Zambia plans to establish a sovereign wealth fund to spur investment outside the mining industry of Africa’s biggest copper producer, President Michael Sata said.
The fund will be set up through the Industrial Development Corp., which will oversee the southern African nation’s state-owned companies, Sata said in a statement Wednesday.
“The state will through the IDC maximize the value of government assets by establishing a sovereign wealth fund, which will focus on stimulating investment in strategic non-mining industries among others, thereby expanding the country’s investment portfolio and thus creating jobs,” Sata said.
Zambia is joining Africa’s largest oil producers, Nigeria and Angola, in establishing sovereign wealth funds. It will get funding from the dividends of about 40 state-owned companies, while the government will also provide some “seed capital,” said Zambian Commerce Minister Robert Sichinga.
“There is a need for a coordinating unit to help with the country’s industrial development,” Sichinga said. He couldn’t say how much the government will inject into the fund.
Neighboring Angola started a $5 billion sovereign wealth fund in 2012 to invest in agriculture, mining, infrastructure and real estate, plus cash, fixed income and equities. The Luanda-based fund, headed by the eldest son of President Jose Eduardo Dos Santos, will help diversify the economy away from oil, the government has said.
Another neighbor, Zimbabwe, is also planning a fund, which will be financed by mining royalties and special dividends on state mineral and metal sales, according to a draft of the Sovereign Wealth Fund of Zimbabwe Act.