IMF’s Sovereign Fund Warning Puts Africa’s Development Plans Under Scrutiny

Africa’s 24 sovereign wealth funds held approximately $111 billion in assets across 20 countries in 2025, according to the African Development Bank’s 2026 African Economic Outlook.

Their combined assets have fallen from $174 billion in 2013, leaving the continent with roughly 1% of global sovereign wealth. Governments are increasingly looking to these institutions to finance infrastructure, energy and industrial development, despite the limited capital available across many of them.

Nigeria’s Sovereign Investment Authority (NSIA) has already deployed part of its resources into domestic projects. By 2025, its Infrastructure Fund had invested more than $402 million in technology and healthcare.

Its portfolio of 15 infrastructure projects had attracted more than $1 billion in additional investment from third parties. The figures demonstrate the potential for sovereign funds to bring other investors into projects rather than carry the entire financing burden themselves.

Expanding domestic investment also raises questions about government control over public wealth. At the November 11 meeting of the International Forum of Sovereign Wealth Funds in Athens, IMF First Deputy Managing Director Dan Katz warned that governments expanding sovereign fund mandates into development and strategic investments must strengthen legal safeguards.

He cautioned that direct project financing could bypass legislative budget scrutiny, weaken commercial discipline and expose public savings to political interference.

The implications for African funds differ according to their financial resources and legal mandates. Nigeria has a dedicated infrastructure investment window, while Botswana’s Pula Fund operates within a different reserve-management structure. Kenya’s newly established framework also introduces separate provisions for stabilisation, infrastructure and future-generation investments.

African governments therefore face a financing decision: how much sovereign wealth can be committed to domestic development without undermining the savings and financial protection these institutions are supposed to provide? The answer will determine whether sovereign funds can attract additional investment into African infrastructure and industry while preserving the wealth entrusted to them.

Nigeria’s Sovereign Fund Shows How Development Capital Is Deployed

Nigeria’s Sovereign Investment Authority (NSIA) reported total assets of $3.42 billion at the end of 2025. Approximately $1.40 billion belonged to its Nigeria Infrastructure Fund (NIF), which finances domestic projects.

The Stabilisation Fund and Future Generations Fund account for the remaining assets and operate under separate investment mandates. The distinction limits the capital available for infrastructure spending and prevents the authority’s entire balance sheet from being treated as an investment pool for domestic projects.

The NIF returned 14.55% in 2025, against a policy target of 6.03%, measured as US inflation plus three percentage points. Its mandate covers infrastructure investments in energy, healthcare, agriculture, transport, technology and industrial production. These investments must meet financial return requirements alongside their development objectives.

Healthcare is one of the fund’s established investment areas. NSIA reported more than $202 million in investments supporting cancer treatment and diagnostic facilities across Nigeria.

Its programme includes oncology, diagnostic and cardiac catheterisation centres developed through partnerships with state governments and federal teaching hospitals.

Healthcare infrastructure operating revenue reached $5.54 million in 2025, up from $3.96 million a year earlier. These revenues provide an indication of commercial activity, although they do not establish the overall return on the healthcare investment.

The authority is also involved in a proposed $1.4 billion ammonia plant in Akwa Ibom State, being developed with Morocco’s OCP Group. The project is intended to increase domestic fertiliser production.

The $1.4 billion represents the proposed project value, not an amount already invested by NSIA. In technology, the authority established a $200 million innovation fund for Nigerian businesses, while its agriculture investments include a ₦10 billion local-currency fund.

NSIA’s participation in infrastructure financing also extends beyond direct project investment. It established InfraCredit as a subsidiary to provide local-currency guarantees for infrastructure bonds.

The African Finance Corporation, InfraCo Africa, Leadway Assurance and AIICO Insurance subsequently joined its ownership structure. NSIA held a 35.8% interest at the end of 2024. The guarantee model allows infrastructure borrowers to attract financing from investors who might otherwise be unwilling to take the full credit risk.

The AfDB reported that NSIA’s domestic investments in technology and healthcare exceeded $402 million by 2025. Across 15 infrastructure projects, the authority had also attracted more than $1 billion in third-party investment.

The latter figure represents additional financing mobilised across the portfolio, not NSIA’s own contribution. The distinction matters when assessing how much public capital is required to bring other investors into Nigerian projects.

Further domestic investment will depend on the resources available within the NIF, the performance of existing projects and the authority’s ability to secure additional financing.

Its $3.42 billion in total assets cannot be committed indiscriminately: the Stabilisation Fund and Future Generations Fund have separate responsibilities, while existing infrastructure investments already account for part of the NIF’s resources.

NSIA has demonstrated that a designated portion of sovereign wealth can finance Nigerian businesses and infrastructure while attracting additional investors. The challenge is expanding those commitments without compromising the returns and financial reserves that sustain the authority’s other mandates.

African Sovereign Funds Face Different Investment Constraints

Angola’s Fundo Soberano de Angola (FSDEA) reported $4.72 billion in assets at the end of 2025, an increase of 18% from the previous year. Net profit reached $527 million, compared with $176 million in 2024.

Its liquid investment portfolio returned 14.65%, while alternative investments generated a reported 42% return. The fund maintains international financial investments alongside holdings in agriculture, mining, hospitality and healthcare.

Its investment portfolio stood at approximately $3.15 billion, including $2.13 billion in liquid assets. Alternative investments account for the remaining portfolio, with exposure to businesses and projects that cannot readily be converted into cash.

Government withdrawals have previously reduced the fund’s resources, including reported transfers of $1 billion in 2019 and $1.5 billion in 2020. The latest financial results do not disclose a specific amount reserved for new domestic infrastructure investments.

Botswana’s Pula Fund is managed by the Bank of Botswana as part of the country’s foreign-exchange reserves. Its assets declined from approximately P37.4 billion at the end of 2024 to P27.9 billion in December 2025, despite a reported investment return of 14.3%.

The fund invests reserves exceeding the country’s medium-term requirements, making reserve adequacy an important consideration in determining how much can be retained for long-term investment.

Government access to these resources is administered through the Government Investment Account at the central bank. The IMF distinguishes the government’s deposit balance from the foreign assets held in the Pula Fund.

Withdrawals are subject to the government’s available share and the rules governing foreign-exchange reserve management. Botswana therefore cannot direct the Pula Fund into domestic infrastructure projects in the same manner as an institution with a dedicated development investment mandate.

Kenya’s 2026 Sovereign Wealth Fund Bill proposes three components covering stabilisation, strategic infrastructure investment and future generations. The proposed infrastructure component includes agriculture, transport, housing, energy, water, education and healthcare.

Its financing arrangements would require statutory investment and withdrawal procedures. However, the legislative material does not establish that initial capital has been transferred, investment managers appointed or projects financed under the proposed structure.

A separate National Infrastructure Fund law enacted in March 2026 provides for financing from pension funds, collective investment schemes, sovereign investors and climate-finance institutions. This vehicle is distinct from the proposed sovereign wealth fund. Its legal establishment does not demonstrate that Kenya has accumulated sovereign savings available for direct infrastructure investment.

The African Development Bank’s 2026 assessment identified limited fund sizes, shallow domestic capital markets and shortages of commercially viable projects among the constraints affecting African sovereign investors.

Currency exposure and liquidity requirements further restrict domestic allocations, particularly where infrastructure projects generate local-currency revenue but financing or investment obligations are denominated in foreign currencies.

Angola has an established investment portfolio with domestic commercial exposure, although its disclosed asset value does not identify how much remains available for new commitments.

Botswana’s reserve-management framework places different restrictions on government access, while Kenya has yet to demonstrate the capitalisation and operation of its proposed sovereign wealth structure.

For African governments, the capacity to finance development depends on the assets that can legally be invested, the financial obligations already attached to those resources and the ability of domestic projects to generate commercial returns.

Sovereign wealth held for stabilisation or future generations cannot be counted as infrastructure financing merely because governments face additional spending requirements.

Sovereign Fund Partnerships Could Finance More African Infrastructure

Ghana’s Minerals Income Investment Fund (MIIF) completed a $5 million equity investment in Atlantic Lithium in January 2024, securing a minority shareholding in the company developing the Ewoyaa lithium project.

The purchase formed part of a proposed $32.9 million investment package, including $27.9 million for a 6% interest in the company’s Ghanaian mineral assets. The larger investment remained subject to completion, leaving the initial share purchase as MIIF’s confirmed financial contribution.

Ewoyaa’s development arrangements changed in October 2026 when China’s Zhejiang Huayou Cobalt acquired Elevra Lithium’s project rights and obligations.

Huayou assumed responsibility for the outstanding portion of an initial $70 million development-funding commitment under the joint venture agreement.

The project had not entered commercial production, and MIIF’s investment had yet to produce disclosed operating returns. Its eventual financial performance will depend on the mine’s development, production costs and lithium market conditions.

The Ghana Infrastructure Investment Fund (GIIF) has pursued debt financing for transport and energy infrastructure. Its disclosed commitments include a $30 million facility for Ghana Airports Company to support airport development and approximately $42 million for a multiproduct oil jetty at Takoradi.

These facilities identify the public lender, borrowers and financing amounts, although the available disclosures do not establish how much additional private investment each transaction attracted.

The African Development Bank signed a declaration of intent with the African Sovereign Investors Forum in June 2026 to develop investment platforms for infrastructure projects.

The forum represents 17 African sovereign investors, including Morocco’s Ithmar Capital. Energy infrastructure and regional transport corridors are among the proposed investment areas.

The agreement did not announce binding financial commitments to individual projects, leaving the amount of additional capital available through the partnership undetermined.

Financing remains difficult for projects without reliable revenue arrangements or completed preparation work. UN Trade and Development has identified limited investment-ready infrastructure opportunities, underdeveloped capital markets and foreign-exchange exposure among the obstacles facing African sovereign investors.

Electricity and transport projects requiring long-term financing are particularly exposed when their revenues are collected in local currencies while repayment obligations are denominated in foreign currencies.

Commercial participation depends on how these risks are allocated. Development banks can provide longer-term loans or guarantees, while sovereign funds may participate through equity or project-specific financing vehicles.

Private investors still require credible revenue forecasts, enforceable contracts and a clear allocation of construction and operating risks. Without these conditions, additional sovereign commitments could increase public exposure without securing the private financing needed to complete projects.

The IMF’s November 11 warning raises a separate question about the authority governments exercise over these investments. Independent investment committees, commercial return benchmarks and published financial statements can help establish whether a transaction meets a fund’s statutory mandate.

Government-directed projects that receive financing without commercial justification create risks that should be disclosed through public accounts rather than absorbed without explanation into sovereign investment portfolios.

Ghana’s confirmed equity and debt commitments show where public investment institutions have already placed capital. The AfDB’s proposed partnership with African sovereign investors has yet to establish a comparable record of completed financing.

Its next test will be whether individual projects secure binding commitments from development banks and private investors, reach financial close and establish revenue arrangements capable of supporting long-term investment.

African sovereign funds can attract additional infrastructure financing where their participation is commercially justified and independently approved.

The amount mobilised will depend on completed transactions and enforceable investment commitments, rather than the value of projects announced or the number of institutions entering cooperation agreements.

African Governments Face New Sovereign Fund Financing Decisions

Nigeria’s Sovereign Investment Authority (NSIA) has further infrastructure investments to finance, including its proposed $1.4 billion ammonia project with Morocco’s OCP Group.

The project’s development value does not establish how much NSIA will contribute. Its next financial statements should clarify new commitments, returns from existing investments and the additional capital secured from external investors.

Angola’s Fundo Soberano de Angola faces decisions over domestic investment allocations following its reported $527 million profit in 2025. Any expansion into agriculture, mining or industrial projects will need to account for existing portfolio obligations and liquidity requirements.

The fund’s next disclosures will establish whether stronger financial performance has translated into additional domestic investments or changes in its international holdings.

Kenya has yet to demonstrate that its proposed sovereign wealth fund framework has received capital for investment. The appointment of management structures, adoption of operating rules and transfer of initial resources remain important implementation milestones.

Its separate National Infrastructure Fund also requires identifiable financing commitments before announced infrastructure plans can be counted as funded projects.

Ghana’s Minerals Income Investment Fund has an outstanding proposed investment associated with the Ewoyaa lithium project, whose development arrangements changed following Zhejiang Huayou Cobalt’s involvement in October. The remaining investment terms and the project’s financing status will determine whether MIIF increases its exposure.

The African Development Bank’s agreement with the African Sovereign Investors Forum likewise requires individual projects and binding financial commitments before its contribution to infrastructure financing can be measured.

Norway’s Government Pension Fund Global offers a governance reference rather than a financing model African governments must adopt. It invests internationally, with government transfers governed by fiscal arrangements intended to protect national savings.

African institutions authorised to invest domestically face additional decisions over project approvals, commercial returns and the treatment of losses when investments serve government development priorities.

The amount African sovereign funds can contribute to development will depend on their legally available capital and the returns their investments generate.

New projects will require financing commitments that can withstand commercial scrutiny, with public accounts identifying the costs and risks retained by the state. Governments that use sovereign assets without these protections risk reducing the savings intended to support future generations.