An interview published in the foreign press indicates that the country will issue treasury bonds quarterly to help expand its nascent over-the-counter (OTC) bourse in order to fund infrastructure development and lessen dependency on donor funding.

A good number of Rwandans might not be aware what a bond is. It is a debt investment in which an investor loans a certain amount of money, for a certain amount of time, with a certain interest rate, to a company.

However the questions every one would want to ask is: What are the market conditions? It should be noted that since its inception in January 2008, the bond market has raised a modest $30.6 million and registered only 58 secondary trades worth a total of $1.13 million.

The problem here is that even daily trading volumes are thin, and frequently zero.

It should also be noted that the country sold only Rwf1.5 billion francs at the auction last month although the National Bank of Rwanda had offered Rwf 2.5 billion.

That means that there is still a low demand. The regulators of the market, the Capital Markets Advisory Council says that the level of awareness in institutions is also challenging.
It is against this background that the issuance of treasury bonds was designed, basically to develop the debt market in the country. Once successful this program will see the funding of Rwanda’s development to be more reliant on private equity from the region. The program needs to be supported by investors, financial institutions and economic players. 

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