RSSB CEO Rugemanshuro on pension outlook in Rwanda

Rwanda's largest pension fund, the Rwanda Social Security Board (RSSB), has reported a 6% growth in the first half of this year, driven by contributions and investments, according to data from the National Bank of Rwanda. In an exclusive interview with CNBC Africa, CEO Regis Rugemanshuro discussed the fund's performance and future growth prospects. Rugemanshuro highlighted that the 6% growth was in line with expectations based on previous years' performance, with annual growth rates of 12.5% in 2021 and 11.5% before that. Looking ahead, he expressed optimism for better growth post-pandemic recovery, aiming to achieve a 15% return on investment by 2025. The strategic target includes refining the investment portfolio and increasing member contributions to enhance asset growth. With contributions and investment income playing key roles in asset growth, Rugemanshuro emphasized the importance of sustainability and socio-economic considerations in reviewing contribution policies to boost compliance and contribution levels. While public sector compliance stands above 98%, efforts continue to improve private sector compliance, aiming for broader benefits distribution within the pension scheme. Inflation's impact on pension schemes was also discussed, with Rugemanshuro acknowledging the challenge of aligning with the central bank to mitigate inflation effects on investments. By diversifying into assets less affected by inflation and staying aligned with regulatory changes, RSSB aims to maintain prudent and sustainable investment strategies. Reflecting on interest rate hikes by the central bank, Rugemanshuro praised regulatory management and highlighted RSSB's cautious approach to avoid market shocks while adapting to economic shifts. In terms of investment allocations, the fund balances investments in government bonds for stability with equity investments to support key sectors like finance, telecommunications, manufacturing, and hospitality. Rugemanshuro emphasized the importance of championing local companies' performance and liquidity to drive economic growth sustainably. Despite pandemic challenges affecting sectors like hospitality, RSSB's equity investments have shown positive returns, with ongoing transformation programs focusing on subsidiary optimization. Among the well-performing companies in RSSB's portfolio are Bank of Kigali, MTN, Iñanje, TDB, and CIMERO, reflecting the fund's commitment to supporting economic champions. Rugemanshuro also highlighted initiatives like the Kigali Financial Center and the Virunga Africa Fund, demonstrating RSSB's strategic diversification and regional investment focus. The creation of a venture capital fund with Adames Capital further underscores RSSB's commitment to innovative and diverse investment approaches beyond traditional vehicles. As RSSB continues its strategic transformation and investment diversification, Rugemanshuro's vision for sustainable growth and socioeconomic impact shines through, positioning the fund as a key player in Rwanda's financial landscape.