Effect of Exchange Rate Volatility on Budget of the Stelir Project in Rwanda: A Project Management Perspective (2022-2025)
Yvonne Uwase Mugemanyi and Mburamatare Daniel
University of Kigali
Email: yvonneuwase96@gmail.com
Abstract: This study examined the effect of exchange rate volatility on the budget of the STELIR Project in Rwanda from 2022 to 2025. Specifically, it assessed budget variations arising from RWF/USD exchange rate fluctuations during the implementation of the STELIR Project. The study employed a case study research design using both quantitative and qualitative approaches. The target population comprised 38 STELIR Project staff, including financial specialists, operations managers, support staff, and technical staff, together with 20 key informants from the British Council, Mastercard Foundation, Rwanda Education Board, and STELIR Project Team. Census sampling was used for project staff, while purposive sampling was used to select key informants. Data were collected using structured questionnaires, semi-structured interviews, and documentary review of project budgets, expenditure reports, procurement records, financial statements, supplier invoices, and budget revision documents. Data were analyzed using descriptive statistics, Pearson correlation analysis, simple regression analysis, and thematic analysis. The findings indicated that RWF/USD exchange rate fluctuations contributed to variations between planned and actual project expenditure. Pearson correlation analysis revealed a statistically significant relationship between exchange rate volatility and budget variations (r = −.538, p < .05). Regression analysis further showed that exchange rate volatility explained 28.9% of the variation in budget outcomes (R² = .289, p < .05). The study concludes that exchange rate fluctuations affected financial planning, procurement costs, forecasting, and budget control during project implementation. The study recommends strengthening exchange rate monitoring, adopting flexible budgeting, establishing appropriate currency contingency provisions, and improving coordination between financial and procurement functions.
