Rwanda’s external debt distress is not yet high and Rwanda is taking every possible action to constrain the high risk of external debt distress.
Rwanda’s external debts have had considerable increase since 2014 as it increased from $ 1.8 billion in 2014 to $ 2.9 billion in 2016. The IMF Debt Sustainability Analysis (DSA)show no increase in figures have been recorded in 2017 according to the IMF Debt Sustainability Analysis (DSA) July 2017.
However, Minister GateteClaver, for MINECOFIN, has told the press conference that Rwanda is categorized as low debt distress country where its external debt against GDP currently stands at 36.6%. Gatete said this amid fears of possibly increased external debt that could affect economy growth.
IMF Debt Sustainability Analysis shows a total debt including guarantees stood at $ 1.8 billion in 2014 ,$ 2.2 billion in 2015 and 2.9 in 2016.
The same report shows that the government is expected to take on around US$37 million in external debt over 2017–19 to carry out its projects.
The minister has said that country engages in taking external debts not oblivious of the risks external debt may bring about especially to the economy of the country.
From three categories notably low risk of external debt distress, moderate risk external debt distress and High risk external debt distress that the IMF Debt Sustainability Analysis classify countries Rwanda counts the average of 10 percent for internal and 36 percent for external debts.
Mega projects that have made Rwanda to take debts include RwandAir’s continued expansion that took US$171 million in loans for two new aircraft and leases for two other aircraft. There are other projectssuch as the Rwanda-Tanzania joint railway projects from Isaka-Kigali slated to officially kick off by October 2018, that will require the country a staggering investment that would no matter how prompt the country to opt taking debts.
