In 2019, plans to establish Kigali International Financial Centre picked up pace and a formal launch had been scheduled to take place on the sidelines of the Commonwealth Heads of State and Government Meeting.
Kigali International Financial Centre (KIFC), an initiative by the Government that seeks to position Rwanda as a business and financial hub in Africa as well as reforming the financial services.
While the pandemic might have led to the postponing of the launch event, experts say that attracting and mobilizing investment into the country is much more pressing at the moment.
This is due to anticipated capital flight due to liquidity challenges in source markets as potential global investors’ markets are also experiencing economic challenges.
In 2020, the world is expected to go through one of the worst recessions known to economists with global growth projected at –4.9 per cent in 2020, according to the International Monetary Fund.
This will be the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870.
In advanced economies where a majority of global investors are based, economic activity is anticipated to shrink 7 per cent in 2020 with finance among sectors to be disrupted.
However, Rwanda Finance Limited, the government agency overseeing the establishment of Kigali International Financial Centre is not halting plans despite the pandemic and tough economic times.
Rather, the agency has adjusted aspects of its delivery approach at the same time aware that there is still available capital despite limited.
Rwanda Finance Limited (RFL) Chief Executive Nick Barigye told The New Times that despite the pandemic and its effects on activities, the agency has adjusted its approach to leverage technology in conducting consultations and engaging stakeholders at the same time looking out for the safety of its staff.
In recent weeks, Kigali International Financial Centre has entered partnership agreements with global institutions.
In June this year, KIFC gained a new partner following the virtual signing of a partnership agreement with CDC Group, the UK’s development finance institution and impact investor.
In May 2020 Rwanda Finance Limited (RFL) signed an agreement (virtually) with Casablanca Finance City (CFC) to promote investment and cooperation between Morocco and Rwanda in financial services.
In regards to expected capital and liquidity challenges across the globe, Barigye said that even in crisis and economic challenges there are a section of investors looking to invest despite the economic outlook.
"In as much as there is expected capital flight out of Africa, we believe that there are prudent investors who believe that out of crisis lies opportunities. We are continuing to undertake reforms, we are continuing to do our marketing and business development and we are seeing a number of investors we are engaging with continue to pursue opportunities. There are prudent investors who are pursuing opportunities in Africa and those are the ones who we are reaching out to and showing the rationale of investing in Rwanda,” he said.
The promotion in May saw the cross-listing of South African firm, RH Bophelo Limited on the Rwanda Stock Exchange (RSE) despite the economic times.
This was partly attributed to the efforts to promote KIFC following pitching to global firms to consider cross-listing on the RSE.
Barigye added that Rwanda’s response to the pandemic as well as reputation of leadership has also played part in giving confidence to investors at a time when they seek certainty.
The stability and certainty, he said, will increase chances of Rwanda featuring as the preferred destination for regional and global investments.
"The leadership has shown a steady hand, calmed waters in times of crisis, investors in times of crisis look for certainty. We have a leadership that has looked to provide certainty not only for Rwanda but across the continent. That is what we are also leveraging on. Investors will look to markets that are able to provide certainty and stability,” he said.
The recent Africa Economic Outlook by the African Development Bank noted that Rwanda's economy will remain among the most resilient in Africa despite the Covid-19 pandemic owing to policy measures and interventions made by the government.