Role of Fiscal Policy in Reducing Poverty and Equitable Income Distribution in Rwanda Since 1994

Document Type : Original Article

Author

PhD in Economics, the General Administration of Managing Director Affairs, the Telecom Egypt Company, Smart Village, Egypt

Abstract

Following the devastating 1994 ethnic conflicts, Rwanda's economy was severely impacted, leading to widespread poverty. The government recognized the crucial role of fiscal policy in achieving its 2020 vision of reducing poverty and promoting income equality. To achieve this, the government implemented reforms focused on developing key sectors such as agriculture, health, education, and infrastructure while reducing spending on other areas. The tax sector was also reformed to finance development projects. This study explores the impact of fiscal policy on poverty reduction and income distribution in Rwanda since 1994. Despite progress, including increased per capita GDP, reduced poverty rates, and improved health, education, and residential sector indicators, challenges persist, such as rural poverty, high dropout rates from higher education, and an imbalance in trade. The study suggests that Rwanda needs to reassess its industrial sector development to achieve its poverty reduction and income distribution goals.

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