Kigali NSSF shares investment now valued at over $54m

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Buying shares during the Safaricom initial public offer in Nairobi. 

 The Rwanda NSSF now has sharesholding in 12 local and two foreign companies. 

Photo/ANTHONY KAMAU 

By KEZIO-MUSOKE DAVID

Posted  Sunday, October 5  2008 at  10:28

While the region’s national social security funds are currently hit by financial and management scandals, Rwanda’s counterpart of the NSSFs has recorded a significant expansion in its investment portfolio.

Caisse Sociale du Rwanda, the country’s social security fund, has increased its investments in foreign companies in the first quarter of 2008 after buying shares worth $7.6 million in the initial public offer of Kenyan firm Safaricom.

According to the fund’s first quarter report of 2008 released in September, it now holds shares in 12 local and two foreign companies. The report says that the pension fund’s total shareholding are now valued at about $54 million.

“Though most of the investment revenues are collected at the end of the year, it is during the course of the first quarter in 2008 that the CSR made equity investments outside the country,” says the report. It adds that the fund’s investment plan implementation is going well, with 56 per cent of the total investment budget of about $61 million already spent on investments.

Rwanda is in the process of reforming its pension system after the institution suffered from mismanagement before and during the 1994 genocide.

The reforms, still in the infancy stage, are expected to result in the mobilisation of sufficient savings for investment and capital market development.

The report cites Rwanda’s current 0.3 per cent national savings level as frustrating. One of the government’s strategies is to reach the Vision 2020 target of increasing national savings to 6 per cent.

Officials say the pension fund is being revamped with the provident fund pillar being composed of two branches, pensions and special savings.

“The special savings branch is meant to enable members to acquire pre-retirement benefits such as housing and education for their children. Needless to say, the funds under the provident fund pillar will be managed under the defined contribution principles,” the report further says.

“The financing will be through mandatory contributions that may be supplemented by voluntary contributions. Such pre-retirement benefits, we believe, will attract workers also operating in the informal sector,” it adds.

The fund estimates that with a population of 9.9 million, there is an active working population of not more than four million and as many as a million people working in the informal sector in the capital city Kigali.

The pension body says that the active contributing population to the fund is only 220,000.

According to the report, this year alone the fund recorded a number of significant achievements, registering 1,037 new employers in the course of the first quarter, bringing the number of people registered so far this year alone to 17,100.

When compared with to the target of registering 800 employers per quarter, this translates into a percentage achievement of 130 per cent.

According to officials, the total number of employers registered with the pension fund will be determined after the conclusion of the ongoing compliance enforcement campaign.