- Rwanda issues $7.5m bond to boost capital markets
- Five-year paper offers 11% interest amid rising public debt
KIGALI, RWANDA – Rwanda has reopened a five-year Treasury bond worth $7.5 million, offering investors an 11% annual coupon as the government pushes to deepen its domestic capital markets.
The National Bank of Rwanda (NBR) announced the sale this week, saying the instrument is intended solely for capital-market development. Treasury bonds in Rwanda have traditionally been issued for infrastructure, education, health or debt-repayment programmes.
According to the central bank, bids are open to banks, pension funds, companies and individuals. The allotment process covers domestic retail buyers as well as local and regional institutional investors, reflecting the government’s effort to broaden participation in the country’s financial markets.
Capital-market push in a high-debt environment
Authorities say reopening the benchmark bond is part of a long-term strategy to strengthen Rwanda’s capital markets and support economic stability. Officials argue that expanding domestic borrowing tools not only raises funds but also anchors the development of a more sophisticated financial ecosystem in one of Africa’s fastest-growing emerging economies.
The NBR said the five-year bond will also help Rwanda diversify financing sources as public debt continues to rise. Rwanda’s total public debt stood at 77.3% of GDP as of June 2024, with external debt forming a significant share.
The bond will trade on the secondary market at multiples of $69 for non-competitive bids and $34,450 for competitive bids, the central bank said.
In a statement, the central bank added that rediscounting will be possible only when no buyers are found on the Rwanda Stock Exchange. “The National Bank of Rwanda will rediscount the bond as the last resort at the prevailing market rate upon written confirmation that there is no buyer from the Rwanda Stock Exchange,” it said.
Rwanda has increased its reliance on domestic and regional borrowing in recent years through the issuance of Treasury bonds ranging from three to 20 years.
On tax liabilities, the NBR said: “The interest will be subject to a withholding tax at the rate of 5% for all investors resident and non-resident who have opened a CSD account through licensed commercial banks or capital market intermediaries.”
Market analysts say the reopening of the bond underscores Rwanda’s commitment to maturing its debt market, even as the government faces questions about long-term debt sustainability.
