Ghana ranks third in Sovereign Wealth Fund index

Ghana ranks third in Sovereign Wealth Fund index
Source: Ghana | Philip Nanfuri | JoyBusiness
Date: 05-06-2018 Time: 12:06:40:pm

Ghana ranked third in the first edition of the African Sovereign Wealth Fund Index polling 62 out of 100 %. Nigeria and Rwanda scored 62.49 % and 62.24 % respectively.

Ghana beat countries such as Angola, with 56.57%, Morocco 38.92% and Gabon 47.17%. 

The index measures the size and other variables of sovereign wealth funds in Africa and was launched in Accra by the Konfidants Advisory Group during the Africa Sovereign Wealth Fund Summit.

The Report

The index chronicles the size of the existing 12 Sovereign Wealth Funds (SWFs) on the African continent. The total assets of these SWFs, according to the report stands at about $89 billion.

The indicators of the index are; governance and disclosure, size, domestic investment mandate and source of funding.

With regards to governance and disclosure, the index measures this by assessing the soundness of governance structure of the fund as well as public financial disclosure of the fund. So, it simply seeks to establish how transparent and accountable African sovereign wealth funds are.

Ghana’s Sovereign Wealth Funds

Ghana’s sovereign wealth funds; the Ghana petroleum funds was established in 2011 to target stabilization, infrastructure and future generations. 

Currently, Ghana’s sovereign wealth fund has a size of about GHC 875 million.

The country has the Ghana Stabilization Fund (GSF) for purposes of stabilization of the economy if there is a dip in oil revenue, meaning funds accumulated from the sale oil are used to cushion our economy during periods of economic slowdown. 

Ghana also has the Ghana Heritage Fund (GHF) for the purposes of saving for future generation. The Ghana Infrastructure Investment Fund (GIIF) also targets key areas for infrastructural development.

Speaking to JoyBusiness on the sidelines of the event, the Managing Partner of the Konfidants Advisory Group, Michael Kottoh, authors of the report, described Ghana’s sovereign wealth funds as fairly young in comparison to other parts of the world, however more must be done to grow the size of SWFs such as tapping into other areas and reducing overreliance on sources of funding such as oil revenue or in broader terms earnings from export or sale of commodities.

Sovereign Wealth Funds

A sovereign wealth fund refers to a state-owned investment fund used for purposes of stabilization of the economy, for infrastructural development and for savings for future generations of the country.

 

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