France’s Strategy for Gulf Investments
To attract foreign direct investment (FDI) from Gulf sovereign wealth funds, France has created a dedicated ambassador position. This initiative aims to foster partnerships with major players like the Kuwait Investment Authority, Saudi Public Investment Fund (PIF), Qatar Investment Authority (QIA), and Abu Dhabi Investment Authority (ADIA).
Africa’s Private Wealth
A report by UK consultancy Henley & Partners reveals that 56% of Africa’s private wealth, totaling $2.1 trillion, is concentrated in five countries:
- South Africa: $651 billion
- Egypt: $307 billion
- Nigeria: $228 billion
- Morocco: $125 billion
- Kenya: $91 billion
Private wealth in Africa is expected to grow by 38% over the next decade, with Eastern Africa leading the way:
- Uganda and Rwanda: 60% growth forecast
- Kenya and Zambia: Over 50% growth expected
Despite these impressive figures, 25% of Africa’s population faces starvation, highlighting the urgent need to address income inequality, corruption, and lack of opportunities.
Highlights of Sovereign Wealth Funds
- Kuwait Public Institution for Social Security (PIFSS): In 2021, the fund achieved an impressive 35.9% return, prompting its director, Mr. Meshal Alothman, to resign in recognition of his success.
- Qatar Investment Authority (QIA): The QIA invested €250 million in Innovafeed, a French company specializing in sustainable protein for animal and human nutrition.
- Africa Sovereign Investors Forum (ASIF): Funds from Egypt, Morocco, Angola, and other African nations signed an agreement in Rabat, Morocco, to increase investment cooperation across the continent. Libya was notably absent.
The Sovereign Fund of Egypt (TSFE)
Facing $316 billion in debt, Egypt is leveraging its sovereign wealth fund to attract Gulf investments. Notable developments include:
- Saudi PIF: $1.3 billion investment in four Egyptian companies
- Abu Dhabi ADQ: $2 billion invested in fertilizer companies and real estate developer SODIC
The government aims to raise $10 billion in four years by listing state-owned companies on the Egyptian Exchange (EGX).
Saudi Public Investment Fund (PIF)
The PIF continues its aggressive expansion:
- Opened a New York office, complementing its London and Hong Kong locations
- Committed $30 billion to the U.S. market, with more investments planned
- Issued the first green bonds to fund environmentally focused projects, raising over $3 billion at the London Stock Exchange
Despite skepticism over its $300 billion NEOM project, the fund’s ambitious initiatives align with Saudi Vision 2030.
Qatar Investment Authority (QIA)
QIA announced plans to invest $3 billion in Pakistan, targeting renewable energy and hospitality sectors. In Egypt, it pledged $5–$20 billion in partnership with the TSFE to invest in publicly listed companies.
Ethiopia’s Emerging Sovereign Wealth Fund
Ethiopian Investment Holdings (EIH), one of the world’s newest sovereign wealth funds, manages 27 companies valued at $38.5 billion. The fund contributes 10% of Ethiopia’s GDP and plans to increase revenue from $7 billion to $10.4 billion.
Final Thoughts
The dynamism of sovereign wealth funds in the Middle East and Africa underscores their growing influence on global markets. However, as these funds expand, balancing ambitious goals with sustainable practices and equitable economic development will be critical for long-term success.
Omar Khattaly
Researcher on Sovereign Wealth Funds and the Political Economy of the Middle East & Africa
