Senegal has announced plans to invest its sovereign wealth fund in neighbouring countries when it receives part of its oil and gas revenues from new fields.
The $25 billion economy, which is set to begin production next year, will set aside a minimum of 10% of the sector’s revenues to the Fund.
Finance Minister Amadou Hott says the country is betting on future oil and gas production to boost economic growth to 10% next year, with projections of high growth levels for a sustained period thereafter.
The law allows the Fund to invest up to 25% of the assets under management abroad. For now, we need to focus on the local market but once the fund reaches a critical size, we can invest in other markets, beginning with other West African economies with which we share the CFA franc currency.
Babacar Gning, Chief Investment Officer at the state-owned Sovereign Fund for Strategic Investments (Fonsis).
According to the IMF, reserves of more than 1 billion barrels of oil and 40,000 billion cubic feet of gas were found in Senegal between 2014 and 2017, most of them shared with Mauritania. These discoveries have, in the long run, prompted Senegal to be named as one of the region’s most promising new producers.
Part of that new income from the Fund will be added to Fonsis’ capital, which seeks to invest $500 million domestically by 2025
Fonsis has $650 million worth of assets under management, and launched a $106 million fund that targets small and medium-sized enterprises (SMEs) this year. It is now planning an infrastructure fund of an unspecified amount to reduce risk and make projects more attractive to private investors, .
The International Monetary Fund sees Senegal’s economy expanding 5% this year and 9.2% in 2023.
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