Rwanda stands to gain from its recent ranking as the fifth best destination for investment globally. The ranking, according to the profitability index by Foreign Policy Magazine indicates that Rwanda is likely to pull in more investors into the country. The increased revenues will then reduce fiscal deficit and overreliance on donors, which will in the long run support balance of payment, translating to a less volatile franc. The magazine ranked the country on the basis of asset growth, preservation of value and ease of capital repatriation. The report indicates that increased government spending on infrastructure and development related projects from bond issuance will steer rapid growth in the country over the coming year, which will support major companies. “In this case, we are likely to see major growth in industrial and the services sectors,” say researchers from StratLink, an international research and risk management company. “The public debt to GDP ratio may fall as inflows from bonds will make the country less dependent on aid partners.” The researchers said that low public spending allows the country to diversify its economy compared with aid with strings attached or conditioned loans. This will help to ease currency risk in the long run. At a yield of 6.875 per cent, above the Repo rate, the Eurobond is likely to keep investors interested for a long while. The investors oversubscribed to the Eurobond on its debut, in line with expectations, the report said.
Posted on: Mon, 10 Jun 2013 08:22:21 +0000
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