Rwanda capital markets was established two years ago under the prime minister’s decree in order to encourage Rwandans to save and invest in long term ventures.

The Sunday Times had a one on one with Robert Mathu, the Executive Director of the Rwanda Capital Markets Advisory Council (CMAC). Below are excerpts:

Q: Rwanda Capital Markets has been up and running for two years now, what progress have you made so far?

A: We have been working hard to put in place a foundation for developing capital markets in Rwanda. That is the soft infrastructure which involves rules and regulations for operating the Rwanda Over The Counter (OTC), which is the most important phase. We also have a market where issuers can raise capital and investors can buy and sell financial assets for example shares and bonds. 

Q: What have you as CMAC achieved so far?

A: A number of things like admission and training of members of the OTC market, listing of four bonds out of which three were by the National Bank of Rwanda (BNR) and one corporate bond by the Kigali Commercial Bank (BCR). We have also harmonized our market with other markets and stock exchanges in the region and enabled investment projects to access external funds.  

Q: Why have we not seen any companies issuing shares since the inception of Rwanda capital markets?

A: The process of going public by any company is a long one, and the procedures too are a bit long. Also, only profitable companies can list. But we are optimistic that soon a number of both local and regional companies are going to list.

Q:Biggest challenge(s)?

A: The biggest challenge has been the advent of the global financial crisis which substantially affected both the demand and supply side of the market. Corporate companies that had wanted to come to the market postponed while others changed their strategy. And the growth of this sector is determined by how much money is raised through the capital markets.

Q: Talking about the harmonization of the markets, what are the benefits and how is it progressing?

A: The process has already started and CMAC has signed a memorandum of understanding with the East African Securities Regulators Authorities (EASRA) we have also signed a memorandum of understanding with the East African Stock Exchanges Association (EASEA) and the aim for EASRA is to harmonize disclosure, listing and licensing the regulations across the region. EASEA harmonizes cross border listing.

Q: What is the future for this sector in Rwanda?

A: The future for CMAC is bright because the economic growth for Rwanda and the region will achieve its potential. When the capital markets eventually take up their effective role of accessing businesses and public projects, we would like to see that the capital markets is the first choice for people and companies to raise capital since it is the only long term investment that will increase the growth.

Ends