Agaciro Development Fund (AgDF) – Rwanda’s Sovereign wealth fund – grew to Rwf320 billion as of May 2024, from Rwf18.5 billion in 2012, the year it was launched, as it accumulated significant assets under management more than a decade ago, according to data from the organisation.
These figures imply that the fund’s assets increased 17-fold between 2012 and 2024.
Its leadership projects the fund will grow to at least Rwf1 trillion within 10 years.
AgDF is Rwanda’s sovereign wealth fund that was initiated at the ninth National Dialogue Council in 2011 and launched officially by President Paul Kagame on August 23, 2012. It was established to build up public savings to achieve self-reliance, maintain stability in times of national economic shocks, and accelerate Rwanda’s socio-economic development goals.
The name Agaciro embodies dignity, self-reliance, and self-worth.
As Rwanda marks Liberation Day on July 4, Agaciro is one of the milestones to reflect on; it helps support economic growth by ensuring the availability of funds locally, which reduces dependence on foreign finance, creating jobs for Rwandans, and improving their livelihoods, its management pointed out.
According to the fund management, its journey has been quite steady and growing, albeit with some challenges.
At its inception, the Agaciro Development Fund, as a sovereign fund, was quite different from other sovereign funds; it didn’t have any income from natural resources like gold, diamond, gas, and others, as other sovereign wealth funds do.
Its main source of income used to be voluntary contributions from the private and public sectors, as well as the diaspora community and friends of Rwanda which phased out in April 2020.
Starting in 2018, it became a shareholder in different companies — totalling 27 — as a way of generating income instead of just having savings. This presented a challenge because when the fund was initially set up, it wasn’t intended to be a holding company.
Contributing to Rwanda’s development
The fund was set up with a three-fold mandate to serve as a buffer in case of economic shocks; to contribute to the socio-economic development of the country; and to save for future generations.
Currently, its focus is on contributing to the socio-economic development of the country. It achieves this by identifying the sectors in which to invest and assessing their impact on the country’s economy as well as the return to the fund.
Its portfolio spans various sectors including agriculture, financial services, ICT, and Logistics, among others. It also invests in [bank] deposits and bonds.
Currently, investment decisions of the fund are focusing on several important aspects; return, the concept of impact, the integration of ESG (Environmental, Social, and Governance) factors, and the challenges and opportunities brought by the digital era.
To ensure profitability and better performance of its investment portfolio, one of the things it does is to extend assistance in terms of corporate governance, managing the board of directors, and ensuring sound financial practices in companies where it holds a stake.
In 2023, the Fund developed its five-year strategic plan (2024-2029). The strategy priorities include the transformation of existing portfolio companies to improve their performance, the food and agri sector to drive greater value within Rwanda, and opportunistic investments outside the existing portfolio and food and agri.
With this strategy, the Fund would like to position itself as a best practice investor and asset manager with long-term orientation and flexibility in its investment decisions, operating with dignity, accountability, and integrity and upholding Rwanda’s national values.
The fund management said it is grateful to Rwandans, observing that without the people of Rwanda, it would not have been possible to amass such assets.
It indicated that the driving force behind the success remains President Paul Kagame, who made the call to Rwandans, and their response was hugely positive.
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Agaciro is adjusting and broadening its investments, both in terms of asset classes and geography, to expand the fund through investment returns.
One such approach is its venture of $8 million in the capital stock of the Eastern and Southern African Trade and Development Bank (TDB) in 2022, which already started getting a return.
Its management’s mandate is to maximise the fund’s return over the long term, without undue risk, to reduce Rwanda’s debt burden and secure a better Rwanda for future generations.
Its core values as an organisation include running the fund professionally and prudently and being conscious of the fact that it belongs to the people of Rwanda.