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from MacroScope:

Frontier sovereign wealth funds

Macroscope has discussed the growth of sovereign wealth funds many times (see here or here). Just to recap, the global state-owned SWF industry is set to more than double in the next 10 years from the current $3 trillion, according to estimates from Deutsche Bank.

John Green, global head of business development at Anglo-African bank Investec, argues that Africa will play a key role in the expansion of SWFs in years to come.

"Africa is very rich in commodities. Africa in aggregate has gone from a significant fiscal deficit, largely funded by aid, to a continent that has a fiscal surplus. That's what has precipitated a lot of thinking around this issue," he says.

Green says he agrees with the view that in the next 5 years there will be enough surplus around in many African countries to begin to build future generation funds properly.