Kagame Plunged Rwanda Into US$7.4 Billion Debt After Donors Reduced the Country’s External Debt from US$1.6 Billion to US$467.1 Million under the Heavily Indebted Poor Countries Initiative

By David Himbara

Under the Heavily Indebted Poor Countries (HIPC) Initiative, the larger part of Rwanda’s external was written off between 2000 and 2008. Under HIPC, donors struck off US$1.4 billion from Rwanda’s external debt.

The result was described by the International Monetary Fund (IMF) as follows: “Rwanda’s nominal stock of external debt reached US$1.6 billion…

After full delivery of the assistance committed under the HIPC Initiative at the decision point, it is estimated at US$467.1 million.”

In terms of debt/GDP ratio, Rwanda’s debt was 119.5 percent of the GDP before the donors wrote off Rwand’s debt, dropping to 19.5 percent of the GDP after donor debt forgiveness.

Fast forward to 2020 – piloted by General Paul Kagame, Rwanda acquired massive debt, increasing it from US$467.1 million to RWF6.9 trillion or US$6.8 billion which is equivalent to 78.1 percent of the GDP.

And in August 2021, Kagame acquired a new loan of US$620 millionwhich brings Rwanda’s external debt to US$7.4 billion.

What accounts for this madness? RwandAir is the biggest culprit, followed by the Kigali Convention Centre, Kigali Basketball Arena, and the New Bugesera International Airport.

Stay tuned.