What Role for Sovereign Wealth Funds in Africa’s Development?

This background paper commissioned as part of CGD’s Oil-to-Cash initiative, explores the role of Sovereign Wealth Funds (SWFs) as a mechanism to help resource rich countries manage revenue flows. The authors argue that the success of such funds is a function of good governance and a clear mandate, both of which are particularly challenging in low-income African countries discovering oil. The difficulty in protecting even the best-intentioned funds from falling prey to political pressures suggest that establishing a SWF is just one small step toward sound resource management in Africa.