African governments must create an enabling environment for investors by removing barriers and allowing for the free movement of capital, according to John Rwangombwa, governor of the National Bank of Rwanda.
Rwangombwa was speaking at the recent World Economic Forum (WEF) Africa event held in Cape Town when he said the main function of government was to make it as easy as possible for investors to put money into African countries.
“What we’ve been doing as the government of Rwanda is to implement reforms that remove all barriers to private investment,” he said.
“We’ve seen reforms in doing business, creating an enabling environment, for example as a company that used to take almost two weeks to register you can now do it online. And that makes it simple and free and makes it easier for anyone that wants to do business in Rwanda.”
He said creating a one-stop shop for all regulatory requirements had helped create an environment that attracted investors, but that regulations must also allow them to withdraw their money when they wish.
A recent report from Morningstar flagged capital controls as a reason for South Africa scoring a ‘C’ for investor experience, but Rwangombwa said Rwanda would not make the same mistake, hence its own rise up ease of doing business rankings.
“Investors need to be confident that when they bring in their money and make profit they can easily repatriate their profit, and when you want to exit you can. There are no capital controls. Free movement of capital in and out of economies is key,” he said.
“I’m saying this applying to Rwanda but this should apply to all of Africa. If you want to attract capital from the rest of the world or from across borders in Africa.”