In 2021, Rwanda generated over $1.2B in investment with the lion’s share of it driven by an economic recovery initiative dubbed ‘Manufacture and Build to Recover’. 2022 could be a better year in the investment scene not only for established enterprises who can afford capital of millions of dollars but for start-ups as well. This is due to the existence of several initiatives for increased funding, a new generation of eager and talented innovators, increased access to mentorship and technology. Among the issues that have been said to hold back start-ups include sustainability of access to capital and prohibitive production costs, especially as the country seeks to position herself as a regional innovation hub. Increasingly the ecosystem has been somewhat improving with adjustments such as the New investment law which was gazetted on February 8 2021 with incentives for angel investors and partners. There has also been the debut of players such as Norrsken East Africa, Hanga Pitchfest, organised by the Ministry of ICT and Rwanda Development Board (RDB) among others is also likely to be a relief to the ecosystem. Going forward, an opportunity for growth lies in mobilizing local capital to make the most of the emerging start-up scene. As African start-ups across the continent are becoming increasingly attractive to venture capitalists and angel investors, Rwandans with disposable income should consider making investments in the start-up scene. Investment in African firms across different sectors is estimated to have doubled in 2021 to almost $5B to over 500 companies as global investors seek to tap into the growing opportunities on the continent. In Rwanda, Zipline raised $250M for operation expansion while Ampersand mobilized about $13M in investment from two rounds of investment to facilitate their expansion beyond Rwanda. However, a majority of these investments were sourced from outside the continent from the United States and United Kingdom as well as Asia. With that, despite the growth and profitability of the firms, little of the value is retained locally or on the continent. Going forward, individuals and corporations should consider participating in the start-up scene as investors to make the most of the growth. That will see more value retained locally.
