Tight requirements coupled with a fear of public scrutiny have locked out 420 local companies from being listed on stock exchanges in Africa.
The PwC 2016 Africa Capital Markets Watch estimates that Africa has 700 companies with annual revenues in excess of $500 million, but only 40 per cent are listed.
Rwanda Capital Markets Authority executive director Robert Mathu and chief executive Celestin Rwabukumba said lack of a strong corporate governance culture, as well as structures and management systems are partly to blame for companies not making it to the trading floor.
They told The EastAfrican that even though most companies want to grow their businesses, they lack expansion strategies.
In Rwanda, transport company Kigali Bus Services has been trying to get regulatory approval for the past three years to list on a special market, but has not yet succeeded.
"With increased scrutiny from regulators looking to enhance the appeal of local markets by protecting yield-seeking investors, achieving a successful offering is an increasingly complex and time-consuming process," the PwC report, which was released this month, states.
Listing by the companies could bolster activity on African bourses whose transactions declined 28 per cent in 2016 resulting in a 33 per cent fall in value compared with the same period in 2015.
"The entry by these  participants over the coming years will contribute to furthering depth and breadth of the African capital markets landscape," notes the report.
However, business owners have to cede control or open their books to scrutiny to take the company to the trading floors.
The PwC report shows that at least 90 per cent of African CEOs have expressed some degree of concern about the threat of currency fluctuations to their organisation's growth prospects in the coming year.
Despite the challenges, market analysts see increasing momentum on African bourses driven by privatisation plans in Nigeria, Morocco, Egypt and Tanzania.
Tanzania's parliament has approved the Finance Bill 2016, which compelled electronic and communication companies registered in the country to list their shares on the Dar es Salaam Stock Exchange from July 2016.
As part of an agreement reached with the Federal Communications Commission, MTN Nigeria agreed to list its Nigerian business on the Nigerian Stock Exchange in due course. In addition, the Nigerian National Petroleum Corporation is being privatised.
The Rwandan government is currently offloading its share in I&M Bank. Mr Rwabukumba said five companies have expressed interest in listing on Rwanda bourse.
In East Africa, Kenya Capital Market Authority officials told The EastAfrican that listed firms and issuers of securities to the public have to fast track their turnaround strategies, particularly in the area of corporate governance.
The regulator also recommends strict adherence to continuous reporting obligations, corporate governance codes, and market conduct requirements.