Every year, the finance minister carries this bag to Parliament around this time to tell the nation what the next financial year will look like
Rwanda’s national budget for the 2025/2026 fiscal year has jumped to Rwf 7.0325 trillion, a bold 20.9% increase from the revised Rwf 5.8164 trillion of the previous year.
This surge comes despite a minor drop in foreign grants—down by Rwf 36 billion, or just 0.5% of the total budget—signaling the government’s growing confidence in its ability to self-finance development priorities.
Finance Minister Yusuf Murangwa presented the budget to a joint session of Parliament this Thursday. He describes the budget as a reflection of Rwanda’s fiscal resilience, strategic borrowing, and evolving domestic resource mobilization.
Where the Money Will Come From
The 2025/2026 budget will be financed from three key sources:
- Domestic revenue: Rwf 4.1052 trillion (58.4%)
- Foreign loans: Rwf 2.1519 trillion (30.6%)
- Foreign grants: Rwf 585.2 billion (8.3%)
This is a noticeable shift from the previous fiscal year, where grants made up 12.7% of the total budget. The reduction is seen as part of a global trend rather than a Rwanda-specific signal.
As conservative governments gain ground in the West, the overall appetite for foreign aid is declining, with more nations prioritizing domestic spending over international development assistance.
This changing global sentiment has altered how much support Rwanda—and many other developing countries—can expect.
But contrary to earlier predictions that Rwanda’s budget could collapse amid Western scrutiny over its alleged involvement in eastern DR Congo, the impact has been minimal.
Murangwa: Grants Are Not a Foundation
Government-to-government grants are financial gifts given by one country’s government to another country’s government. It’s free money from one government to another to help solve problems, improve lives, or strengthen cooperation—with no repayment required.
Some grants come from international bodies like the UN, EU, or World Bank – some or which also do give loans.
Development partners at a retreat together with government officials to plan.
The grants are often used to fund things ranging from food security, training, or peacebuilding programs.
For Rwanda, the money usually comes through development agencies (like USAID for the U.S., or DFID for the UK, SIDA for Sweden, or GIZ for Germany) and is sometimes managed jointly with local institutions or NGOs.
Finance Minister Murangwa, in a previous Parliamentary appearance in May, noted that there would be minimal impact even if grants stopped, emphasizing that grants are designed to support short-term social programs, not long-term national development.
That view was echoed earlier this year by Health Minister Dr. Sabin Nsanzimana. Addressing a health sector conference, he acknowledged that USAID funding had been stopped, like everywhere.
However, he clarified that the some of the affected funds were allocated to non-infrastructure activities, such as strengthening health systems and training medics.
“We are now integrating these programs into the national budget,” Dr. Nsanzimana said, adding that the government is adopting cost-efficient methods, like short-format medical training, to bridge funding gaps.
Understanding the Debt Numbers: Why 78% Isn’t Alarming
Addressing concerns over Rwanda’s rising public debt—which has now reached 78% of GDP—Finance Minister Murangwa calmed persistent worry over the size.
He explained that although the figure may seem high in percentage terms, the structure of Rwanda’s debt tells a very different story.
More than 80% of Rwanda’s debt is concessional, meaning it comes with extremely low interest rates and long repayment periods. These are fundamentally different from commercial loans, which typically carry much higher interest and stricter repayment conditions.
To illustrate this point; a $1 billion concessional loan from South Korea, which carries a symbolic interest rate of 0.01%, a 10-year grace period, and a 25-year repayment window.
This type of financing, is evidence of international confidence in Rwanda’s economic direction and repayment capacity, according to Government.
14 Tax Reforms to Mobilize Revenue
To further strengthen domestic financing, the government is rolling out 14 tax reforms over the next five years, beginning in 2025/2026.
These reforms will broaden the tax base and improve compliance, with a projected revenue of Rwf 350 billion over five years—about Rwf 70 billion annually.
Despite rising geopolitical tensions and skepticism over foreign aid, Rwanda is pushing forward with its largest and most self-reliant budget to date.
The message from government is clear: the era of dependency is over. Instead, Rwanda is banking on domestic reforms, strategic international partnerships, and efficient statecraft to power its development ambitions.
As Minister Murangwa prepares to defend this vision in Parliament, the 2026 budget will serve not just as a fiscal plan—but as a statement of national resolve.
Major Infrastructure Investment Drives Budget Surge
A significant factor behind the 21% jump in the 2025/2026 budget is the government’s heavy investment in the Bugesera International Airport project.
According to the Budget Framework Paper for 2025/26–2027/28—Rwanda’s official three-year fiscal strategy document—an estimated Rwf 701.8 billion is allocated under equity and investment fund shares.
Of this, Rwf 699.4 billion is specifically earmarked for the Bugesera airport construction, while Rwf 2.4 billion is allocated to the Development Bank of Rwanda (BRD).
This massive spending on Bugesera alone accounts for about 57% of the total Rwf 1.2 trillion increase projected in the 2025/2026 budget, underscoring the government’s prioritization of strategic infrastructure to drive long-term economic growth.
Adding to this financing mix is investment from Qatar, which is poised to acquire a 60% stake in the Bugesera airport project.
This partnership highlights Rwanda’s strategy of combining domestic resources, concessional loans, and foreign private investment to deliver large-scale development projects without over-reliance on grants or commercial debt.
Another reason spending will increase is that thousands new teachers and medical personnel will be hired to boost. Agriculture
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