By David Himbara
General Paul Kagame’s unquenchable thirst for borrowing has pushed Rwanda’s debt to US$7.1 billion which is projected to reach 84.1 percent of GDP in 2022. Rwanda’s top five creditors are
1) the World Bank, US$2.4 billion;
2) domestic lenders, US$1.5 billion;
3) the African Development Bank, US$1 billion;
4) domestic bonds, US$708.8 million;
5) and foreign governments, US$650 million.
The International Monetary Fund’s (IMF) says Rwanda faces “a moderate risk of external and overall debt distress.”
So, how does the regime intend to avoid a full blown debt stress? First, the regime seeks to convert short term external debt into long term domestic debt “to shield Rwanda from refinancing risk stemming from external shocks.”
Second, the regime raised US$620 million from the Eurobond market to buy back 85 percent of the existing US$400 million debt “to reduce the liquidity risks in the near term.”
Is Kagame’s excessive thirst for debt sustainable in the long-term?