The private sector in Rwanda

But such goals are ambitious. Rwanda has nine commercial banks operating in the country but none are global brands, while the stock market trades just five listed firms and a few bonds, and traders use a whiteboard for trading activities. The combined stock market value is about $2.1bn, or just below $1bn if counting only the two Rwandan firms.

The Central Bank Governor says bond listings will be issued quarterly this year to help develop the capital markets and should help attract foreign capital. The Rwanda Stock Exchange (RSE), where trading began in 2011, is part of a wider plan taking shape that Rwanda hopes could include attracting fund management firms and creating a regional centre for technology.

The government recently announced the privatisation of the Development Bank of Rwanda, with investment company Atlas Mara, backed by former Barclays boss Bob Diamond, announcing an intention to buy a controlling 75% stake in the bank. This is part of Rwanda’s broader privatisation programme, and Atlas Mara’s plans to build a regional financial services firm. A final deal is expected to be signed in the coming months.

“The government of Rwanda is committed to privatisation in a sense that attracts foreign direct investments, gives investors good business opportunities and also boosts economic growth,” Finance Minister Gatete told a news conference at the signing of the memorandum of understanding with Atlas Mara.

Rwanda has sold stakes it held in other commercial banks, including 45% of Bank of Kigali, via a stock market flotation in 2011. The RSE has said it is preparing for another new listing in 2014. In a further effort to expand the capital market, a new market segment for small and medium-sized firms is likely to launch this year, with less onerous listing requirements.

Luring in the big hitters
Rwanda’s broader intentions include attracting fund managers and other firms. Visa, the global payments technology firm, chose Rwanda to trial a new mobile money system, but the country is still struggling to attract other big-hitter investors.

Attracting big global banks to Rwanda would also help expand the market. Currently Rwanda can only boast regional banks like Ecobank and Access. Global players such as Barclays and Standard Chartered, which are already in the region, are thought to be in the government’s sights. Rwangombwa says that international banks would be approached as part of broader plans to build a financial centre in Rwanda, which could mimic what is happening in Mauritius, which has a growing offshore industry. Rwanda is unlikely to become a tax haven but lower tax rates for investors in energy, transport and logistics, as well as to fund managers and export-oriented projects, under a new investment code are likely and would attract investment, the government hopes.

After the setbacks of the 2012 aid cuts, government spending is now back to normal, and the Central Bank says growth will revive in 2014 to at least 6%. Governor Rwangombwa has forecast a 15.8% rise in bank credit to private business would also help get the economy back on track, compared to an increase of 12.9% in 2013.