Rwanda revises national budget upwards on expected bond proceeds

KIGALI (Reuters) - Rwanda revised upwards its national budget after accounting for expected proceeds from a sovereign bond which offset a decline in aid suspended by the West over accusations of arming rebels in neighbouring Congo.

Finance Minister John Rwangombwa told parliament on Thursday the new 2012/13 (July-June) budget for the central African country would be RWF 1549.9 billion, a 20 percent increase from the previous amount presented in June.

Rwanda said the increase was a combination of additional resources worth RWF 227 billion from sovereign bond proceeds and a reduction in the original budget of RWF 62.4 billion representing aid cuts.

Taking into account the performance of the July-December period, the budget for 2012/2013 was revised to reflect several factors, including the suspension of all bilateral donor budget support for the remaining fiscal year.

This amounted to a total of RWF 54.4 billion, and would be offset by the proceeds from a sovereign bond to raise $350 million (or RWF 227 billion), Rwangombwa said.

He declined to give further details on the bond, saying, "It's not issued yet, I can't give details until then."

Asked if he could say when it would be issued, the finance minister declined, adding that there were regulations that meant he could not give more details.

Rwangombwa said late last year it had planned to issue a Eurobond, but this was put off due to the negative publicity over the aid cuts.

Further, the minister said undisclosed amounts of budget support from the African Development Bank (AfDB) and the World Bank would likely be released In the second half of its fiscal year, and these were included in the revised 2012/13 budget.

In July, the United States and several other European states partially suspended aid to Rwanda after U.N. experts said senior Rwandan military officials have equipped, trained and directly commanded M23 rebels who in November briefly seized the city of Goma in eastern Democratic Republic of Congo.

Rwanda, which relies on donors for about 40 percent of its budget, has repeatedly denied the charges.

Rwangombwa said in December that the country might have to cut its 2013 economic growth forecast down to 6 percent from 7.6 percent if the aid remained suspended.

However, On February 1, Germany unfroze around 7 million euros in aid because Rwanda was taking steps "in the right direction" on ending the hostilities in the Congo.

In September, Britain unfroze about half of its aid to Rwanda after the country made efforts to solve a conflict.

The M23 rebels announced a unilateral ceasefire last month and the group is currently engaged in slow-moving peace talks with the Congolese government in neighbouring Uganda.?

Source: http://news.yahoo.com/rwanda-revises-national-budget-upwards-expected-bond-proceeds-075921293--business.html

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