Rwanda’s Agaciro Development Fund (AgDF) is one of several state institutions seeing a change of leadership this week, with Gilbert Nyatanyi replaced as CEO by Tesi Rusagara, who was serving as the Managing Director at Kigali Innovation City and also board member of the Capital Markets Authority Rwanda. Aged 33, she holds an MBA from Stanford and worked in Deloitte US before returning to Rwanda in 2019.
Rusagara is now the only female CEO of a sub-Saharan African sovereign wealth fund and is supported by CIO Elise Ntamitondero, the continent’s only female CIO. Two of AgDF’s six-member board are also female, which suggests the Rwandan sovereign wealth fund is ahead of many peers in promotion of women to leadership positions.
Appointed in October 2020, Nyatani has helped AgDF transform from a tiny fund based on small contributions from citizens to a small but growing sovereign wealth fund, which seeks to invest strategically in the Rwandan economy while ensuring a strong yield by transforming the profitability of portfolio companies. It was established in 2012 as an emergency fund receiving voluntary contributions from the Rwandan Diaspora, but this funding method was phased out in April 2020 to explore other sources of investment income.
In 2022, AgDF grew 7.6% to US$269 million and this year it has risen by a further 4% to US$280 million with 71% of total assets under management (AUM) in equity with the rest in fixed income, and cash and near-cash assets. The portfolio included 29 firms, of which 23 were formerly state-owned enterprises. Its biggest holdings are its stakes in the Development Bank of Rwanda (RWF61.2 billion (US$51 million)) and BK Group (RWF52.6 billion (US$44.0 million) – representing nearly 40% of total AUM and 55% of total equity holdings at end-June 2022. In H1 2022 (the latest available figures), AgDF reported a profit of RWF12.7 billion (US$10.6 million). AgDF is aiming to reach US$300 million AUM by end-2023 and US$1 billion by 2030, which requires a significant shift in gear.
At home, AgDF is backing the establishment of Rwanda Fertilizer Company, a fertilizer manufacturing plant, with US$3 million of investment. Operations are due to start by the end of this month.
Nyatanyi also sought to diversify AgDF’s to overseas investments, which up until 2022 consisted of just one asset representing 0.7% of AUM, and generate stronger returns. In June, the fund indicated it was looking to hire up to 12 new members of staff across investment management, legal, finance and operations as it prepares to increase its foreign investments and diversify its holdings. The focus will primarily be on development banks in Africa with ticket sizes below US$10 million.
In October 2022, AgDF invested more than US$8 million in the stock of the Burundi-based Eastern and Southern African Trade and Development Bank (TDB), the financial arm of the Common Market for Eastern and Southern Africa (COMESA) which funds economic schemes across the bloc. AgDF is the first sovereign wealth fund to invest in the bank, securing a 0.5% stake. The move followed the fund’s divestment from local firms, Multisector Investment Group (MIG) and the Mushubi tea factory, which together were worth RWF345 million (US$0.3 million).
Explaining his strategy at the time, Nyatanyi told The New Times, “When you also look at the Rwandan franc compared to the United States Dollar, let’s say from the past 6-7 years, we went from RWF700 to RWF1,000, and looking at TDB, they have been paying dividends on return on equity investment between 13% and 10%. So when you take that into account, performance of TDB, position of the Rwandan franc, position of the United State Dollar, the global economic outlook, then we think it’s a good investment on our end.”