Business
$5 billion sovereign wealth fund set up in Angola
Angola on Wednesday launched a US$5 billion sovereign wealth fund to invest in domestic and overseas assets by funnelling its vast oil wealth into infrastructure and other high-growth projects.
Africa’s second-largest crude oil producer is looking to diversify its oil-dependent economy by developing infrastructure outside the energy industry. The country which was devastated by a 27-year civil war that ended a decade ago, has one on fastest growing economies in Africa.
Nigeria, the continent’s top oil producer, has already set up a similar US$1 billion fund.
“The Nigerian fund is mainly for liquid, low-yield assets, while the Angola fund’s mandate is broader, with investment in the real economy domestically.
The Angola Sovereign Fund (FSA), which will also invest in financial securities.
The fund said its first investments will be in projects to develop agriculture, water, power generation and transport, with an early focus on the hotel industry in sub-Saharan Africa.
Until now the southwest African country was one of the few organization of Organization of the Petroleum Exporting Countries (OPEC) member states without a sovereign wealth fund.
Oil revenues represent over 95 percent of Angola’s export income and around 45 percent of gross domestic product. After years of double-digit growth, Angola’s economy suffered a slow down after oil prices tumbled in 2008.
Gross domestic product (GDP), which the World Bank estimated at US$101 billion last year, is set to grow between 8 and 10 percent this year thanks to higher oil prices and output.
The fund will grow from further oil revenues transferred by the government and from returns on its investment projects, he added, although he declined to estimate the fund’s growth.
The FSA board said it will be assisted by a council composed of senior ministers and the central bank governor, and will publish accounts annually and have them audited by an international audit firm.
It was not immediately clear when the investment policy would be announced, or if it would be enough to assuage concerns about governance.