The African continent is vast in size, diversity and wealth - and its SWFs need specific guidance on governance and resilience. Today, its wealth of US$ 97.9 billion is managed by 30 SWFs or sub-funds: 9 stabilization, 9 savings and 12 strategic funds. This capital is unevenly distributed, with significant differences between the North and the South of the Sahara desert.

North African countries have traditionally benefited from vast oil and gas reserves. Libya’s LIA, which is in the process of having its assets unfrozen, is by far the continent’s largest, and Morocco, Tunisia and Egypt also have sizeable SWFs. Algeria’s RRF was once the king of the continent with c.US$ 80 billion but was rapidly depleted and is now exhausted.

In the South, the most significant funds are Botswana’s Pula Fund (from diamonds), Angola’s FSDEA (recently restructured) and Nigeria’s NSIA. The latter constitutes a best-in-class example not only of good governance (following the failure of the ECA), but also for its ability to mix three different mandates, with both domestic and foreign investments.

The future of the continent’s SWFs is largely dependent on its politics. South Africa is the third largest economy but is unable to agree on an optimal structure. Mozambique has been cursed with civil unrest since huge gas reserves were discovered in the North of the country. And Kenya has been unable to formalize its fund, seven years after it drafted its first national bill. Given the endemic problem of fiscal deficits across Africa, the best option may be strategic funds that attract further FDI.

Related funds FSDEA LIA NSIA Pula Fund
Related tags ESG Africa GSR Scoreboard