Every year the World Bank assesses at least 190 economies across the globe with the aim of determining their performances and identifies loopholes and gives recommendations.
The same global Institution comes up with a list of particular reforms that economies can adapt to make doing business a lot easier and this would have an impact on the general global economy.
Rwanda is among the best performers both in Africa and at global level. For example in the latest rankings, Rwanda is at position 38th among the 190 economies assessed in the 2020 World Bank Ease of Doing Business Report.
However, this year Rwanda dropped about 9 places from its 29th global position in an earlier report of 2019 and the reason was a surprise addition of a new parameter ‘Protecting minority investors’.
Under this new indicator, the World Bank was looking at Minority shareholders’ rights in related-party transactions and in corporate governance. To pass this parameter, an economy under assessment required to have at least 10 companies listed on the Stock market and trading equities.
The Rwanda Stock Exchange market was found to have only 8 listed companies; 3 local companies and 5 others from the region.
Rwanda has one of the youngest (2011) stock markets in the world with the latest and sophisticated infrastructure. “Rules and regulations are up to international standards,” According to Celestin Rwabukumba, Chief Executive Officer of the Rwanda Stock Exchange.
He says the local Stock exchange market has products including; debt market instruments corporate bonds government bonds mainly which are currently the dominant products on the market. “We also have stocks/companies that are listed on the market.”
“The size of Rwandan stock market has capitalization of more than U$3.8Billion representing a 40% size of the country’s GDP and has 50000 active buyers,” Rwabukumba says.
According to Rwabukumba, this year alone, the share price index has increased by 5% expectations is high to have this move upwards. The transaction value is over U$1billion.
Louise Kanyonga, the Chief Strategy and Compliance officer at the Rwanda Development Board believes the country needs to adjust efforts in satisfying the World Bank’s latest parameter of vibrancy of stock market.
“We have an excellent ecosystem for the stock market to thrive. Government has put in place regulations and procedures required for a stock market to grow. Anyone who wants to enter the stock market and trade on the stock exchange has a smooth entry,” Kanyonga says.