Rwanda to sell 5-year Treasury bond

Rwanda is set to sell a five-year treasury bond worth $12.12 million this month, as part of the government's efforts to develop the capital market and fund infrastructure projects. The move signals Rwanda's commitment to boost its economy and improve its infrastructure to drive growth and attract investments. The Principal Financial Analyst at the National Bank of Rwanda, Jean-Marie Rugambwa, highlighted the importance of the bond issuance in an interview with CNBC Africa. Rwandan government's focus on infrastructure development has been a key driver behind the decision to issue the treasury bond. Rugambwa emphasized that the bond issuance plan is aimed at financing the budget gap and facilitating the implementation of crucial infrastructure projects that have already been earmarked in the financial budget. The bond proceeds are expected to contribute to funding projects such as the expansion of the port and other key infrastructure developments. The push to involve a wider range of investors in the secondary market is a strategic move by Rwanda to deepen its capital market and enhance liquidity. Rugambwa highlighted ongoing initiatives to educate the public about the benefits of investing in government bonds and to establish market mechanisms that will boost activity in the secondary market. By engaging with various stakeholders, Rwanda aims to broaden the investor base and create a more dynamic secondary market. In light of the potential impact of a Federal Reserve rate hike, Rugambwa expressed optimism about the attractiveness of Rwanda's government bonds to investors. Despite the anticipated hike, foreign investors have shown a strong appetite for Rwandan bonds, reflecting confidence in the country's economic prospects. Rwanda has successfully attracted investors from neighboring countries such as Uganda and Kenya, highlighting the growing interest in the Rwandan bond market. Regarding the participation of commercial banks in government bonds, Rugambwa downplayed concerns about the allocation of funds. He noted that diversifying the investor base is a positive development and emphasized the importance of commercial banks focusing on lending to the economy. By attracting a variety of investors, Rwanda aims to create a balanced investment landscape that supports both government funding needs and private sector growth. Overall, Rwanda's decision to issue a five-year treasury bond aligns with its strategic vision to drive economic growth through infrastructure development. The bond issuance not only provides a financial avenue for funding key projects but also signifies Rwanda's commitment to building a robust capital market and attracting diverse investors to support its long-term economic goals.