Rwanda says it has placed her first bond, under its medium term notes, in the Samurai Market of Japan, as the country seeks to raise funds from the latter, officials have said.
The samurai market is the largest debt capital market in Japan, and also considered as the most demanding in terms of requirements and compliance issues.
The development was announced Wednesday, November 23, after Prime Minister Edouard Ngirente hosted outgoing Ambassador of Japan to Rwanda, Masahiro Imai.
The meeting, also attended by various government officials, attracted discussions around achievements from “long bilateral relations” and ongoing areas of cooperation between Rwanda and Japan.
Weighing in on the discussions, Minister of State in Charge of East African Community (EAC), Manasseh Nshuti, confirmed the bond issuance, citing that negotiations are ongoing, and talks could be complete by next year.
Minister Nshuti did not give details concerning the targeted value, maturity period and interest rates, citing that concerned parties are negotiating the best reasonable outcome.
The funds, he said, would be invested in key sectors identified by the government.
This is not the first time Rwanda is raising money from the International debt market, but Nshuti argues that it is the most attractive regarding the “very low interest rates.”
In August last year, Rwanda raised $620 million in its second-ever Eurobond, with an interest rate of 5.5 percent and a 10-year maturity.
“The yen bond remains with an ulta-low interest rate. The country’s assumed interest rate currently stands at 1.3 percent for debt servicing but can go even lower than that in some cases,” Nshuti asserted.
The development, experts say, comes at a time when bond markets have seen a dramatic change in 2022. After bond yields retreated earlier, they reversed course and started rising again in August.
“The successful bid can also be seen as a sign that Japanese investors’ confidence in our (Rwanda) fiscal stability and economic fundamentals is fast-increasing,” Nshuti added, “That is part of what we have been discussing and the envoy committed to helping us realize this development.”
Meanwhile, Rwanda and Japan have for the past 60 years enjoyed fruitful bilateral relations, particularly in sectors of climate change mitigation, infrastructure development and public-private investments.
We talked about our past 60 years of collaboration between Rwanda and Japan, especially through JICA, including in the sector of Agriculture, Education, ICT and Innovation, Rwanda Space Agency (RSA), among others.
“But we also talked about additional collaboration which we need to join forces in, which is economic development collaboration in health care and hi-tech areas,” Ambassador Imai said.
When asked about his time in office, he pointed out, “It has been a very difficult time owing to the pandemic, but for such a person like myself who used to work in the Private Sector Federation (PSF), for over 40 years in Japan, it has been an honor and irreplaceable experience to work for the better relations between both countries.”
“I think I may have identified areas where we need to do more,” Imai reiterated.