Kigali – The Report labeled “Debt Dynamics and Development Finance in Africa” mae up by the United Nations Conference on Trade and Development (UNCTAD) clealy shows that Rwanda and Ethipia are the most indebted nations in East African hemisphere for five past years.
The report assures that the rate of the debt is not alarming as both nations’ economies are performing better as one the Rwanda’s chief economists from the Ministry of finance and economic planning said
Economists who included Leonard Rugwabiza from the Ministry of economic Plan and Finance met in UN Economic Commission for Africa agreed that even though Rwanda and Ethiopia have huge debts from international donars, boh nations have set up policies to avoid deficits and therefore increase earnings and investments.
Since 2011 to 2014 loans from donors for East Africa increased to 13,3% as compared to the rest of African continent that where it increased at 9%.
Some of East African nations such as Djibouti and Burundi have internal economic challenges that disadvantage them to effectively pay the loans, as the World bank and IMF have reported.
The rate of the loans that Rwanda acquired from donors increased at 3.4% as these ones delivered by internal donors are equal to 8.5% while the ones from outside donors reach 34%.
Most of the loans are calculated in the so-called treasury bonds that Rwandan government indebted as to boost it financial sector and market.
Leonard Rugwabiza revealed that these loans have not reached a level of being a threat to the national economy.
He revealed that the acquisition of this loans are due t the fact that Rwanda is hugely investing in big projects that require significant financial investments.
He explained that this core of the problem is that the former aids have changed to long term loans, and this is one of the reasons why Rwanda appears among the most indebted East African nations.
Rugwabiza adds that Rwanda takes these loans to invest in projects that are beneficial to Rwandan.
Japanese government has issued to Rwanda a loan equivalent to 162$ to invest into building a road connecting Kayonza to Rusumo and it will be paid with 40 years.