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30/05/24
Kigali International Financial Centre: Conducive For Capital Deployment In Africa
Amidst the evolving skyline of Kigali, a beacon of economic innovation emerges: the Kigali International Financial Centre (KIFC). KIFC is redefining Rwanda’s economic ambitions and creating a distinctive role within Africa's financial ecosystem.
KIFC’s mission is to position Rwanda as a thriving financial hub by developing an internationally competitive regulatory and operating environment; enhancing Rwanda’s ability to attract talent and upskill its workforce; creating international awareness and recognition; and attracting high-value investors and financial sector players. KIFC’s mission is derived from the country’s Vision 2050, which serves as a blueprint guiding Rwanda’s development toward becoming a high-income nation, buttressed by a diverse, modern, and competitive economy.
Rwanda’s financial centre, which became operational in 2020, is building an efficient financial services ecosystem by leveraging strategic partnerships and collaborating with other international financial centres such as Luxembourg, Singapore, and Jersey. KIFC benefits from its strategic location in the heart of Africa providing direct access to adjacent regional markets and major economic blocs representing a combined 838 million consumers. Rwanda’s time zone also means it can serve markets both to the west and east in a single day. The country is safe, secure, and clean, it is easy to do business, and there is low tolerance for corruption.
The Rwandan government has put in place various incentives to facilitate commercial exchanges between countries and attract international investors. These include establishing an attractive visa-friendly regime where visitors are granted a visa upon arrival, which eases access and connectivity for tourists and business travellers alike. There are no controls on foreign exchange, foreign ownership, as well as profit repatriation. This speaks to the continuous efforts the country is making to create a conducive pro-business environment.
KIFC distinguishes itself by offering one of the most attractive regulatory frameworks in Africa, particularly in the areas of compliance and transparency, both of which are aligned with international benchmarks set forth by the OECD and FATF.
With a focus on becoming a central pivot for various investment vehicles, KIFC welcomes those looking to invest not only in Rwanda, but across Africa. For the past four years, KIFC has successfully attracted an increasing number of investment funds, fund managers, fund administrators, family offices and trust managers, by implementing legal structures based on international best practices, such as partnership vehicles, legal and regulatory improvements for Collective Investment Schemes (CIS), coupled with attractive tax incentives. This includes a reduced corporate income tax, an exemption on withholding tax, and no capital gains tax. Similarly, the repatriation of funds is not subject to any restriction within the jurisdiction. These conditions are contingent upon meeting minimum substance requirements in terms of the size of the fund, annual expenditure in Rwanda, and percentage of local staff employed to manage the investment fund.
Rwanda is actively expanding its network of Double Taxation Avoidance Agreements (DTAAs) to ensure the tax efficiency of structures under KIFC. In 2023 alone, Rwanda announced the signing of three new DTAAs with key countries, France, the Republic of Korea, and the Czech Republic, bringing the current total to 17. These efforts aim to facilitate investment flows and enhance bilateral cooperation between Rwanda and our strategic target markets.
The Virunga Africa Fund 1 stands out as a testimony to the regulatory innovation fostered by KIFC, leveraging the new Partnership Law, and providing a flexible, common-law framework that makes Rwanda an ideal environment for private equity and venture capital activities. This USD 250 million fund focuses on development sectors aligned with the African Union's Agenda 2063, and the United Nations’ Sustainable Development Goals, emphasising inclusive growth.
The Fund for Export Development in Africa (FEDA) has also chosen Kigali as their headquarters due to Rwanda's ease of operations. FEDA, the impactful investment arm of the African Export-Import Bank, recently announced a first close of USD 670 million across its four fund strategies, reinforcing the value of basing operations in Rwanda. FEDA has also received an additional mandate to establish and operationalise the AfCFTA Adjustment Fund through a General Partnership, with operations of the Fund domiciled in Rwanda. The primary objective of the fund is to provide support to countries and private entities as they navigate the transition to the new trading regime under the African Continental Free Trade Area (AfCFTA).
In addition to attracting private equity, KIFC has successfully drawn interest from financial service providers, like DTOS, one of the leading Mauritian financial services firms, which secured a licence to operate in Rwanda as a trust and corporate service provider and CIS Fund Administrator.
The vision of KIFC, placing women's empowerment at its core, aligns with Rwanda's position as one of Africa's financial ecosystems with the highest number of women-led banks and financial institutions, and as a country widely acclaimed and celebrated as a leader in gender equality. KIFC boasts several investment entities led by women or focused on gender-lens investing, including Africa Business Angels Network (ABAN) with Secretary General Ms. Fadilah Tchoumba, Chancen International with CEO Batya Blankers, and Fit Capital led by Chief Loretta Aniagolu, among others. KIFC recently hosted the Women In Africa Network Lunch at Super Return Africa 2023 in Cape Town, the largest private equity and venture capital conference on the continent. This exclusive event was attended by over 40 women leaders in the global finance industry.
KIFC has identified sustainable finance and FinTech as key niche areas necessary to position Rwanda as a leading financial services hub. In 2022, in collaboration with UNDP, KIFC launched its Sustainable Finance Roadmap on the global arena during COP27 — the signature international climate summit. The roadmap aims to provide a complete range of financial instruments for investors and lenders through KIFC, to expand sustainable finance and ensure sustainability.
KIFC aims to leverage innovative financial instruments to attract capital for green investments and mobilise a pool of resources toward ESG projects. One of these instruments is Rwanda’s National Green Taxonomy recently showcased at COP28. The taxonomy is a policy instrument that aims to define sustainability criteria, foster common understanding, build trust to ensure alignment with international best practices and global sustainability goals, and establish a guide to attract funds from climate-conscious investors. Once enacted, Rwanda will be the second country in Africa (after South Africa) to have developed a National Green Taxonomy.
Rwanda’s forward-thinking policies and reform agenda have created a business landscape ripe for innovation and technological advancements. In 2023, through a strategic collaboration with the Monetary Authority of Singapore, KIFC hosted the inaugural Inclusive FinTech Forum to introduce Rwanda as the new fast-growing hub for FinTech opportunities on the continent. We convened close to 2,000 leaders, policymakers, regulators, entrepreneurs, founders, investors, financial institutions, and FinTechs, to spark dialogue around policies and partnerships that can harness technology to accelerate greater financial inclusion, and build bridges between policy, regulation, investment, and tech.
With Rwanda steadily gaining significance as a reputable hub for financial services, the Global Financial Centre Index (GFCI), a renowned ranking that assesses the competitiveness and attractiveness of financial centres worldwide, ranked KIFC third best IFC in Africa and second in Sub-Saharan Africa in the 34th edition of its publication. Kigali's notable rise in the GFCI not only reflects its commitment to contributing to the competitiveness of Rwanda’s financial sector, but also signals that its position is being recognised by global indices relevant to the financial sector.
In a very short time, the centre has seen a period of strategic growth, the building of pivotal alliances, and the creation of innovative financial solutions. In the coming years, KIFC's strategic initiatives and the measurable impact on Rwanda's economy are expected to be substantial. KIFC is becoming the epitome of the transformative power of well-governed financial services. As it continues to expand its reach, refine its offerings, and bolster its regulatory framework, KIFC is solidifying its standing as a prominent financial hub not only in Africa but also on the global stage. Like Rwanda itself, KIFC's trajectory remains one of growing opportunity and optimism — with an invitation to the world to participate in Africa's financial renaissance.
Jean-Marie Kananura
Jean-Marie KANANURA is the Chief Investment Officer of Rwanda Finance Limited, the company promoting and developing Rwanda as a leading financial destination for international investment and cross-border transactions in Africa.
Jean-Marie joined Rwanda Finance as a Business Development Manager in charge of the Central and West African region.
Jean-Marie is a Finance professional with more than 15 years of experience in the Banking sector.
Prior to joining Rwanda Finance, Jean-Marie worked with Euroclear Bank Brussels, where he worked in Asset Servicing and Securities Post-Trading Operations focusing on Project Management, Business Process Management, and Continuous Improvement.
Jean-Marie holds an Executive Master’s Degree in Finance from Solvay Brussels School and a Master’s Degree in Business Administration from ICHEC Brussels Management School.
