Diaspora Mutual Fund to be revived

Members of the Rwanda Diaspora Global Network (RDGN) executive committee in the country are planning an investment forum next week to consider modalities of reviving their mutual fund.Initially mooted during the 2007 Diaspora retreat in Kigali, the Rwanda Diaspora Mutual Fund (RDMF), a pool for collective investment by the Diaspora community, got the blessing of the central bank in 2009 but never took off.Poor planning and marketing as well as lack of committed stakeholders was blamed for the delay of the Mutual Fund.Dr Egide Karuranga, a member of the Diaspora network, said they are trying to come up with better strategies.The National Bank of Rwanda (BNR) issued the Fund with a provisional licence on April 27, 2009. At the time, it was registered as a limited liability company in the central bank and work had started on a prospectus and business plan.Joy Ntare, the official in charge of financial stability at BNR, yesterday told this paper that the project was, toward end 2009, transferred to the Capital Markets Authority (CMA) as the rightful manager.Ntare said: “It was under our management before the introduction of the capital markets but it was then, in 2009, transferred to the capital market as per the new law regulating collective investment schemes.”Robert Mathu, the executive director of CMA, said the agency regulates such funds but cannot do much as the initiators are responsible for its actual operation.In the recent past, he said, the project stalled partly because the appropriate legal framework was not in place, especially the law regulating the creation of trust and trustees. This, however, has been established.Mathu added: “The trust law is now there. We can facilitate by showing them (Diaspora community) the roadmap. We are following up on the project as this is in line with our objective of mobilising long term capital,” he added.Marie Grace Ruzindana, the RDGN officer in charge of mobilisation, unity and reconciliation, concurs with Dr Karuranga about poor planning and marketing as factors that delayed the project.She said the previous RDGN executive committee “decided that we first stop and finalise the One-Dollar Campaign (ODC) project” because they could not handle more than one project at ago.“We couldn’t do it, or run two projects at once. Now that the ODC is concluding, the investment forum we have next Monday will examine modalities of continuing with this,” she said.Diaspora remittancesDiaspora remittances continue to be a key foreign exchange earner for Africa with about $5 billion released annually.The central bank’s annual report for the July 2012-June 2013 period indicates a gradual increase in net current transfers. In the report, net remittances from the Diaspora were $65.07 million in 2010, $110.18 million in 2011, $118.25 million in 2012 and $114.67 million in the 2012/2013 period. In 2006, just $8.22 million was recorded.The report also indicates that efforts are under way in the East African Community, to jointly target remittances from the EAC citizens in the Diaspora for investment.A joint strategy has been developed and action plan drawn to exploit this foreign capital potential source.