Rwandan Investors Raise $450m in Private Equity, Reports KT Press

KIGALI, Rwanda, Jan. 6, 2015 /PRNewswire/ -- Local private investors have collected more than Rwf315b ($450m) of capital since 2006, says a report released by Rwanda's Private Sector Federation (PSF), an umbrella grouping of private businesses.

Mungwarareba Donatien, in-charge of Entrepreneurship Promotion at PSF told KT Press that there are about 90 investment groups of which 53 have capital above Rwf200m ($285,714) each.

Some successful ventures include the modern Kigali city market complex, Nyagatare Maize investment group in East Rwanda and the East African Granite Industries among others.

In 2006, Rwanda's President Paul Kagame counseled members of the private sector to pool scattered resources together and venture into sizeable investments which would benefit the economy.

President Kagame believed more jobs would be created, and investors would benefit from the economies of scale which would spur development.

Rwanda's Private Sector Federation (PSF) embraced the President's idea, later establishing a secretariat to implement the initiative.

That same year, the Rwanda Investment Group (RIG) was started, more like a pilot. It was an instant success. Over 20 private business people around Kigali subscribed as its shareholders.

Setting the pace for other investment groups that would later spring up, RIG invested its resources in Renewable Energy, Agri-business, Cement production, and largely took advantage of the privatization program to own stake in a number of privatized companies.

Today there are more than 88 collective investment groups across the country; formed as Associations, Private Investment Groups or Corporations or private joint ventures, Private-Public Partnerships (PPP) and Cooperatives.

Trade Minister Francois Kanaimba told KT Press, "The government has commissioned a survey (ongoing) to determine the status of investment groups in the country."

He said the survey will help note various challenges faced by these groups and other important information which will then be used to strengthen their functionality.

Experts are still researching to update on the status of collective investments across the country.

The private sector grouping says business projects by investment groups which are self-initiated by members are successful; majority of which are in the commercial real estate development sector and comparatively fewer in the agricultural sector.

According to the 2013 PSF report, investors find it riskier to invest in Agriculture, and banks are hesitant to finance such collective investments.

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