IMF sees “stronger growth” as Rwanda debuts $450m bond

This climbing variety of beans – which grows upwards and is three times more productive than bush beans, has increased beans production massively (Photo: Neil Palmer/CIAT)

Despite slow growth in Rwanda’s previously booming construction sector, the International Monetary Sector said Tuesday that it will not affect economic growth as other sectors like agriculture are performing well.

“This will be partly offset by stronger growth in agriculture (food crops), for which the first harvest of the year was good, and an acceleration in foreign-financed investment projects,” said the Fund’s review team in Kigali.

“Economic activity has been quite resilient,” added the team in a statement.

The IMF team is in the country since Monday to April 18 to conduct the sixth review under the Policy Supports Instrument (PSI). This is a mechanism under which Rwanda has been progressively reducing IMF direct financing and instead getting technical support to put in place economic structures which will attract finance from the money markets.

“Performance under the IMF-supported program has been broadly satisfactory,” said the Fund. “Most quantitative indicators for end-December 2012 were met and good progress was achieved on the structural reform agenda.”

Rwanda plans to issue a euro bond in the coming days in the amount of US$400 million, announced the IMF. The Rwanda government has hired two leading global financial institutions – France’s BNP Paribus and U.S. Citi Group to handle the bond debut expected in July.

The road show was announced today in the Irish Stock Exchange and will be launched on April 18 in markets across Europe, Asia and the Americas.

The IMF says the international bond, expected to fetch some $450m, will be “used exclusively to retire short-term debt and complete strategic investment projects as planned”.