Angola on Wednesday launched a $5 billion sovereign wealth fund to invest in domestic and overseas assets by funnelling its vast oil wealth into infrastructure, hotels and other high-growth projects.
Angola is Africa’s second-largest crude oil producer and is looking to diversify its oil-dependent economy by developing infrastructure outside the energy industry.
The Angolan Sovereign Fund (FSA), which will also invest in financial securities, will be headed by President Jose Eduardo Dos Santos’ economic affairs secretary, the fund’s board said in a statement.
The fund said its first investments will be in projects to develop agriculture, water, power generation and transport, with an early focus on the hotel industry in sub-Saharan Africa.
Oil revenues represent over 95 percent of Angola’s export income and around 45 percent of gross domestic product. After years of double-digit growth, Angola’s economy suffered a rapid slow down after oil prices tumbled in 2008.
GDP, which the World Bank estimated at $101 billion last year, is set to grow between 8 and 10 percent this year thanks to higher oil prices and output.
The FSA board said it will be assisted by a council composed of senior ministers and the central bank governor, and will publish accounts annually and have them audited by an international audit firm.
“The transparency of the fund will be guaranteed by our strict reporting and auditing rules and an investment policy to be announced soon,” Filomeno dos Santos said.
Filomeno dos Santos also revealed that the fund was not a stabilisation tool in the event of an oil price shock, but was aimed at diversifying the economy and creating wealth.
It will grow from further oil revenues transferred by the government and from returns on its investment projects, he added, although he declined to estimate the fund’s growth.