The Rwandan government has appointed seven new board members to the Agaciro Development Fund as it seeks to take the sovereign wealth fund to the next level. The appointments include foreign and domestic asset managers and government officials.

Founded in August 2012, Agaciro has remained a minnow in the SWF universe with AUM estimated at just over US$200 million. Funded by the government, investment returns and contributions from Rwandan citizens and NGOs, it aims at maximizing its long-term return without undue risk, so as to reduce Rwanda’s debt burden and develop the economy. Civil servants had contributed RWF3 billion (US$3 million) per annum to the fund, whose name means “dignity” in Kinyarwanda.

Government shares in various companies were transferred to the fund to boost its fund size. Other assets include treasury bonds and stocks listed on Rwanda Stock Exchange.

The New Times reported that former Alltel CEO Scott T Ford, currently CEO of Westrock Asset Management, an alternative asset management firm, now chairs the board. His deputy is Thierry Kalisa Mihigo, a senior economist at Ministry of Finance and Economic Planning. Other members are:

  • Aime Ngarukiyintwali, the head of Residential Mortgage Backed Securities (RMBS) at Mount Street Portfolio Advisers

  • Andrew Rozanov, a long-standing expert in institutional fund management and formerly a non-executive director and chairman of the Board of the National Investment Corporation of the National Bank of Kazakhstan.

  • Doreen Karake, who is currently leading the Transactions Structuring and Support (TSS) Division at the Rwanda Development Board.

  • Jeanne Françoise Mubiligi, the chair of the Rwanda Chamber of Women Entrepreneurs.

  • Alysia Silberg, a General Partner at Street Global Venture Capital and a seed-stage technology investor.

With three female board members, Agaciro is relatively highly progressive towards female inclusion in the state-owned investor universe.

The inclusion of international experts suggests the government could be seeking FDI partners in strategic sectors, as well as firming up governance and investment strategy.

The appointments also indicate that Rwanda is seeking to leverage the fund to advance venture capital investments in the country of nearly 13 million. The strategy adopted by the fund is likely to chime with the government’s focus on investment in boosting agricultural productivity and developing digital infrastructure. Rwanda is also heavily investing in its human capital with a heavy emphasis on ICT, which the government wants to utilize to diversify the economy. 

While the country has enjoyed political and economic stability since the end of its brutal civil war in 1994, it endures a low level of banking sector penetration which limits the ability of the financial sector to provide credit to the private sector. Agaciro owns 67% of the Development Bank of Rwanda (BRD) which is aligned with Rwanda's economic transformation plan, the National Strategy for Transformation. It has supported the BRD with capital injections to deliver development, including an important role in delivering stimulus in the wake of the Covid-19 pandemic. BRD also swung to a profit in 2020, following a long period of losses.

Agaciro scored 52% in Global SWF’s 2021 Governance, Sustainability and Resilience score, down 4% from 2020. Compared with other African funds, it has the continent’s highest score in governance. It lags behind in sustainability and resilience, partly due to a lack of transparency – it has not published an annual report since 2018.

Yet, even the existence of the nine-year-old fund indicates that Rwanda progressed earlier and faster than Kenya which has been unable to formalize its fund, seven years after it drafted its first national bill. Mozambique is also in the process of creating a SWF but faces delays due to the impact of conflict in the north of the country on developing gas reserves, which will be its source of capital, in addition to challenges posed by price volatility, governance shortcomings, and the high cost of public debt servicing.