The past few days have been quite eventful for African SWFs. Last week, nine of the most active strategic funds of the continent signed an MoU in Rabat to create the African Sovereign Investment Forum (ASIF).
A few days later in Addis Ababa, one of the world’s newest SWFs, the Ethiopian Investment Holdings (EIH), officially absorbed 27 of the country’s largest companies at a summit that hosted them all under the same roof. The assets, which are valued at US$ 38.5 billion, will be managed under eight different sub-sectors, from hospitality and transport, to financials and communications. The companies contribute to 10% of the country’s GDP, and are expected to grow their joint revenues from US$ 7 bn in 2021 to US$ 10.4 bn in 2022.
In an interview with Global SWF last month, CEO Mamo Mihretu and Deputy CEO Bilen Mammo said that EIH was modeled after Temasek and Khazanah, and that it had a triple mandate: (i) pursuing the national development plan and the creation of wealth for current and future generations; (ii) changing the narrative around investment in Africa by becoming a world-class partner that de-risks investment; and (iii) unlocking the value of tangible and intangible assets by providing expert oversight and leveraging global best practices.
It does seem that EIH is starting off the right foot as it follows best practices from more established funds and gets properly supported but the task of becoming Africa’s largest strategic fund overnight is not an easy one.
Almost 6,000 kms across Africa to the West, in Libreville, FGIS was quite busy too, joining the UN-convened Net-Zero Asset Owner Alliance. The Gabonese fund has therefore become the third SWF to join a formal commitment to Net Zero, after Germany’s KENFO (NZAOA) and NZ Super (PAII). Only 10% of the Top 200 State-Owned Investors have joined either of those two official pledges, which has created significant pressure for other SWFs and makes the feat of Gabon’s SWF even more impressive. FGIS manages around US$ 1.7 bn, of which 78% is invested in the domestic economy.
The 2022 GSR Scoreboard, which is now finalized and will be released on Friday, highlights the great progress done by African SWFs and, in particular, FGIS, around Sustainability.
