Rwanda’s economy is expected to recover by 5.1% this year after contracting 3.4% in 2020 due to the COVID-19 pandemic.
The financial authorities said the growth is expected to accelerate to 7.0% in 2022 and an average of 7.8% in 2023-24, driven by robust activity in agriculture, industry, mining and construction,
The National Treasury minister Richard Tushabe, said Rwanda plans to increase spending in the fiscal year starting July 1 by 10%, to 3.807 trillion Rwandan francs ($3.82 billion) and donors will fund 16% of the budget, with the rest coming from tax revenues and debt, during the preliminary national budget presentation for the 2021/22 fiscal year
Tushabe said Rwanda will borrow 651.5 billion francs internationally but did not give details before Rwanda presents its final budget in June.
The East African nation’s debt level climbed by 13% last year due to borrowing aimed at combating COVID-19, he said.
The country’s total public debt rose to 71% of GDP at end of 2020 and is seen reaching 79.7% at the end of this year.
Rwanda imposed one of Africa’s tightest coronavirus lockdowns that battered the country’s tourism and other key sectors.
Meanwhile Centrale des Syndicats des Travailleures du Rwanda (CESTRAR), an umbrella for trade unions in Rwanda has urged the government to ensure that the National Recovery Fund also supports workers affected by the Coronavirus pandemic in all sectors of the economy.
“Many workers lost their jobs that would be feeding the families. The recovery fund should take this into account,” said African Biraboneye, the General Secretary of CESTRAR.
He reiterated there is a need for fast-tracking the establishment of minimum wage for workers.
“Lack of minimum wage leads to wages that are not in line with the current cost of living,” he said.
He also urged employers to give written employment contracts to their employees adding that over 80 % of workers in Rwanda are in the informal sector.
“We need the transition from informal to formal economy. This could change workers’ lives and also boost the national economy through paying taxes and others,” he said.