24/07/2023

PM NGIRENTE URGES EFFECTIVE MANAGEMENT OF SOVEREIGN WEALTH FUNDS

In order to accelerate an efficient and diversified economy, Prime Minister Edouard Ngirente has emphasized the crucial need for the effective management of African Sovereign Wealth Funds.

His remarks came at the conclusion of the second annual meeting of the African Sovereign Investors Forum (ASIF) held from July 6 to 7 at Kigali Marriott Hotel.

The forum, centered around the theme of “Strategic partnerships: driving Africa’s resilience and sustainable development,” brought together various authorities in the sovereign wealth funds ecosystem, government officials, and other stakeholders.

The primary objective of the gathering was to assess challenges and explore development opportunities across all sectors of the African economy.
Sovereign wealth funds are designed to preserve and grow a nation’s wealth for the benefit of future generations. Currently, Africa boasts at least 30 sovereign wealth funds with a combined value of $100 billion.
“Africa is renowned for its vast resources and potential for development, yet there is much work to be done to move beyond theoretical discussions and implement strategies aimed at harnessing Africa’s own resources for its development,” Ngirente said.
While investment opportunities in various sectors such as energy, mining, infrastructure, agriculture, industry, and manufacturing often receive attention, Ngirente emphasized the importance of initiating projects that transform African resources into wealth.

“African Sovereign Wealth Funds will play a pivotal role in developing an efficient and diversified economy through equitable diversification and wealth generation for future generations. To achieve this, we must ensure that these funds are well-managed,” he asserted.
Ngirente further highlighted the significance of partnerships between African Sovereign Wealth Funds, enabling African investors to add value to services and products for self-reliance. However, he emphasized that this can only be effective if African sovereign wealth funds adhere to the best practices and principles of SWFs, including independence, transparency, and accountability.

Rwanda’s sovereign wealth fund, the Agaciro Development Fund (AgDF), has been instrumental in the country’s development through various investment portfolios across different sectors of the economy.

Clare Akamanzi, CEO of the Rwanda Development Board (RDB), commended the fund for its role in instilling dignity in the country’s development journey and reducing dependency on external aid.

“They have played a key role in establishing alternative sources of funding that can truly finance our development. Today, approximately 80 percent of our budget is financed by domestic resources,” she explained.

Akamanzi further noted that Rwanda has experienced remarkable growth in attracting investments, from $300 million in 2010 to an average of $2 billion over the past three years, despite the challenges posed by the global pandemic. She attributed this success to the creation of a conducive business environment and frameworks that instill investor confidence.

As AgDF undergoes structural changes, its approach to continued investment, whether sector-agnostic or sector-specific, will be determined as it strives to achieve $1 billion in asset value by 2030.

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PM Ngirente urges effective management of sovereign wealth funds – The New Times