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African SWFs can enhance productivity and spur intra-African investment through allocating part of their assets to growing sectors in Africa.

For instance, the newly launched Angolan SWF is designed to target investments in Sub-Saharan Africa primarily in infrastructure and hospitality sectors. Other Sub-Saharan African sectors targeted by the Angolan Fund include agriculture, water, power generation and transport.

Thus, African SWFs may benefit from the growth potential of African countries which offer significant afrivan creation opportunities.

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Fostering the role of the private sector: The SWFs are generally oriented towards investments in global financial markets rather than in emerging or developing countries. The SWFs in Africa may position themselves beyond the objective of macroeconomic stabilization and focus on maximization of investments and returns especially in domestic assets.

Moreover, SWFs can indirectly foster the private sector by supporting sound fiscal and monetary policies. This can prompt a fiscal-friendly environment for private sector companies.

African SWFs are encountering many challenges that slow their expansion. Governance, especially lack of transparency and accountability are the most important issues facing SWFs in Africa.

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In Nigeria for instance, lack of transparency has led to constant political wrangling between federal governments and states. Over the long term, lack of transparency and accountability, and weak institutions could lead to risk of expropriation and corruption.

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African SWFs are also facing internal risk management issues including operational and financial risks which tend to be high for new organizations in developing countries. Championing inclusive growth across Africa.

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