RWANDA/ECONOMY: Next week Kagame’s regime will issue yet another Rwf 15 billion treasury bond. Who is actually buying these junk bonds?

(1) Is it individual Rwandan investors being forced by Kagame (like he forces them to escort him on his international vacations)?

(2) Is it investors from EAC? These are usually more sophisticated investors and wouldn’t take on so much risk.

(3) Or is it Rwandan institutional investors? Is Kagame forcing institutions such as Social Security to invest in his junk debt instruments? If this is the case, then every Rwandan is on the hook to lose hard earned money to criminal Kagame.

“In the previous bond issuance Institutional investors (Pension funds, insurance companies;..) participation increased from less than 10% to more than 50%”. Therefore, if you look closely, Kagame’s junk bonds are nothing more than an official vehicle to embezzle public savings into Kagame’s coffers. According to the latest announcement, Kagame needs financial resources to continue funding his criminal activity and his foreign donors have not been generous lately.

And if you think Rwanda Rwanda’s economic outlook is as rosy as Kagame is painting the picture, you probably need to get your head examined.

The maturity dates of all outstanding debt instruments extend well beyond 2017, a year of scheduled regime change in Rwanda. All analysts agree that 2017 will be the year of unprecedented uncertainty in Rwanda, especially if Kagame attempts to hold on to power. These analysts include US ratings agencies, such Fitch, that have issued a sovereign rating for Rwanda in recent years. More than anybody else, these ratings agencies understand that uncertainty is a no-go zone when it comes to investing.

Meanwhile, as things stand today, Kagame is poised to alter Rwanda’s constitution and rig yet another election so he can stay in power. In these circumstances, uncertainty will not come as a surprise to anyone. It is guaranteed.

Bosco Mutarambirwa

See Finance Ministry’s announcement of the new bond issue at…