8 August 2014

Rwanda: Agaciro Development Fund Aims At U.S. $500 Million in 10 Years

While contributions to the Agaciro Development Fund (AGDF Corporate Trust Ltd) have grown to $42.6 million since its inception in 2012, as CEO Vianney Kagabo discloses that the target is to reach $500 million by 2024.

Currently, the actual contributions to the AGDF deposited at the national bank are equivalent to $33.6m with an additional $8.9m in outstanding pledges from organizations.

"We are in a process to recover that money, but we also understand that some companies and institutions made the commitment to contribute while in a bad economic situation. But we are confident they will honor their engagements," says Kagabo.

Since the fund was initiated, various contributors still donate to the fund at a tune of several millions a month. According to the fund management, the ministry of defense is still contributing $68,000 a month, and the national police $40,000.

According to the fund management, the vision is that they will be able to persuade every Rwanda with revenue to be able to contribute in the next 10 years.

According to Kagabo, the calculations are that out of the 11 million Rwandans, statistics show that at least 1,317,000 have monthly revenue; so if everyone committed to contribute $2 per month, the revenue could reach at least $24 million a year.

Added to this vision, is a contribution from the government ranging between 1% to 3% of tax collections. For the fiscal year 2013-3014, for instance, Kagabo points out taxes exceeded $1 billion, 2% of which would translate in about $20m to the fund each year.

"Considering all this, we are confident we will be able to growth by at least US$ 50 million each year for the next ten years, which is our primary target," Kagabo said.

The fund, which was launched by president Kagame as a solidarity fund two years ago to promote a culture of self-reliance, has changed now its direction with a vision to make it a profit-generating institution.

"The fund targets a self-reliance culture in the future. That is why the money must be invested and generate profits."

"The fund targets a self-reliance culture in the future. That is why the money must be invested and generate profits. The profit will be reinvested in public interests activities while preserving the initial capital," said the CEO.

He is also confident regarding the accountability of the fund management. "There will be a yearly survey, a quarterly financial report to the Board of Trustees, to report to Rwandans how their money was invested and how it generated profit," Kagabo explained.

The board will be composed by locals and internationals administrators according to the CEO, and survey and reports will draw a participation of independent experts to ensure credibility to their findings.

The CEO explains that the fund will finance projects based on agreed national priorities as well as develop appropriate mechanisms to manage and grow the fund by supporting key national projects and initiatives, to accelerate Rwanda's progress towards Vision 2020 and beyond.

The document that instituted the fund states that during the annual campaign, Rwandans will be consulted to decide which priorities will be financed and the outcome of these consultations will be validated at the Umushyikirano (National Dialogue).

It says that this will improve the level of financial autonomy of Rwanda as a nation, with voluntary contributions from Rwandan citizens in Rwanda and abroad, private companies and friends of Rwanda. The Agaciro Development Fund sets the tone that Rwandans will work together to drive their own development.

The Fund is Rwanda's first Sovereign Wealth Fund which in 2013 was registered as the AGDF Corporate Trust Ltd, a trust that is overseen by a Board of Trustees which will adhere to traditional norms of transparency and accountability by publishing regular reports and having its financial statements audited annually.

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