Sovereign Wealth Funds and Natural Resource Management in Africa
Samuel Wills (),
Lemma W. Senbet and
Journal of African Economies, 2016, vol. 25, issue suppl_2, ii3-ii19
Non-renewable resources dominate nearly one quarter of the world's economies. Over half of these economies are developing, with many in Africa. Managing resource revenues is one of the most pressing challenges facing policymakers in Africa. For over a decade, these countries have been advised to follow ‘the Norwegian model’, saving resource revenues abroad, in offshore sovereign wealth funds for future generations. The three papers in this issue challenge that view. Together, they argue that there are three key motives for saving revenues abroad: intergenerational transfer, parking and stabilisation. The paper by Venables and Wills shows that only the second two are relevant for developing countries, which have pressing needs at home, arguing that revenues should be directed toward domestic investment to accelerate the countries along their development path. There are, however, other potential motives for investing resource rents offshore, in addition to intergenerational transfer, parking and stabilisation. These include political accountability, portfolio diversification of investment returns and Dutch disease considerations. Investment of resource rents in the domestic economy should be focused on projects with high social and financial returns, and is best achieved by collaboration between informed development banks and arms-length institutional investors.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:jafrec:v:25:y:2016:i:suppl_2:p:ii3-ii19.
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of African Economies is currently edited by Marcel Fafchamps
More articles in Journal of African Economies from Centre for the Study of African Economies (CSAE) Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ( this e-mail address is bad, please contact ) and Christopher F. Baum ().