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Harare Bureau
Africa has long been criticised as not having utilised its natural resources wealth well enough to ensure sustainable and positive change in its economies. Sovereign wealth funds are seen as one avenue of achieving this and the past decade has seen a historic rise in the number of these funds, as well as the size of assets under collective management.

However, given that so many resource-rich countries are still in need of economic development, it begs the question — how can sovereign wealth funds be better leveraged to establish economic stabilisation?

This is the topic that central bank governors from rapidly developing economies will discuss at a forum in Basel, Switzerland on June 27, 2015. The event will be officially opened by the Governor of the Reserve Bank of Zimbabwe, John Mangudya.

The governors attending the Forum will be mainly from the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) region. The MEFMI region is made up of 14 member countries — Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

The discussions at the MEFMI Region Governors’ Forum will be driven by research conducted by Investec’s Investment Institute and the Centre for International Development, as well as the Belfer Centre at Harvard University. The research focuses on the structures, policies and operations of sovereign wealth funds. There will also be a presentation from the World Bank Treasury on the role of central banks in sovereign wealth management.

The message from the resultant research reports is that all is not lost in terms of the momentum behind Africa’s emerging sovereign wealth funds, even following the lull in commodity prices. If African governments continue to sow the seeds of fiscal reform today, the benefits will be reaped when it matters — by the time the next resource boom arrives.

Importantly, by getting sovereign wealth funds to work more efficiently for an economy, it will ensure that these countries are better prepared for the inevitable slump that will follow.

“We’re delighted to be hosting our member countries as well as some visiting countries’ central bank governors to discuss this most important issue which will help to establish long-term prosperity on our continent,” says Caleb Fundanga, Executive Director of MEFMI.

“Africa’s resource wealth is a great asset to the continent, but it’s crucial that it’s best used to ensure long-term and sustainable economic wealth for these countries, even in times of commodity price weakness,” says Katherine Tweedie, Executive Director of the Investec Investment Institute.