33.2 C
Accra
Monday, February 17, 2025
Independent AfricaRwanda pays back $400 million in Eurobonds amid economic hardships

Date:

Rwanda pays back $400 million in Eurobonds amid economic hardships

Rwanda pays down a $400 million Eurobond despite Despite pressure on the nation’s finances brought on by ongoing global shocks linked to the prolonged impact of the Covid-19 pandemic, the war in Ukraine, and the appreciation of the US dollar, Rwanda has successfully repaid its $400 million Eurobond.the strain on its finances

The EastAfrican has learned that the full payment, which was due this week, was successfully made.

Officials from Rwanda’s Ministry of Finance and Economic Planning say the repayment was made possible partly due to the availability of financing from the International Monetary Fund (IMF) that allowed the government to make savings.

“The government has set aside $63 million as part of the International Monetary Fund’s Special Drawing Rights (SDR) allocation that it received in 2021 as support to fight against the impact of Covid-19 on the economy,” the finance ministry told The EastAfrican.

“This foresight and proactive measure by the government have significantly reduced the risk of default and allowed a successful repayment of the remaining 15.1 percent of the 2013 Eurobond,” the ministry added.

However, Rwanda successfully managed to reduce its debt burden during the pandemic when it took advantage of the low-interest rate environment and issued the second $620 million Eurobond, using part of its proceeds to repay part of the $400 million.

The 10-year Eurobond ($620 million) issued in April 2021 attracted a coupon rate of 5.5 percent, lower than the 2013 rate of 6.625 percent.

The lower yield led to a reduction in its annual interest payments over the next 10 years, which has helped to make its debt sustainable.

While the government has aggressively borrowed in recent years to finance economic recovery and development projects with public and publicly guaranteed debt rising sharply to 78.3 percent of GDP in 2021 up from a pre-pandemic figure of 60.7 percent of GDP in 2019.

However, approximately 80 percent of this debt is concessional with development finance institutions with low-interest rates and long maturity.

[forminator_poll id="710479"]

Latest stories

South Africa’s HIV crisis deepens amid US aid freeze

A 19-year-old unemployed woman, Nozuko Majola, from a rural...

Netanyahu applauds Trump’s daring plan for Gaza during meeting with Rubio

Israel's Prime Minister, Benjamin Netanyahu, announced that he is...

Petrol, diesel prices to decline – IES

The Institute for Energy Securities (IES) predicts a slight...

45% of young men have never approached a woman – Study

A recent study by DatePsychology has revealed that nearly...

Trump files Supreme Court appeal on removal of US agency leader

Former President Donald Trump has asked the US Supreme...

Related stories

South Africa’s HIV crisis deepens amid US aid freeze

A 19-year-old unemployed woman, Nozuko Majola, from a rural...

Deadly mine collapse in Mali claims the lives of many

At least dozens of people, primarily women, have tragically...

Liberia: Over 450 govt officials suspended over failure to declare assets

Liberian President Joseph Boakai has suspended more than 450...

Congolese musician fatally shot while filming music video in conflict-hit Goma

Delphin Katembo Vinywasiki, widely known as Delcat Idengo, has...

Gunmen ambush bus in Upper East, kills 1 injures 5

A bus traveling from Bawku to Bolgatanga in the...

Ramaphosa defends land reform amid Trump and Musk criticism

South African President Cyril Ramaphosa has spoken with billionaire...