By David Himbara
Kagame says he will go into Eurobond bond debt to build a vaccine plant. It is easier for a camel to go through the eye of a needle than for Rwanda to acquire another Eurobond debt.
General Paul Kagame says he is seeking capital via Eurobond debt to build a manufacturing plant for the Covid19 vaccine in Rwanda. This is what the General said: “Rwanda has been having a very good B+ credit rating. The Eurobond is one good option that will provide us with the resources we are looking for.” Kagame is in fantasy land. Rwanda’s debt currently stands at 80 percent of GDP. To get into more debt, Kagame would need approval from the International Monetary Fund (IMF). His government must abide by the Technical Memorandum of Understanding (TMU) with IMF under which Rwanda cannot take any economic policy action without the IMF’s approval. Here is how the Kagame government confirmed in December 2020 that Rwanda will not implement any policy without IMF’s assessment:
“COVID-19 outbreak and the related deterioration of global economic conditions are having an adverse effect on Rwanda’s economic activity in 2020. The shock is affecting our economy through weaker demand from key trading partners, lower FDI and remittances, near cessation of tourism, and disruptions in regional and global supply chains. Real GDP growth…is now projected at around -0.2 percent…The implementation of our program will continue to be monitored…as described in the PS and the attached Technical Memorandum of Understanding (TMU). Reviews by the IMF will continue to be completed on a semi-annual basis to assess program implementation progress and reach agreements on additional measures that may be needed to achieve its objectives…We will consult with the IMF before adopting any such measures or in advance of revisions to the policies contained in this PS. Moreover, we will provide all information requested by the IMF to assess the implementation of the program.”
Let us see how Kagame gets past the IMF to get into more debt via Eurobond. It is easier for a camel to go through the eye of a needle than for Rwanda to acquire another Eurobond debt.