Rwanda’s economic growth is expected to slow to 2 per cent this year from 9.4 per cent in 2019 as the COVID-19 pandemic hits tourism, transport and hospitality, the finance minister said on Thursday.
Presenting the draft budget for 2020-21 fiscal year, Uzziel Ndajigimana said growth was expected to rebound next year to 6.3 per cent and improve further to 8 per cent in 2022.
He said the small east African nation plans to increase government spending by 7.5 per cent in the 2020/21 fiscal year to 3.245 trillion Rwandan francs ($3.43 billion).
Donors will fund 15.2 percent of the budget with the rest coming from revenue and debt, Ndagijimana said.
He said Rwanda would borrow from abroad 783.4 billion francs but did not give details.
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“Government investments will acquire 306.5 billion including a part allocated to supporting private companies hurt by Covid-19 effects and expansion of RwandAir,” Ndagijimana said, referring to the government-owned airline.
Rwanda, like other East African nations, will present its final budget in June.
Like many other countries, Rwanda has suspended international passenger travel and restricted movement and banned social gatherings within the country to contain the novel coronavirus.
Ndajigimana said the hotels and restaurants sector will contract by just under a third, while transport will contract 1.9 per cent due to the stopping of flights.
Agriculture will grow 3 per cent from 5 per cent last year, while industry will expand 4 per cent from 17 per cent a year ago. Services will grow 1 per cent from 8 per cent due to the impact of the COVID-19 pandemic on tourism and conferences, Ndagijimana told parliament.
Rwanda has 314 confirmed coronavirus cases, with no deaths and 216 recoveries out of 53,317 tests done so far.
The International Monetary Fund gave Rwanda $109.4 million in emergency coronavirus funding in April.