AS THE government embarks on selling the Rwf12.5bn Treasury Bond to mobilise funds for infrastructure development, I need to be educated on one or two issues.
The first one is about the timing of the bond issuance. I am told that part of the reason the rate at which the economy grows slowed down last year is because of limited credit to the private sector. Meaning banks lent less to the business community.
Now, the first question is: Will this not complicate the matter even more as banks choose to lend the government instead of the private sector?
Secondly, won’t this domestic borrowing send the national debt to unsustainable levels, especially as the rate of GDP growth slowed down last year? What I mean here is that when the amount of debt approaches anywhere near to be equal to national GDP, such debt level is considered dangerous for future economic growth.
So, are we safe from unsustainable levels in the wake of slower rate of economic growth?
Reaction to the article, “Government to receive bids for treasury bonds today” (The New Times, February 24)