Rwanda Social Security Board (RSSB), which manages arguably the largest investment fund in the country, over the weekend unveiled their latest investment, the 18-hole golf course in Kigali. The projects came at a time when many are curious about the pension body’s investments portfolio, performance and returns.

The New Times Collins Mwai sat with Regis Rugemanshuro, the Director-General of RSSB, for an exclusive interview, during which they talked about the fund’s investment decisions which have been criticized by the public, as well as what they are doing to increase transparency in their operations.

Below are excerpts:

There has been criticism that RSSB is not as transparent as it should be with regard to investments made as well as the performance of the investments, what do you say to this?

This is a members’ fund, it belongs to them, and there should be no secret on how their money is being managed and any challenges that we may be facing. It is also important for us to be more transparent on performance for accountability.

There is room for improvement and that is why we are working to ensure that we increase our communication to our members. Members should expect to see more communication as it is their money and they have a right to understand what is going on.

We will do our best to make sure that they are aware of projects that we are investing in and how they are faring.

Speaking about performance, what was the recent performance of the investments?

Despite the pandemic, the fund’s earned revenue from investment activities in the financial year ending June 2021 was Rwf66.4B, the year prior to that, it was Rwf59B and the year prior to that it was Rwf 49.3B.

It is important that members are aware that it is performing and that there are opportunities to get better and grow. That is why we are grateful for the recently granted autonomy as it allows us to react to markets faster.

It also allows us to recruit and train properly to respond to members' expectations. To get members' support, they need to be kept aware of what is happening. It is going to be a collaborative effort. We are open to constructive criticism, we are aware that there is opportunity to improve.

In part of our investment, we need to do better explaining. Also, investments often carry some risks and it often depends on how good you are at minimizing those risks. As we continue to do that, we will communicate openly.

In what sectors does RSSB have investments in at the moment?

We are in the financial sector, manufacturing, and real estate. We have also invested in research in pharmaceutical companies, we have also invested in technology. RSSB also has investments in secondary markets in Rwanda and Nairobi Securities Exchange.

We are at a point where we are looking at new asset classes to consider going forward.

In light of openness, RSSB has also been criticized for investing significant member’s funds in real estate projects that are out of reach for members, for instance, Vision City housing project.

It is a wrong perception, real estate is not our highest exposure, and it is less than 20 per cent of our portfolio. We have exposure in other sectors including the financial sector.

The perception is largely because it is what people can see but from a numbers perspective, we have more investments in other sectors. For instance, construction is very important, if you look at the development of Rwanda, construction has a large role in job creation, emergence of industries.

RSSB is an investor in 4 major banks in Rwanda, which supports financial sector development. This is why we ought to share more insights going forward.

Back to real estate, some investments made in the past faced some challenges, where we learnt lessons. For instance, we have adopted the design, build and finance model where the contractor funds all the risks.

We will also not be doing what you might have seen in Vision City which had complete houses seeking clients. We will be building them on demand, aware that there is a ready market.

We are also working on affordable homes projects in Rusororo and Rwamagana, The feasibility study is being done and the tenders have been launched. These houses will be valued at a maximum of Rwf35m. We will use the model of design, build and finance aimed at reducing the risk and built on demand.

For a fund like RSSB which has significant investment capacity, what is on your checklist when deciding what to invest in?

For every investment we make, three things are important; member first, data-driven and high performance. It has to be good for the members as it is their money, secondly, is if we have enough data to understand the investment from analysis. Third is cost opportunity where we ask ourselves if this is the best use of money in comparison to other alternatives we have.

We make sure that at all times, we can ensure sustainability, safety of the funds. Being a fund that is owned by members, that is important.

We have an internal investment policy which is further being reviewed and improved to make sure that the way we are thinking is aligned to the times we are living in and to be able to diversify as opposed to previously when it was dominated by specific asset classes.

We will soon be onboarding an investment advisor, globally renowned, who can help us elevate our game with regard to investment as the scene changes.

How do you strike a balance between supporting strategic national interest and profitability?

RSSB has a large investment fund, about $1.5B, our role is also unique in a way that there are some strategic investments that we make to ensure national goals are achieved.

While financial returns are important, from a bigger picture perspective, there are things that may not give us the most returns but from an impact perspective, it will stimulate the economy, help create jobs and lead to achievement of milestones. 

We always do the most to minimize the risk on the fund.

You recently gained autonomy. Does this mean that you will no longer be subject to scrutiny by the Auditor General following your new found status?

We are very grateful for the involvement of the Auditor General’s office in audits. Many achievements that we have made are because of the recommendations of the auditor general’s office. The value the office brings to RSSB is major.

What autonomy helps is that it helps us adapt to the market very fast, compete for talent and do things faster in line with the sectors.

While we are allowed to have an external auditor upon consultation with the auditor general, if you ask me, we are not willing to give up the advice and insight from the Auditor General. Many of the good things happening is because the Auditor General has made recommendations.

The autonomy also allows you to stay out of tendering or hiring processes through government agencies such as National Public Procurement Authority or Public Service Commission. What would you say to those who worry that this could see misuse of the ‘freedom’?

As a member’s fund, we have to make sure that we are doing things right and in accordance with the law, with autonomy or not, that does not change, it has to be done in best practice and in accordance with the law. Where the autonomy allows us some flexibility on certain procedures, they will still follow set guidelines and by the law.

With autonomy, from an investment viewpoint, we are trying to achieve value for time. We can do this ensuring that controls exist to ensure that there is no stepping out of line.

A few weeks ago, it was reported that the Rwanda Investigation Bureau was looking into some allegations involving one of your subsidiaries. How is this going?

We are very open and collaborative with the investigation and as management, we are also interested in seeing the findings. This being a member’s fund, there will be no stone left unturned to find out if indeed anything went wrong. We look forward to it and our books are open for anyone with authority, and capacity to audit them.

Having RIB doing an investigation will also provide confidence to members, we trust in our authorities and their capacity to find out if anything happened. We are open and collaborative and ready to provide any information. If anyone did step out of line, they will be held accountable and if nothing happened as per allegations, it helps clear any rumours.