African Sovereign Funds Aim for Self-Reliance and Sustainability

Agaciro Development Fund is the Rwanda’s Sovereign Wealth Fund and it hosted the 2nd Annual Meeting of African Sovereign Investors Forum (#ASIF) at the Kigali Mariott Hotel from 6 to 7 July 2023. The theme of the conference is: “Strategic Partnerships: Driving Africa’s Resilience and Sustainable Development.”

The event highlighted investment opportunities and challenges with a view to foster collaboration in order to deliver upon the UN #SDG. It is worth noting that 2023 will mark the 10th year anniversary of the establishment of Agaciro Development Fund.

Presently, there are at least 30 Sovereign Wealth Funds in Africa with a collective valuation of USD 100 billion. The #ASIF aims to explore synergies between various stakeholders, especially between institutional and private investors to contribute to Africa’s sustainable and inclusive development.

We need to discuss strategies to enhance the competitiveness of Africa’s investment landscape and strengthen our economies’ capacity to effectively address the current challenges we face.

Rwandan Minister of Public Investments and Privatization Eric Rwigamba

As a sign of the increasing attractivity of Africa as an investment destination, the #FDI flows into Africa surged from USD 39 billion in 2020 to USD 83 billion in 2021. However, on the trade side, Africa’s share of global trade is still rather low at only 16%. The largest trading blocs of Africa are Europe, Asia and America in descending order.

Rwanda Minister of Public Investments and Privatization Eric Rwigamba believes the trade potential is largely untapped due to a number of structural issues that need to be addressed. Some of the challenges include poor infrastructure, excessive reliance on export of natural resources, low level of industrialization and local value addition (#LVA).

The focus should not solely be on investor interests or capital availability. Instead, it should revolve around creating favorable conditions and projects that encourage investors to commit capital.

ASIF Chairperson Obaid Amrane

It is to be recalled that it was in 2020 that eleven National Sovereign Wealth Funds (#NSWF) in Africa came together to create the #ASIF. Now in 2023, two new NSWF have officially joined the ASIF, namely the Ethiopian Investment Holdings and the Mauritius Investment Corporation. The reinforcement of the ASIF is a strong positive signal because one cannot expect outsiders to have confidence in Africa when Africans are not themselves willing to bet on Africa.

In a bid to address common pressing issues, the various working groups have come up with a number of priority areas for investment such as #ClimateChange, #FoodSecurity and #DigitalDivide. In preparation for #COP28, ASIF aims to mobilize at least USD 500 million initially. Aware that this amount is far from adequate, the ASIF will strive to create the conditions so that private capital can partake in Africa’s growth story and help to move Africa closer towards the #SDG.