Harnessing Africa's sovereign wealth :: Mmegi Online

Although African sovereign wealth funds have already shown their effectiveness, their potential remains largely untapped. By mobilising and leveraging national savings, these funds not only can increase governments’ capacity to finance public policies, but also can help to attract much-needed foreign capital. AKIM MOHAMED DAOUDA, UCHE ORJI & MAMADOU MBAYE* write

LIBREVILLE/ABUJA/DJIBOUTI: On May 18, African Heads of State, European leaders, and representatives of international institutions gathered in Paris for a summit on financing African economies. As heads of African sovereign wealth funds (SWFs), we strongly believe that mobilising national resources – and using them to attract additional foreign capital – is the only way to ensure our economies’ financial independence.

The COVID-19 pandemic has exposed the lingering vulnerabilities of African economies. They remain too sensitive to exchange-rate risk, unable to finance themselves, and too dependent on donors. In addition, adverse risk perceptions mean that most international investors and asset managers still have only a marginal presence on the continent.