Kagame’s Capital Market Is Sick: Only 4.8% Bonds Held By Foreign Investors

By David Himbara

General Paul Kagame’s Rwanda barely has a capital and bond market for mobilizing money for large development projects. Foreign investors do not buy Rwandan bonds issued in Rwandan francs. Currently, only a tiny fraction of outsiders buy bonds issued in Rwanda. The Kagame regime itself admitted this dismal state of Rwanda’s bond market on January 20, 2020:

“Currently only 4.8 percent of domestically issued bonds are held by non-residents.”

Rwandan Stock Exchange’s market capitalization remains tiny. Its capitalization is US$3.6 billion. Comparatively, market capitalization of the Nairobi Securities Exchange is US$24.7 billion. Moreover, of the eight companies listed on Rwanda Stock Exchange, four are Kenyan cross-listed from the Nairobi Securities Exchange.

The World Bank to the rescue

The World Bank floated a bond to the amount of Rwandan Franc 37 billion or US$40 million. The buyers of the bond’s coupons will earn 9.25 percent with a maturity date of January 20, 2023. The World Bank announced its goal as follows:

”With this transaction, the World Bank is contributing to the development of the country’s local capital market and providing an opportunity for international investors to purchase a World Bank bond while gaining exposure to the growing Rwandan economy through the currency.”

Kagame is always boasting that Rwanda is attracting huge amounts of foreign investments. The tininess of Rwanda capital market is further proof if any were needed to show that Kagame’s Rwanda is a banana republic.