The process of privatising some state-owned enterprises is ongoing, in line with efforts to boost Rwanda’s stock market, President Paul Kagame has said.

While addressing local and international media, on January 9, he responded to a question of how the privatization of public enterprises could help expand the country’s stock market participation and growth in investments.

Kagame said that over the course of the last two years, there has been a process of examining and listing all government entities that could be privatized and get them off the government balance sheet.

"There is a team of people that has been following up on that. Agaciro Development Fund that has been taking care of public enterprises and other similar ones in the process of privatization and feeding this institution we are talking about,” he said.

The government changed its privatization law to attract competent national and international investors to participate in the management of State-owned Enterprises and transform the economy, with a focus on increasing Private Sector investments across priority areas in which the government has been the key or sole player over the past decades.

Transferring public enterprises and assets to private ownership would develop the domestic capital market and mobilise more investments in the economy.

By the end of 2024, Rwanda Stock Exchange (RSE) recorded a turnover which surpassed Rwf100 billion-mark for the first time, reaching Rwf129 billion, an increase of 126 per cent from the previous year.

Stock market turnover means the total value of shares traded on the RSE during the year under review.

The total market capitalisation – total market value of all listed companies' shares – by the end of 2024 in equities amounted to $2.7 billion and $1.5 billion in debt securities.

Funds raised amounted to Rwf271 billion from 10 listed companies and 41 outstanding bonds.

The total funds that circulated on the market amounted to Rwf400 billion.

The stock market was also marked by the issuance and listing of three products from private issuers in the last quarter of the year, which raised Rwf51 billion.

These include the first-ever green bond by Prime Energy worth Rwf9.5 billion with a seven-year maturity, a second listing of the first tranche of Rwf3 billion corporate bond by Mahwi Grain Millers paying 15 per cent per annum, and the second tranche of Sustainability-Linked Bond by the Development Bank of Rwanda (BRD) worth Rwf33.5 billion with a seven-year maturity.

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Despite the growth, Pierre-Célestin Rwabukumba, RSE Chief Executive Officer, recently acknowledged that activities on the secondary market are still low compared to advanced markets, despite the improvement made over the years.

"There is also a limited number of products and little diversification for investors. For instance, initially aiming for an average of 2 new listings per year, the exchange has realized closer to one per year, aligning with trends observed in other African stock exchanges,” he said.

Rwabukumba blamed the slow growth on limited financial literacy, low savings rates, and reluctance from companies to go public, adding that the government's privatisation policy through capital markets and probably a deliberate policy to compel public utility companies or companies of a certain size to go public could offer a promising avenue for expansion, while efforts to enhance local professional skills and financial services aim to support a growing pipeline of potential issuers.

Overall, 2024 saw growth in participation of both institutional and retail investors which increased by 37.5 per cent to 95,672 investors dominated by domestic investors by 95.7 per cent.