Kigali City Council (KCC) is to list the first ever municipal bond in the East African region despite the current inflation that has hit a 20 per cent record high.

City authorities assure the public that there would be no shocks resulting from the offer despite the high inflation rate in the country.

Financial experts however argue that if KCC is to list, it requires providing a product that would beat inflation and hopefully offer returns above it.

Kigali City is issuing a municipal bond in order to increase its investment capital for executing various obligations of financing its projects, especially the implementation of the Kigali Master Plan.

They opted to raise Frw5 billion through issuing the bond saying it is cheaper to finance infrastructures like roads, electricity, water and sewage systems contruction.

It was expected that the bond would be listed on the Rwanda Over The Counter (OTC) market by end September this year, but it has been delayed. Market intelligence sources say the delay is partly due to the current inflation.

Kigali City Vice Mayor in charge of Economic Affairs,   Dieudonné Rumaragishyika, however said in a phone interview with The New Times that the current inflation won’t halt their plans. She  said they are in touch with Dyer and Blair Securities Rwanda.

Dyer and Blair Securities Rwanda is the sponsoring broker for this issue. It is supposed to come up with the prospectus, business plan and also market the city’s bond.
"We are still in the process and we are in touch with Dyer and Blair,” he said. 

Pierre Celestin Rwabukumba, Operations Manager Capital Market Advisory Council (CMAC) is optimistic KCC will issue the bond, but they  will still look at the current market condition.

"They will look at the lending rate, interest rate on treasury bills and treasury bonds. It also depends on what the market is willing to pay,” he said.

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