Building Rwanda’s capital markets

Rwanda's capital markets are on a mission to establish alternative investment vehicles that will allure global investors, as the country gears up to introduce a local currency-based financing system. In a recent interview with CNBC Africa, Zano Mataruka, Resident Representative for Rwanda & Uganda at the International Finance Corporation, shed light on the country's economic resilience, impressive growth rate, and the imperative need to enhance the development of capital markets in Rwanda and across East Africa. Mataruka emphasized the significance of deepening financial markets to nurture a savings culture and facilitate investment flows to propel national development. The Capital Market Development Project initiated by IFC in collaboration with the Rwandan government aims to catalyze local currency financing for crucial sectors like housing, hospitality, and SMEs. The project's objectives include boosting the bond market, promoting non-government bonds, expanding the investor base through targeted training, and collaborating with regulatory bodies to foster financial deepening. Despite Rwanda's relatively nascent capital markets, efforts are underway to bolster capacity and introduce innovative products, paving the way for alternative investment vehicles. Mataruka highlighted the untapped potential of Rwanda's capital markets, underscoring the role of increased savings in driving investment and corporate growth. He cited the need for replicating South Africa's success in capital market expansion through inclusive product development and leveraging technologies like FinTech to bridge formal and informal financial sectors. By harnessing the commitment of government and key stakeholders, Rwanda and other East African nations aim to emulate South Africa's capital market growth trajectory. While the timeline for the second bond issuance in Rwanda remains tentative, Mataruka affirmed the gradual progress towards diversifying investment opportunities and fostering a robust capital market ecosystem.