Rwanda preparing next Eurobond issue – Finance Minister

by Reuters 0

However, the size and timing of it is still being worked out, finance minister Claver Gatete said.

The landlocked African nation of 11 million people has been attracting a steady stream of investors and firms drawn by a small but growing market, and its debut 400 million dollar Eurobond in 2013 was heavily oversubscribed.

“We want to get back to the market, but we are still working on the proper projects, which ones are they, what will be the size, when will be the payment,” Gatete told Reuters on Monday in an interview on the sidelines of a conference in London.

He also said he was confident the economy would grow this year by at least the 6 per cent the government had predicted in its budget.

“That is the minimum, we will not be below that.”

Rwanda will also continue its quarterly issuance of local bonds in 2015 to deepen its capital markets, though not at the expense of companies and other institutions, said Gatete. The last issue of 2014 will go ahead as planned in November.

“We will also look at it not just for us to (issue) the bond, but at the same time we also have to make sure we will not affect the private sector, to not compete for resources,” he said, adding Rwanda had to tap international as well as local debt markets to ensure steady growth.

In Rwanda, many depend on small farm plots and the country still relies heavily on foreign aid, which in fiscal 2013/14 accounted for 38 per cent of the budget. To diversify its economy, the country plans to attract more service industries and create a financial hub for Africa.

Investors have been attracted by Rwanda’s accelerating economy, low debt and recent political stability. Economic growth averaged 8.2 per cent from 2006 to 2012.

Spending on energy and transport would spur the private sector and attract foreign direct investment, and help transform the economy into a net exporter, the World Bank has said.

The government’s growth forecast for this year is above the World Bank’s 5.7 per cent estimate, which the bank slashed in August from 7.2 per cent, citing delayed spending on energy and transport and a slowdown of credit growth to the private sector.

Rwanda’s economic growth slipped to 4.6 per cent last year from 7.3 per cent in 2012 after donors cut aid over its alleged involvement in a conflict in the neighbouring Democratic Republic of the Congo, which Rwanda denied. Most of the bilateral assistance has resumed, the government has said.