Henri Gaperi, Director of the Social Security Fund explains how his institution is adapting to changing demographics, an increased awareness of social security and East African integration. He spoke to KAYONGA RUTI. Below are excerpts:
Qn: The Social Security Fund of Rwanda (Caisse Sociale du Rwanda, CSR) has just concluded a major review of its operations. What do the findings tell us about the organisation’s current state and its potential?
Gaperi: The review highlights a number of findings. The first one is that we have qualified staff and we are staffed at about 88 per cent of our capacity, which is 279 employees.
At this moment we have about 230 employees, and over 200 of those are at least university graduates in appropriate fields.
That puts us in a comfortable position where we have a pool of skilled employees, which we can develop through capacity building so that we can easily use their skills to various areas.
Another important fact is that we have enhanced our quality of service, including having public and customer relations officers.
If you visit any of our offices, you will find people in the front desk area who are able to understand the clients and give them solutions on the spot.
We have also decentralised the organisation. We now have offices in all 30 districts, so we have really brought our services to the people.
This has resulted in an increased compliance on the part of employers. Since we are near to them, we dialogue with them.
Therefore, we are able to follow up activities and undertake necessary senstisation. Because of those changes, the level of contribution has increased significantly.
In 2006, the contributions amounted to about Frw10 billion, whereas in 2007 this increased by 29 per cent to about Frw13 billon.
The benefits paid out also increased to Frw3.7 billion, and we are continuing to sensitise people and to try to bring more of them into the social security net.
Qn: What are the expected outcomes of this review in terms of restructuring and modernisation?
Gaperi: In the first place, if you are managing funds you need sustainability of the regime.
You need to give confidence to people who are contributing today, that they will receive the benefits in 20 to 30 years when they retire.
That requires certain policy and legal reforms to make sure that the regime is flexible but rigorous enough so that on the one hand, people contribute, whereas the money is also available when it’s needed by them.
We will definitely enhance the quality of our services. We will start using modern technology by computerising our data management system that will significantly enhance the services.
But this will go hand-in-hand with building capacity of our staff to be able to tackle those challenges.
Most importantly, as for our intervention in the economy, we want to diversify our investment areas in order to attract the required return on investment, but at the same time to have a considerable socio-economic impact.
Qns: How did the fund perform in key areas such as growth of membership and return on investment?
Gaperi: Well, we registered several successes. First, the number of contributing employers has increased by about 1,300, and the number of registered employees to nearly 40,000.
We are talking here about new employees in 2007 alone. The total investment income also grew at a very impressive rate of 440 per cent, which translated in revenue of about Frw13.5 billion last year.
In terms of investments, our investment portfolio grew by nearly 15 percent from Frw96.2 billion to about Frw110.4 billion.
As for recovery of contributions, we also saw a very impressive growth rate of 108per cent,
or Frw2.3 billion, and we continue to engage our stakeholders in terms of compliancy and to enlarge the social security net to ensure that a good number of Rwandans are protected.
Qns: The fund is a major player in the Rwandan financial and business sectors, yet we hear you have been reducing CSR’s stake in a number of investments; why are you doing this?
Gaperi: Actually, there has not been any reduction, but a change in the investment portfolio mix. We have moved to areas of higher growth, and basically tried to diversify our investments.
Qns: What principle is used by the fund for its investment decisions?
Gaperi: The first one is that the investment has to ensure sustainability for the institution. Meaning that, you look for investments with a very good return but also a manageable risk.
Then you have to consider the socio-economic impact of the investments. That is why, for example, you find that we are not concentrating our investments in Kigali, but we are trying to spread them countrywide.
In that way, the whole country benefits from the positive economic impact of the investments, and the jobs they create.
So we have to ensure that the total assets of the fund are safeguarded for sustainability reasons.
Therefore, the board has made a conscious decision to 50-50 investments on fixed assets and non-fixed investments. Plus, as I said earlier, we diversify.
Qns: You have embarked on a number of major real estate developments in the provinces, is there a business case for such investments in locations that may not bring a good rate of return?
Gaperi: There are quite a number of factors ranging from rate of return, risk involved, job creation, economic impact and potential, but if you look at the investment we are targeting there is adequate range of return, and the protection.