Irrigated Agricultural Project

The Export Targeted Modern Irrigated Agricultural Project (ETI) is designed to address the effects of drought and increase agricultural output by building resilience to drought.

In the forthcoming fiscal year, the Government projects an outlay of about Rwf20 billion for its execution.

In October 2013, Rwanda signed a $120 million loan agreement with the Export-Import Bank (EXIM Bank) of India for the implementation of the project in the Mahama, Mpanga and Nyamugali sectors in Kirehe District of Eastern Province.

It was expected the project would be completed by the end of 2017. However, the project stalled and was costing Rwanda in terms of loan repayment expensesvj.kmdmvc,.vvcm,./`”|:{ojyhygu45, according to the 2020 report by the Auditor General.

It was envisaged to irrigate at least 7,000 hectares, and set up a food processing plant as well as a 12 MW solar power plant, among other facilities.

But, only 877 hectares or 12 per cent of the planned farmland, had been put under irrigation in Mpanga as of October 2020, while $17.1 million or 14.32 per cent of the total funds had been disbursed by India EXIM Bank.

Meanwhile, information from the Ministry of Agriculture and Animal Resources suggests the execution of the project was being revived.

5. Provision of subsidy for seeds and fertilisers to farmers

Seeds and fertilisers are key farm inputs in food production. To this end, it is projected Rwf37.7 billion will be spent on offering financial support to farmers so that to be able to afford these important ingredients.

6. Commercialization and De-Risking for Agricultural Transformation Project

The Commercialization and De-Risking for Agricultural Transformation Project (CDAT), which is funded by the World Bank Group at a tune of $300 million, is a five-year initiative running from 2022 through April 30, 2027.

It aims to commercialise and attract investments in the agriculture sector in Rwanda through irrigation, insurance and affordable financing, according to officials.

In the next fiscal year, it will get Rwf45.5 billion in support under the national budget.

Among other interventions, the project seeks to provide low-interest loans to farmers, compared to other available credits on the market. Information from the Ministry of Agriculture and Animal Resources shows that 90 per cent of the loan will be given out to farmers at a subsidised interest rate of 8 per cent (CDAT Interest Rate), and 10 per cent of the loan will be at the normal lending rates of the different participating financial institutions.

Also, it will finance public investments in the seeds sector, and develop and rehabilitate irrigation systems on 17,673 ha, among others.

7. Ngoma-Ramiro Road Upgrading Project (Rwf18.4 billion)

This project will upgrade and pave the about 53-kilometre road between Ngoma and Ramiro. The road is of regional importance since it connects Rwanda to the neighbouring countries such as Burundi and DRC, according to MINECOFIN

The Ministry said the road upgrade will facilitate the movement of residents between Ngoma, Bugesera districts and contribute to improve regional transportation from the Indian Ocean through the Central Corridor, namely from Tanzania (Dar es Salaam) to Rwanda, the ministry indicated.

The road is also expected to function as a by-pass and main road for transport of goods from Dar es Salaam Port to Kigali, supplementing the congested Ngoma-Kayonza Kigali road, indicated MINECOFIN.

On March 22, 2018, the Government of Rwanda and Government of Japan signed a financing agreement worth 7.67 billion yen (around $68 million in 2018, and $54 million at current exchange rates) for the Ngoma-Ramiro road upgrading project.

8. Second Rwanda Urban Development Programme (RUDP II)

RUDP II is expected to provide basic infrastructures in secondary cities and address unplanned settlements and control floods in the City of Kigali, among other interventions.

The RUDP II developers said its particularities consist of the comprehensive upgrading of informal settlements as enhancement of resilient infrastructures like Gikondo and Nyabugogo wetland rehabilitation, according to its developers, and the rehabilitation of six identified flood-risk hotspots (of Kinamba, Rugunga, Rwandex-Majerwa, Mulindi, Masaka, Gacuriro).

In the City of Kigali, the four unplanned settlements selected are Mpazi in Nyarugenge District, Gatenga in Kicukiro District, and Nyagatovu and Nyabisindu both located in Gasabo District.

The Government has earmarked some Rwf45.5 billion for RUDP II implementation in the next financial year.

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