SSFR seeks to expand its investment portfolio

LOOKING INTO THE FUTURE: Henry Gaperi

BY ALEX NGARAMBE
The Social Security Fund of Rwanda (SSFR) is in plans to expand its investment as away of increasing its portfolio, the pension body has said.

According to official statistics from SSFR, the total value of the existing portfolio stands at Rwf1.4billion ($255 million).

“Increasing the investment in the country is good for the economy since there would be increased taxes, more jobs as well as goods and services for the people to consume,” said Renee K Blasky the investment advisor at SSFR.

The social security fund is a body that is charged with providing pension upon retirement to its members and receiving contributions from members on the quarterly basis.

By the end of October 2009, the composition of the existing portfolio stood at 34 percent for real estate, 20.7 percent for equity and 45.3 percent for fixed income.

In their new business plans, SSFR will look for investment projects that are worth $1 million and above with competitive real rates of return and strong sponsors who will take risks along side SSFR.

The targeted areas for investment include the housing sector where mortgage industry will receive support from SSFR. The social fund will also venture into capital markets; they also want to go into leisure, infrastructure and ICT.

“Our objective is to diversify portfolio, lower risks, playing a supportive role to financial industry,” Blasky explained.

The fund has had a positive economic impact on the Rwandan economy where it created 2,123 jobs last year through direct investment and 245 jobs through indirect investment.

Its direct tax contribution last year was Rwf844 million whereas its indirect tax contribution reached Rwf2.4 billion.
SSFR according to information availed will also require businesses that seek funds from them to have a sound business plan, capital structure, marketing strategy as well as details of sponsors and management teams.
This move will help small and medium businesses to access finances to grow their businesses since it’s the mandate of SSFR to support SMEs.

The financial model for businesses seeking funds will have to include a minimum five year projections, income statement, balance sheet and cash flow statement among others.

Last year the pension body said it was planning plans to invest Rwf32 billion, doubling what was invested last year in 2007.
THE NUMBERS
Rwf 1.4b
The total value of the existing portfolio
2,123  The number of jobs that NSSF created this year through direct investment
Rwf844m
NSSF’s direct tax contribution last year whereas its indirect tax contribution reached Rwf2, 438 million