President Kagame speaking to Bloomberg TV’s Jennifer Zabasajja at the 3rd Qatar Economic Forum. Photos/Urugwiro Village.
President Paul Kagame says Rwanda would consider going back to the Eurobond market to borrow more money if the need arises, following the country successfully paying back its initial $400 10-year Eurobond which matured this year.
The Head of State, speaking on Tuesday at the 3rd Qatar Economic Forum in Doha, said that Rwanda would have an appetite to borrow more to finance strategic projects but did not say when or how much the country would go for.
Asked by Bloomberg TV’s Jennifer Zabasajja if Rwanda would potentially consider going back to the international market to borrow again, President Kagame said that whenever there is a need Rwanda would go back.
“Well, it depends on the problem we want to address,” President Kagame said when asked how much Rwanda would consider borrowing, adding that Rwanda wouldn’t go back for the same amount but rather more.
“We go back for more because we’ve been growing. We have investments to make in infrastructure, we have investments to make in the area of manufacturing as I have mentioned to you,” President Kagame said.
“We are busy building a country, so we need resources which will always not be available until we go to the market,” he added.
President Kagame said that Rwanda intends to continue to be a reliable and responsible borrower, putting resources to good use and paying back on time.
“First of all, we wanted and have been able to establish ourselves as people that are reliable, that can pay our debt. That is key. We want to build on that and continue doing more,”
Kigali Convention Centre (KCC) is one of the projects which was financed through the initial Eurobond the Government of Rwanda issued.
“We don’t go to the market or borrow for the sake of it. We want to invest in those sectors that I have mentioned to you to have good returns and justify our investments and also contribute to the wellbeing and development of our people,” President Kagame said.
Value for money
Building on Rwanda’s ability to borrow and repay at the time when African countries are reporting bad debts and unfair terms from lenders, President Kagame said it goes down to how lenders and borrowers negotiate.
The Head of State said both the lender and borrower have to identify what works but the borrower most importantly has the duty to identify which areas to cover, not just borrowing for the sake.
“Which areas do you really want to cover? Where do you want to invest this money so that you can easily see predictability in the growth?” he said, adding that it takes a conversation between the two.
Regarding African countries grappling with debt, a situation which was compounded by the Covid-19 pandemic and other global crises, President Kagame said that the continent was left disadvantaged in many ways.
He gave an example where in the wake of the Covid-19 pandemic African countries attempted to push for an increase in special drawing rights under the International Monetary Fund (IMF) but they fell short of expectations.
He said the continent only managed to be given special drawing rights to a small portion of the money that was available- just $33bn when it was expected to have access to over $100bn, given the need at the time.
President Kagame said the problem was not lack of money -it was available but countries which did not need the money, especially developed countries, had more drawing rights than African countries.
He however said that the IMF did its best to support struggling African economies but added that there is a need for more discussions between countries and the international community to see how this inequality can be addressed.
In August 2021, the Government of Rwanda said it had successfully raised US$ 620 million through the issuance of a 10-year Eurobond, the proceeds of which were used to retire an existing $400 Eurobond issued in 2013, which was due in 2023 while the remainder would be spent on key projects.
