In order to restore the economies of the continent after the COVID-19 epidemic, Chinelo Anohu, Senior Director at the African Development Bank (AfDB), has urged for stronger strategic alliances and increased participation from African sovereign wealth funds.
Anohu made the decision while delivering the keynote talk at the most recent third high-level gathering of African sovereign wealth funds organized by Brown Capital Management Forum.
15 of the top 17 countries with the greatest sovereign wealth funds (SWFs) export a significant amount of oil and gas; however, Nigeria is the only nation with negligible savings. Despite rising oil prices, Nigeria can only claim to have $3 billion in the Nigeria Sovereign Investment Authority (NSIA).
Norway, which exports 1.2million barrels of oil each day, has almost $1.3 trillion in reserves in her Government Pension Fund Global commonly known as the ‘Oil Fund’. Each of Saudi Arabia and the UAE has approximately $1 trillion in savings. Kuwait has $738 billion in rainy-day reserves, Qatar $450 billion, Russia $191 billion, Kazakhstan $133 billion, Iran $91 billion, Libya $66 billion, Brunel $60 billion, and Azerbaijan $42 billion, according to the Global Sovereign Wealth Fund.
The Africa Investment Forum is the continent’s top marketplace for investments, helping to speed up deals that narrow investment gaps in Africa.
The two-day conference, themed Strengthening the Role of African Sovereign Wealth Funds in the International Financial System, was held at the Wilson Centre in Washington, DC. Since its inception in 2015, the Brown Capital Management Africa Forum has provided a forum for American and African corporate executives, decision-makers, and specialists to exchange ideas on furthering sustainable development and business ties.
Anohu claimed that in just two years, the Coronavirus outbreak had erased 20 years’ worth of advancements. 40 million Africans, primarily women and children, have been forced into extreme poverty as a result of the pandemic’s exposure of structural flaws in the continent’s physical and social infrastructure, she claimed.
The pandemic’s impacts have worsened as a result of Russia’s war in Ukraine. Prices for food and fuel have increased as a result of the war. Anohu emphasized that at least $1.2 billion in annual expenditures in crucial infrastructure are necessary for Africa’s recovery. Africa cannot afford to be left behind or caught in the thick of geopolitical rivalries, she said.
President of the Wilson Center Mark Green and Chairman of Brown Capital Management Eddie Brown also spoke at the occasion. The discussion, according to Dr. Monde Muyangwa, director of the Wilson Center’s Africa Program, “could not be more timely.”
Following her approval by the US Senate to serve as President Biden’s Administrator for Africa at the United States Agency for International Development, Muyangwa’s employment at the Wilson Center has come to an end. At the closing ceremony, she received recognition for her accomplishments at the Center.
Mark Green stated that now is a key time for everyone to reflect on these difficulties as well as how to seize possibilities that will help us overcome them. What role can sovereign wealth funds play in stabilizing economies and fostering the robust economic growth that is so essential to the future of the continent? How can they also adapt to these changing times?
The world is changing quickly, and governments and financial systems must adjust immediately, according to Eddie Brown. He asserted that sovereign wealth funds ought to be central to the discussion on how to deal with these problems. The Wilson Center African program recognized the crucial role that sovereign wealth funds play in transforming Africa’s economic development as soon as it was established, but these institutions were not well-known.
Anohu made the observation in her keynote speech, noting that in reaction to the pandemic’s effects, Africa’s sovereign wealth funds invested around $12.7 billion overall in 2020—three times as much as in 2019. She emphasized that they are still perceived as missing the resources necessary to locate and assess worthwhile investment opportunities.
Anohu stressed, inviting meeting attendees to the Africa Investment Forum’s 2022 Market Days in November, “This is a vacuum that the Africa Investment Forum is ready to fill.” She clarified that an expanded role for African sovereign wealth funds was necessary to finance Africa’s ambitious economic goal.