A couple of weeks ago Rwanda auctioned a 10-year bond on international capital markets. The issue was 7.5 times over-subscribed (USD 3 billion chasing a USD 400 million offering) and the yield came in at 6.875% (not very different from what some troubled eurozone countries have recently found themselves paying).
According to the FT, '...investors were impressed by Rwanda’s economic growth, relative stability and reformist drive.' And as the PS to the Rwandan Ministry of Finance is quoted as saying, 'It shows that investors are willing to lend to African countries without commodities as well.'
Rwanda undoubtedly has one of the stronger PFM systems in this part of Africa and has been growing fast economically. All the same, a very large share of public spending - the FT says 38% - is still financed by, sometimes fickle, donors and the security situation in the near-region is not ideal. Is the interest in Rwandan government debt telling us as much about the depth of the recession in the western world as it is about economic growth and the quality of PFM in Rwanda?
