Working Paper 142 - Africa’s Quest for Development: Can Sovereign Wealth Funds Help?

This paper discusses the potential role that SWFs could play in African economies, both as recipient countries and home countries. We use new hand collected data to document the landscape of African SWFs as well as SWFs interventions on the continent. Our analysis shows that African SWFs are small, suffer from poor governance structures and are mainly focusing on stabilizing local economies. This suggests that their potential role as long term institutional investors to foster economic growth is likely to be limited if current practices are maintained. Conversely, foreign SWFs are increasingly interested in Africa and are poised to play a bigger role in supporting the continent’s growth if Africa uses the right strategies to attract their resources. Overall, the paper identifies opportunities that Africa offers for SWFs as well as challenges that need to be addressed in order to enhance SWFs role in supporting Africa’s development.