Africa and Sovereign Wealth Funds

Abstract

Africa’s economy has “benefited” from the substantial increases in commodity prices since 2009. While this trend undoubtedly has a positive effect on countries that export oil and other commodities, many further steps need to be taken before it can be affirmed that these increases really have a far-reaching and lasting impact on the economy. It was precisely a fall in commodity process that led to the region’s serious recession after the crisis. In order to escape this dependency, which is potentially very harmful to African economies as a whole, a crucial factor will be better distribution of the profits obtained from these natural resources, leading to economic diversification.

We analyze in this chapter the much unknown universe of African SWFs, their governance implications and reflect some failure cases including Libya, Equatorial Guinea or Chad. We provide a unique list of established and potential African funds. We also include an analysis of the main investments made by non-African SWFs in the continent.

Keywords: Sovereign wealth funds, Africa, governance

JEL Classification: 055, 016, E62, F23, F31, N57