Rwanda, UK financial firms commit to closer cooperation
Ties between Rwanda and the United Kingdom grew a notch higher as the two countries’ financial institutions signed a partnership agreement with an aim of stimulating economic development.
Kigali International Financial Centre (KIFC) on Tuesday June 16, gained a new partner following the signing of a partnership agreement with CDC Group, the UK’s development finance institution and impact investor.
The agreement signed virtually among other things provides for KIFC to gain expertise that will help shape a strong legal and regulatory framework from CDC Group’s expertise to support the ongoing development of the new international financial centre.
The deal is aimed at facilitating the actualization of the Kigali International Financial Centre, a project working to reform the financial services sector overseen by the Rwanda Finance Limited.
The reforms are under three key pillars; laws and regulations within the financial service sector, the tax policy as relates to the financial sector, and skills and capacity development as relates to the financial service sector.
Nick Barigye, Rwanda Finance Limited chief executive, gestures during the meeting on Tuesday, June 16. Photo: Olivier Mugwiza.
Rwanda Finance Limited Chief Executive Nick Barigye said that the partnership is an important milestone towards improved capacities in aspects such as legal, regulatory and institutional framework.
Barigye said that the new partnership comes in the heels of long standing partnership and cooperation with the UK Government across multiple sectors and areas.
“We have strong partnership with the government UK in different development activities over the years. For us as we build an International Financial Centre, it was incumbent on us to ask who within the UK government would be the appropriate partner, given the commitment to working closely we have seen in the past,” Barigye said of the buildup to the agreement.
For KIFC which is still nascent, the agreement will allow them to tap into the CDC Group’s years of experience, important for us given their experience investing in Africa.
“Considering we are looking for institutional investors such as them, we felt it’s important to work with them to borrow from their long experience, their expertise as we continue to undertake the legal and regulatory reforms.
For instance, we have been sharing with them our drat laws for them to provide input and get feedback from them on their perception of the laws as potential users,” Barigye said.
Among the top areas that KIFC is keen to tap from the partnership include expertise in drafting of relevant laws, support in compliance with international standards as well as matching investor expectations.
Kigali will also benefit by tapping into CDC Group’s network of partners such as international investors, international financial intuitions, ecosystem players such as reputable law firms, reputable development banks, and reputable VC firms among others.
It’s not only Rwanda that will benefit from the development, for CDC Group, the pact makes a business case for them as they seek alternative markets for their investments.
“It makes a business case for them, as investors in Africa, they have jurisdictions they work in but at the same time they are looking for alternatives. They see this as an alternative jurisdiction of structuring investments they make in Africa,” the Chief Executive said.
Nick O’Donohoe, Chief Executive of CDC Group, said that they are confident of Kigali’s ambitions as a financial hub hence partnering with KIFC.
“The African continent needs a vibrant and stable financial services industry to foster inward investment and nurture a professional and technical skills base to support wider economic development. It is still very early days in Kigali’s development as a financial hub, but we are confident it will deliver on its early potential. And if it does, then I see no reason why we wouldn’t look to use it ourselves,” he said.
In May 2020 Rwanda Finance Limited (RFL) signed an agreement with Casablanca Finance City (CFC) to promote investment and cooperation between Morocco and Rwanda in financial services.
The partnership which was also signed virtually seeks to promote best practices, through which CFC will support the development of the Financial International Center of Kigali (KIFC).
Kigali International Financial Centre promotion efforts recently saw the cross-listing of South African firm, RH Bophelo Limited on the Rwanda Stock Exchange (RSE).
This was partly a result of efforts to promote KIFC following pitching to global firms to consider cross-listing on the RSE.