Venture Capital and Private Equity Industry Performance Survey of South Africa covering the 2014 calendar year

Does Rwanda’s Development Lie in Its Stock Exchange?

When most people think of Rwanda, it’s not with the idea of an economic boom in mind. Surprisingly though, the country has made great strides in development in the last 20 years, and the future could be even brighter than outsiders could believe possible.

A main cause of economic reform is the establishment of the Rwandan Stock Exchange, and according to financial expert Marc Holtzman, the exchange could mean the uplifting of the entire area. “I believe in a very short time, we will see companies from across the region, coming to list because international investors are excited about the dynamism of the early success of the capital markets in the country which will be a driving force for the region,” states Holtzman emphatically.

The country’s government has worked tirelessly to turn the country’s economy around, and Holtzman says there’s a noticeable shift. “Because of the policies the President and his government have put in place,” claims Holtzman, “policies of transparency, creating a level playing field, policies of educating the workforce which is the biggest resource, Rwanda is going to become a hub for the region and the continent.”

Rwanda is a different landscape since 1994

New vision has reported the World Bank’s findings that Rwanda has managed to reduce poverty by a third since 1994, while at the same time decreasing the equality gap, as well as increasing per capita growth nearly five-fold.

This is highly impressive for a country that was in such turmoil only two decades ago. “Some people call it a development hat-trick,” says Yoichiro Ishihara, the senior World Bank economist situated in Rwanda. In reality, international investors have helped uplift the country in a big way, which is why the stock exchange is also set to be highly successful for the country’s economic recovery.

Foreign interest in the stock exchange

Holtzman warns against the rejection of international investments in the local stock exchange. “It is important for people to understand that to have international investors here is an essential component for the development of the stock market,” explains Holtzman.

He also further explains that not only is international capital welcome, but it is also needed in order for the stock exchange to take off and thrive. “In the first ten years in the life of a new dynamic developing equity market, it is still pretty much driven by outside international capital for the first decade,” states Holtzman. “There is not enough domestic equity capital to support any market in the initial stages.”

There is no need for the Rwandan people to fear the over involvement of foreign money though, as Holtzman states, “The foreign investments in the stock market is never a threat. At the end of the day, there is protection since government has an oversight role and regulatory power.”

The Rwandan government has worked hard to empower the people, as well as change international opinion of the Rwandan people. One thing that the President has pushed was the change to an English speaking country, which has helped welcome in the global market and investors. Holtzman himself has had firsthand experience of how this move has opened up Rwanda to foreign interest. “A major US-based company that I helped introduce to Rwanda–which is one of the biggest customer outsourcing companies in the world and will probably set up an organisation in the country–when they first looked at the country a few years back, they were hesitant since they would have a challenge having an English speaking workforce, but in a short time, an English speaking human resource is available,” explains Holtzman.

Rwanda is still mainly untapped

Holtzman has so much faith for the potential growth of Rwanda’s economy, mainly because he believes that even though the country has already moved forward in leaps and bounds, there is still so many sectors that can be developed much further in order to improve the economy even further.

“Information technology is going to be a key industry for this country,” claims Holtzman confidently. “Bio-technology and agricultural technology could also help to further develop the agriculture sector to take the scarce geography and multiply and leverage the potential.” On top of that Holtzman also believes that Rwanda’s tourism sector will bring the country levels of success that as yet have been unexplored.

“I would say the country so far only has tapped less than 10 percent into the tourism potential,” claims Holtzman. “When it comes to ecotourism, there is no place in the world that has the potential to attract more people interested in genuine ecotourism like Rwanda.”

The way forward for Rwanda

“The goal is to see a thriving domestic stock market,” explains Holtzman, “we want to see a lot of people earn dividends by investing in the stock markets, but that will take time.” Emerging stock markets take time to find their own footing, and for years need the influx of foreign capital. According to Holtzman, there’s no easy way to predict how long it will take a country’s stock exchange to take off, how many years it will need aid from outsiders, but he is confident that Rwanda’s market will find its feet. “I saw this in markets like Budapest and Asian markets,” says Holtzman, “it moves along at a slow pace at first then at some point it takes off.”

For further reading:

  1. Collins Mwai, Stock exchange is key to Rwanda’s economic transformation, says expert, New Times, 31 March 2014. Available at:
  2. Claire Provost, Rwanda: a puzzling tale of growth and political repression – get the data, The Guardian, 3 April 2014. Available at:
  3. Challenge to sustain Rwanda’s post-genocide economic boom, New Vision, 6 April 2014. Available at:
David Okwara

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