Rwanda’s $2 Billion Airport: A Debt Trap Disguised as Progress

The International Monetary Fund (IMF) has warned Rwanda about its $2 billion Bugesera International Airport project, highlighting the significant risks it poses to the country's fiscal stability. 

Despite ambitions to transform Rwanda into a regional aviation hub, the IMF cautions that the project's costs could escalate public debt to unsustainable levels.​

The Bugesera International Airport, located south of Kigali, is designed to replace the existing Kigali International Airport. Upon completion, it aims to accommodate 8 million passengers annually, with future expansion plans to handle 14 million. 

Qatar Airways holds a 60% stake in the airport and a 49% stake in Rwanda’s national carrier, RwandAir.​

However, the IMF notes that Rwanda's public debt has surged from 40% of GDP in 2019 to 60% in 2022, primarily due to borrowing for infrastructure projects and post-pandemic recovery efforts.

The Fund warns that the airport's significant cost could further elevate debt levels, potentially exposing Rwanda to economic vulnerabilities amid global challenges such as inflation and tightening financial conditions. ​

Moreover, credit rating agencies Moody’s and Fitch have revised Rwanda's credit outlook from stable to negative, citing the risks posed by the ongoing conflict in the eastern Congo. 

Fitch expects the debt-to-GDP ratio to hit 80% by the end of 2025, with experts suggesting it could be even higher given recent sanctions and aid cuts the country has suffered in the wake of the M23 rebellion in neighboring Congo. 

The IMF recommends that Rwanda assess the project's long-term financial implications and consider alternative funding options.

 It emphasizes the need for credible fiscal consolidation, strong domestic revenue mobilization, and careful reprioritization of investment projects to mitigate debt vulnerabilities.