African Wealth Funds Experience Boon After Investing Locally
During this pandemic, sovereign wealth funds in Africa that have focused on their local economies have yielded high returns.
This is according to a report published by the International Forum of Sovereign Wealth and Franklin Templeton, which found that the pandemic increased demand across local industries in African countries from farming to pharmaceuticals. The report was titled “Investing for Growth and Prosperity: In Africa, sovereign wealth funds focus on G, S and E”. According to the report “The demands of the pandemic stimulated domestic industries in which they were already invested, such as health care, agribusiness, and digital technology because their products were in high demand in 2020.” The report stated that wealth funds from countries like Angola, Botswana, Ghana, and Nigeria stepped in to finance public spending. Some considered greater allocations to emerging markets like China to boost returns at a time of very low-interest rates. The study that led to the report consisted of interviews with officials from institutions operating either as wealth funds or planning a wealth fund. It included a survey of eight of Africa’s established sovereign wealth funds. “The sovereign wealth funds of Africa are at the forefront of a new breed of state-owned investors that are looking to attract capital into their home economies to accelerate economic development, rather than deploy capital into global financial markets,” the report said. The report noted that Africa’s sovereign wealth funds are taking similar approaches to address challenges in the key areas of:
- Social Impact; and