University students from different Universities across the country have been tipped to not only save but also invest in stocks by officials from Rwanda Stock Exchange and Capital Market Authority.
During the official launch of the annual Capital Market University Challenge 2019, officials said that buying shares is the best way to save and gradually create wealth.
Prof. Edwin Odhuno, the Vice Chancellor of Mount Kenya University, told the students that buying shares is the best way to save as it allows one partial ownership of the company where one holds shares.
“When you buy shares it means that you own a given percentage of that company and also you will always be certain that at every end of the year you will get dividends,” he said.
At the launch, students were advised that contrary to popular misperception, buying shares is not a sole preserve of the working class and the rich.
“Through the Rwanda Stock Exchange anyone can invest in firms of their choice by acquiring shares of listed companies,” Robert Twagira, the Head of Operations at Rwanda Stock Exchange noted.
The savings rate in Rwanda is still low compared to the current investment rate, according to a recent assessment by the World Bank. Experts say that the investment rate in the country is at about 26 per cent in contrast to the saving rate which is at just 10 per cent.
Officials say that for the country to realise its vision of becoming an upper-middle-income country by 2035, the economy has to grow at 12 per cent raising concerns of much needed investment financed by local savings.
The latest integrated household living conditions survey showed that the average age of the Rwandan population is 19 years, meaning that to make saving sustainable there ought to be multiple platforms that encourage savings and wealth rentention.
Eric Bundugu, the Acting Executive Director of CMA, agreed with the recommendation.
“We believe that the most effective way for youth to secure their future is to venture into smart saving and investment opportunities in order to guarantee their lives’ sustainability and the competition was initiated to facilitate the attainment of such objective,” he said.
Budungu also reminded the students to develop a savings culture and always to spend after saving. He also highlighted the usefulness of investing in stocks.
“You have to also act in accordance to what Warren Buffet says, ‘don’t save after spending but spend after spending’. Also when you have invested in shares you can use that as collateral when you apply for bank loan,” he said.
The university challenge is expected to attract more than 480 students across the country, who will engage in quizzes and essay writing competitions designed to encourage students to embrace the idea of investing in capital market products.