Rwanda’s economy has been growing steadily for the past 20 years. In December 2011, the National Dialogue Council proposed the creation of a Sovereign Wealth Fund, which would be funded by contributions of civil servants and the Rwandan diaspora. We had the pleasure of catching up with Mr. Gilbert Nyatanyi, who has been CEO of Agaciro since September 2020 and wants to take his country’s SWF to the next level.
[GSWF] The fate of Agaciro changed when in April 2020, the Government halted the monetary contributions to the fund. How will Agaciro change in the next few years?
[AgDF] Contributions were 60% of our revenues so the response is not straight forward – we must reposition and change from an income collecting fund to an income generating fund. This includes:
Privatizations proceeds must go straight to Agaciro
We must maximize the value of our portfolio companies
We must diversify our investments
We are available for co-investments
[GSWF] Your portfolio combines bonds and stakes in some of the country’s leading entities. How will it evolve?
[AgDF] When the fund started, the idea was not to act as a holding company – and when the transfer of assets started in 2018, we did not have the proper structure in place. We are now in the process of streamlining and harmonizing the portfolio, by identifying (i) companies that we want to exit right away, (ii) companies that we need to turn around and exit, (iii) companies that we need to turn around and keep, and (iv) companies such as Bank of Kigali, that are in a good position and there is no initial action required.
[GSWF] AgDF had one of Africa’s best scores in our GSR Scoreboard (52%). Why haven’t you released a report since 2018?
[AgDF] This was due to a mix of different circumstances, including CEO change and Covid-19, but we are finalizing our 2020 annual report. And additionally, we are still audited by one of the Big 4 and our accounts are shared with the MoF and Parliament.
[GSWF] How do you measure the success of the Agaciro Fund as an investment and development organization?
[AgDF] We started investing in 2014 with US$ 26 million, and our current AuM is US$ 234 million despite the halt in contributions. This is one of our KPIs and we are proud of our growth. We are young and small, but we remain ambitious and would like to reach US$ 1 billion by 2030. Around 80% of our portfolio is equities, with the rest being fixed income and a hotel we are seeking to divest. We need to diversify our allocation and seek yield-generating assets incl. private markets that can get us to that US$ 1 billion.
[GSWF] What sectors will keep fueling Rwanda’s growth on the way forward? Will you seek co-investors?
[AgDF] Rwanda is landlocked, or land-linked as we say here . Our main wealth is human resources and the idea is for the country to become a hub for financial services, transportation, health, education, technology, etc. As investors, we are are still brainstorming and deciding whether we should define strategic sectors (like FGIS with education, or NSIA with infrastructure) or remain sector-agnostic.
[GSWF] What is the alignment of Agaciro with pension fund RSSB and with promotion agency RFL and its project KIFC?
[AgDF] We have several state entities including the SWF, the PPF, the IPA and the development bank – and we must work together to promote our country. For example, QIA was very interested in investing in Rwanda, and given our smaller size, they decided to partner up with RSSB, which is close to US$ 2 billion under management now. But we will keep growing and seeking partners in other SWFs.
[GSWF] What do you think of the rising importance of ESG and particularly Climate Change in SWFs’ strategies?
[AgDF] ESG is not something you can hide from – it is rightly inevitable and we will embrace it in our strategy on the way forward.
[GSWF] What summary would you make of the past ten years and what do you expect in the next ten?
[AgDF] Setting up the fund was a very good decision – however, lots of things have changed since then and a reform is much needed now. Historically, we have had three mandates (stabilization, savings and infrastructure), but I think stabilization should be secondary. For instance, Agaciro did not have to intervene during Covid-19 because there were other resources (IMF, WB, etc.) and this makes me think that we should rather focus on the other two strategies, in order to reach our financial goals in 2030. Right now, there is no specific law avoiding withdrawals, but the leadership is very much behind us and we do not expect our capital to be depleted anytime soon.
[GSWF] On a personal note, how have you adapted back to your country and what do you think it is still needed?
[AgDF] I moved back to the country in 2015 and I was impressed by the country’s development. It is my privilege to serve as CEO of the SWF of my country and I am hoping to make my small contribution towards the long term view of 2050 and beyond. We are finalizing our strategy and hoping to present the “Agaciro nouveau” in the second half of next year.
