Agaciro Fund seeks to diversify investments after going global

Agaciro Development Fund (AgDF) will, in the coming days, begin diversifying investments and improving its policies.

This follows the Fund’s admission into the International Forum of Sovereign Wealth Funds (IFSWF), last week, according to Francine Uwamariya, the acting chief executive of the Fund. The admission to the international umbrella body of sovereign funds will see AgDF benefit from a global pool of network to inform practices such as investment research and policies.

Established in 2009, the UK-based international body serves to enhance collaboration, promote a deeper understanding of sovereign wealth funds activities to the industry standard for best practice and governance.Agaciro fund was launched in 2012 as Rwanda’s first sovereign fund. The 30-member body endorses transparency, good governance, accountability and prudent investment practices in the handling of sovereign funds, according to a statement.

The body also ensures that sovereign funds under its management have adequate operational checks and balances and risk management.This development comes at a time AgDF is seeking to diversify its investments through its investment arm, the AgDF Corporate Trust Ltd.

According to Uwamariya, since the beginning of 2014, they have invested in government bonds and commercial banks’ term deposits.The Fund has since grown to about Rwf30.5 billion, with proceeds coming from contributions from ordinary Rwandans, national agencies and the private sector.“Being part of the international body means being part of a peer network with a push toward proper management and investment of sovereign funds,” Uwamariya said.“This will help us in identifying feasible investment opportunities for the fund as well as revise our investment policy with possibilities of diversifying our ventures beyond domestic opportunities,” Uwamariya said.

IFSWF benefits

The previous move to invest in money markets was designed to protect the Fund from risk and spur its growth.Other than returns on investment and citizen contribution, AgDF also gets Rwf 5 billion every fiscal year from tax revenues and 5 per cent per cent of proceeds from every public asset privatised. The fund also gets 5 per cent on royalties from minerals and other natural resources each year.

On Rwanda’s admission, Adrian Orr, the IFSWF chair, said there was no doubt that Agaciro Development Fund and Rwandans, in general, deserved to benefit from the membership.“We are delighted to welcome AgDF and Rwanda to IFSWF. Our purpose is to raise the expected investment returns of member sovereign funds over the long term by sharing knowledge, experience, investment strategies and research through application of the Santiago Principles,” Orr said.Rwanda is the fifth African country to join IFSWF after Angola, Libya, Botswana and Nigeria.

However, of all the member African countries, Rwanda is the only one with funds from voluntary citizen contribution.Most countries rely on earnings from such sources as natural resources.The initiative to set up the fund was first mooted during the 2011 National Dialogue Council (Umushyikirano).AgDF was set up to help build up public savings to achieve self-reliance, maintain stability in times of shocks to the national economy and accelerate socio-economic development goals.

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