The Office of the Prime Minister on Thursday, February 18, gazetted the amended law establishing Rwanda Social Security Board (RSSB), in a move that will see the firm gaining greater autonomy from the state in terms of governance.
Under the new law, the entity is expected to have more independence from government; the senior management will take charge of making decisions on its daily functions while board will take direct strategic and governance oversight of the institution. The body will, however, remain under the supervision of the Ministry of Finance and Economic Planning.
Previously, RSSB’s activities were overseen by the Ministry of Finance and Economic Planning, in close collaboration with the Ministry of Public Service and Labour and subject to public sector procedures by Parliament and Office of Auditor-General.
"The publication of the Autonomy law for RSSB as a Specialized Organ is a major milestone in the ongoing radical transformations to make RSSB more efficient and fit to deliver on its mandate,” Regis Rugemanshuro Director-General, RSSB, told The New Times on Thursday.
He added; "This happens while the institution is undergoing a major IT Modernization and an Organisation Restructuring. All this is part of its 2020-2025 Strategic Plan, meant to transform RSSB into a "Member first, data-driven and high performing organisation”.
Making it count
The legislation among other things seeks to make RSSB autonomous in the recruitment of staff, public tender and procurement, as well as making investment decisions, among others.
This, according to the body, will help improve its operational efficiency and performance while allowing competitiveness on local and regional markets.
"We are grateful to the leadership that approved the initiative and all government branches that worked with us to see it through. We aim to make it count for the benefit of our members,” Rugemanshuro noted.
Why push for autonomy?
With a growing investment portfolio, competitiveness and fast pace in equity markets, autonomy is expected to enable swift decisions at RSSB.
In September, Cabinet appointed a nine-member Board of Directors to the pension body, led by Christopher John Wales who has previously been involved in designing economic and fiscal policies, fiscal institutions, revenue administration among others, in different countries.
The firm is seeking to be more involved in equity investment, investing in companies and being involved in making them profitable as opposed to overreliance on fixed income investment such as bonds and shares that are low risk but have relatively lower returns.
By cutting down the red tape that came with multiple stakeholder consultations, officials say that the management and board will be able to have agility to see investments flourish.
This is also expected to come in handy in RSSB’s new 5-year strategic plan which the entity defined as ‘high performance, members’ first orientation and operational excellence.’
With the autonomy, RSSB will not be required to use traditional public service recruitment processes allowing them to attract and retain top talents in the financial sector competing with local financial industry players in aspects such as remuneration.
New partnership law gazetted
Another legislation that was gazetted is the new law governing partnerships, which experts have described as a ‘game changer’ especially as the country seeks to attract more investment for the local ecosystem.
Under the law, partnership businesses will be structured in Rwanda.
This was previously non-existent in the country, as a result, some international companies failed to set-up on the local market.
However, according to officials, the new law will mean appetite international Private Equity as well Venture Capital, as they are typically structured as partnerships.
In addition, experts argue that many existing professional service entities such as legal firms and audit firms are likely to convert into partnerships as this is more suited to their business.
The move, officials say, is part of legislative reforms spearheaded by Kigali International Financial Centre (KIFC), aimed at promoting and developing Rwanda as a business and financial center for both local and international investment.