This was during the annual development partners retreat of 2024 which was held in Rubavu district. During these sessions, government and it’s partners agree on the country’s priorities
President Paul Kagame has disclosed that some foreign donors who had previously suspended their aid to Rwanda have since reversed their decisions and released funds, easing pressure on the national budget.
The revelation came during a media engagement held on Liberation Day, July 4, where the Head of State was responding to questions about Rwanda’s surprising 21% increase in its 2025/2026 national budget.
Weeks earlier, Kagame had publicly urged Rwandans to prepare for tough times ahead, citing aid cuts by development partners, particularly in response to accusations linking Rwanda to the conflict in eastern DR Congo.
The remarks sparked public debate over how the government would meet its growing expenditure needs amid reduced foreign assistance.
Addressing the issue directly, Kagame explained that the increase in the national budget was not only a result of bold fiscal decisions but also influenced by unexpected shifts in donor positions.
“The rise of the Budget by 21% is due in part to; there were many priority needs, and we identified new sources where the money would come from,” said Kagame. “The resource envelope, including the tax loopholes which we haven’t been taxing, were closed thereby increasing revenue.”
The 2025/26 national budget, which now stands at over Rwf 7 trillion, was met with mixed reactions, particularly because of the timing. Citizens were still digesting Kagame’s earlier “tightening of belts” message when the Ministry of Finance announced a sharp budget expansion.
But the President offered clarity, noting that while aid cuts were real and immediate, the situation began to evolve behind the scenes.
“Another factor is that, the tightening of belts’ call I made was because some development partners had cut their aid due to ongoing conflicts — but then some have reversed their decisions and released their allocations,” Kagame revealed.
He did not name the countries or agencies involved, but his comments suggest diplomatic or behind-the-scenes reassurances have helped restore portions of Rwanda’s development financing.
President Kagame speaking during the media engagement on Liberation Day July 4
The President was careful, however, not to overstate the impact of the reinstated aid, stressing that the government had already shifted gears to safeguard the budget’s resilience.
“Even so, following the aid cuts, yet some went to areas that weren’t a necessity, we let that go. We also had to find alternative sources, and also conducted a vigorous reallocation,” Kagame added.
The alternative sources he referenced include a raft of domestic resource mobilization strategies. Rwanda recently announced plans to implement 14 tax reforms over the next five years, aimed at boosting revenue by Rwf 350 billion.
The government has also secured concessional loans, including a $1 billion deal with South Korea at 0.01% interest, repayable over 25 years.
Analysts believe this multi-pronged approach—anchored in increased tax efficiency, strategic borrowing, and reprioritization of spending—explains how Rwanda has managed to fund a significantly larger budget despite the aid uncertainties.
The budget prioritizes education, healthcare, infrastructure, and job creation, areas seen as key to sustaining Rwanda’s growth trajectory.
Kagame’s remarks on July 4 were also viewed as a message of transparency and reassurance, indicating that Rwanda is capable of navigating both diplomatic setbacks and economic shocks without derailing its national agenda.
The quiet reversal by some donors, while politically sensitive, also signals that aid decisions are not always final, and that engagement and negotiation remain critical tools in development diplomacy.
As the country marks 31 years since Liberation, Kagame’s comments remind Rwandans that economic sovereignty—anchored in domestic revenue, prudent spending, and adaptable strategy—remains at the core of the nation’s development model.
