Guinea To Establish Sovereign Wealth Fund (SWF)
Guinea is set to join a growing list of African countries, establishing a Sovereign Wealth Fund (SWF).
Why does this matter: Guinea is home to some of the world's largest and highest-grade iron ore reserves. As the government works to monetise these resources, it plans to invest the proceeds into a sovereign wealth fund for better management.
Establishing SWFs is a growing trend as African nations shift towards more sustainable and responsible management of their natural resources.
While presenting a unique opportunity for Guinea and these other African nations, the key is to ensure that concrete investment structures grounded in sound governance that ensures transparency and accountability for current and future generations.
If managed well, these SWFs can pursue ethically focused investments and play an active role in the urgent need for patient capital, particularly in financing infrastructure and energy transition projects both in the home state and across Africa.
The bottom line: These African SWFs should learn from the playbooks of some of the largest SWFs, like the Norway Government Pension Fund Global and the Abu Dhabi Investment Authority. These institutions provide templates for achieving greater portfolio diversification to enhance returns on investment for the state while making substantial contributions to economic growth and supporting vital infrastructure, social programs, and other essential services.
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