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Sovereign Wealth Funds and Infrastructure Development in Africa

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  • Seedwell Hove

    (Quantum Global Research Lab)

Abstract

Sovereign wealth funds (SWFs) are increasingly becoming major sources of finance in many African countries. This paper analyses the potential role that SWFs could play in financing infrastructure development in Africa. The paper documents the state of infrastructure and its financing needs in Africa, dissects the anatomy of sovereign wealth funds on the continent, and assesses the extent to which sovereign wealth funds can bridge the infrastructure financing gap. The analysis shows that Africa?s infrastructure needs new sources of finance to cover the existing financing requirements. Although African SWFs are still small compared to those in other countries of the world, they have the potential to contribute meaningfully towards financing infrastructure development and fostering economic development in Africa. Putting in place favorable conditions for business and ensuring stable political and governance conditions can also attract global sovereign wealth funds to invest their massive resources in Africa. The paper also highlights some risks and opportunities for infrastructure investments on the continent.

Suggested Citation

  • Seedwell Hove, 2016. "Sovereign Wealth Funds and Infrastructure Development in Africa," Proceedings of Economics and Finance Conferences 4206708, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:4206708
    as

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    References listed on IDEAS

    as
    1. César Calderón & Luis Servén, 2010. "Infrastructure and Economic Development in Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies, vol. 19(suppl_1), pages 13-87.
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    Cited by:

    1. Nawo, Larissa & Njangang, Henri, 2018. "Co-investments and African infrastructure deficit: Understanding and mitigating political risks in Conflicts Affected and Fragile States," MPRA Paper 90295, University Library of Munich, Germany.
    2. Kappel, Robert & Pfeiffer, Birte & Reisen, Helmut, 2017. "Compact with Africa: fostering private long-term investment in Africa," IDOS Discussion Papers 13/2017, German Institute of Development and Sustainability (IDOS).
    3. Noah Afees O. & David Olalekan O., 2024. "Infrastructure Development And External Financing Nexus In Sub-Saharan Africa: Panel Vecm Analysis," Folia Oeconomica Stetinensia, Sciendo, vol. 24(2), pages 229-251.

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    More about this item

    Keywords

    Sovereign wealth funds; Infrastructure development; asset allocation;
    All these keywords.

    JEL classification:

    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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