The Agaciro Development Fund Corporate Trust (AgDF) is looking to develop a long-term investment framework, an indication that the fund could soon start utilising the money it has so far mobilised.
Vianney Kagabo, the chief executive officer, said the board of trustees has already started a process of hiring a consultancy firm to do the job.
The sovereign fund, which stood at Rwf24.4 billion in December, was a subject of debate last year, with many Rwandans urging the managers to invest the money so far raised in projects like hospitals and schools.
The AgDF has been investing the money in government bonds and short-term bank deposits, with an annual interest of between eight and 12 per cent.
However, Kagabo defended the Fund managers’ reluctancy to invest the money, saying it was too small to be exposed to large risks.
The AgDF seems to be refocusing its strategy though, with the move to recruit investment advisors. Kagabo said they want to diversify the fund by investing in equities rather than the money markets alone.
“Equities can be development projects with high yields, fewer risks since we are risk averse,” he explained in a telephone interview on Thursday.
He said the consultants will advise the board on how best to go into equity investments or projects in housing and electricity.
“If we get someone to look at our investment policy and advise us accordingly, then we don’t have to wait to first raise tens of billions to start investing it,” he explained.
AgDF was launched about three years ago by the government. The initiative is based on voluntary donations by Rwandans, well-wishers and corporate companies. It is aimed at making the country self-reliant as far as funding development ventures is concerned.
The fund receives between Rwf150 million and Rwf250 million a month, mainly from government institutions like the Rwanda Defence Forces, which contributes Rwf43 million every month, the Police (Rwf32 million), the Rwanda Revenue Authority and the Rwanda Environmental Management Authority.
Kagabo said the investment advisor would be recruited by March, and would work with the Fund managers for six months.
Their scope of work will range from setting the Fund’s investment objectives to training and capacity building of AgDF staff on the investment policy, benchmarks and guidelines, Kagabo added.