Public Finance Reform II

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Rwanda's economy has been growing by an average of around seven percent annually for several years. Tax revenues in relation to GDP have also risen continuously in recent years. This development fits well with Rwanda's efforts to sustainably expand the scope of action of the Rwandan government (GoR) through increased domestic revenues and at the same time reduce dependence on donor support. In recent years, the government has made considerable progress in building a robust and modern public finance system. However, weaknesses remain, particularly in the areas of mobilization and management of domestic revenues, the effective implementation of the financial management information system (IFMIS), accounting and internal auditing, and external control. For this reason, the project supports the GoR in implementing the national Public Financial Management (PFM) reform program. The aim of the PFM agenda and thus also of the FC measure is to sustainably increase the quality and performance of public financial management at all levels of government. Key activities in the project include the digitization of IFMIS workflows and the Ministry of Finance archives, as well as the development of investment manuals, processes and training materials that help state-owned companies make sound investment decisions. The FC measure is implemented in the form of a joint basket financing between KfW, the Belgian cooperation ENABEL and the GoR and builds on previous measures to support the PFM reform process. The Rwandan Ministry of Finance and Economic Planning is responsible for the implementation of the PFM sector strategy and the management of the PFM basket. The FC contribution for the basket financing amounts to up to EUR 4.0 million for the period of the Rwandan fiscal years 2021/22 to 2023/24.