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Tuesday, 21 June 2022

Gulf sovereign funds are showing their African neighbors some love

Paving the way for more Gulf sovereign investment, here and across Africa? Three Gulf sovereign funds — Abu Dhabi’s ADQ and the Abu Dhabi Investment Authority, and the Kuwait Investment Authority — have inked an agreement to support investment in Africa with nine of the continent's sovereign funds, including the Sovereign Fund of Egypt (SFE), Reuters reported.

Who else took part? Sovereign funds in Morocco, Nigeria, Ghana, Gabon, Rwanda, Angola, Senegal, and Djibouti are also part of the agreement, which was signed at the first ever Africa Sovereign Investors Forum in Rabat.

African sovereign funds pull together: The forum “aims to bring together the 10 largest sovereign wealth funds in Africa to help address the challenges facing investment in the continent to finally unlock its massive potential,” SFE CEO Ayman Soliman told Enterprise. “As an example, we agreed to focus on logistics as a means of boosting cross African trade and flow of goods to help build robust supply chains for the continent,” he said. The forum also hopes to up coordination between African sovereign funds to mobilize capital and equity, and boost green projects, fund CEOs told Reuters.

The details of the Gulf agreement are TBD: We don’t yet know the ins and outs of the Emirati and Kuwaiti cooperation with the African funds — or the value of any attached investments.

Gulf funds have been giving us a lot of love lately: Earlier this year, ADQ invested USD 1.8 bn in five EGX-listed companies as part of plans to help our economy face down headwinds stirred up in part by war in Ukraine. And we wouldn't be surprised to see more sovereign Gulf capital flow our way soon, as the government pushes ahead with plans to raise USD 40 bn over the next four years by selling stakes in state-owned assets to local and international investors.

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