Rwandans will be forced to tighten their belts further after the government assented to austere demands from international lenders in a desperate bid to shore up the franc in the face of falling export earnings.
Although government expenditure will increase slightly to Rwf1.95 trillion ($2.60 billion) in the 2016/17 financial year starting next month, from Rwf1.81 trillion ($2.31 billion) currently, it is a drop of two percentage points as a proportion of the economy.
Funding for projects is thus expected to drop significantly as Kigali tightens expenditure including restraining imports in order to conserve foreign exchange.
The country has nascent private enterprises and the government is the key driver of economic activities. This would in turn mean less money going to suppliers and projects being deferred in some cases. In essence, the spending power of the average citizen will be affected. FULL STORY