Saleha Mohsin
NORWAY’S sovereign-wealth fund is pouring more of its cash into Africa to capture some of the fastest growth in the global economy.
The $890 billion (R11 trillion) fund, which is already in South Africa, was spreading its investments to the north and west of the continent in search of opportunities, Yngve Slyngstad, the chief executive of Norges Bank Investment Management, which manages the fund, said on Wednesday.
“What’s new is that we have crept north – Kenya and Nigeria. We’re looking at quite a few west African countries,” he said. “In North Africa, for quite some time, we’ve been invested in Morocco and Egypt, and there are also some investments coming in Tunisia.”
Africa is now one of the fastest-growing regions globally. And while the slump in oil hurt Nigeria and Angola, the International Monetary Fund still sees growth rates for sub-Saharan Africa that are twice those for developed nations. And the number of middle-class households in the region has tripled since 2010, according to Johannesburg-based Standard Bank Group.
The wealth fund is expanding into emerging and frontier markets as returns in the developed world are eroded by historic monetary easing programmes.
Slyngstad may also get the go-ahead next year to invest in infrastructure projects and to add more real estate to the fund’s swelling portfolio, as Norway looks into the merits of such a move. As the fund expands its geographical reach, it relies on local investment advisers to guide its decisions.
Last year, the wealth fund returned 7.6 percent, its smallest gain since it posted a loss in 2011. It raised its holdings in emerging markets to 10.6 percent, adding countries such as Ghana and Mauritius. The fund had also invested in Nigeria’s currency for the first time.
Meanwhile, its investments in Europe fell to 39.3 percent from 45.2 percent a year earlier. The fund’s holdings in North America rose to 38.9 percent of the total from 32.8 percent. Investments in Asia and Oceania climbed to 17.5 percent. – Bloomberg