How Sovereign Wealth Funds Could Supercharge Africa’s Future
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Africa doesn’t lack ideas, ambition, or opportunity. What it lacks is capital that sticks around for the long haul, the kind that funds roads, hospitals, green energy, and industries of the future. That was the bold message from Dr David Masondo, South Africa’s Deputy Minister of Finance, during his keynote speech at the G20 Social Summit Side Event held on 17 November 2025.
The focus of the event? How Africa can use Sovereign Wealth Funds (SWFs) to boost infrastructure, green industry, and social investments, and why this matters more than ever.
The Development Dilemma
Africa faces a major problem: its infrastructure funding gap is widening. To meet development goals, countries need to spend about 7.1% of GDP on infrastructure. Right now, most are only spending 3.5%. That’s a shortfall of up to $170 billion per year, and only $80 billion is actually available. And with aid funding dropping, tax bases shrinking, and growth slowing, it’s clear that traditional funding methods alone won’t cut it.
Enter Sovereign Wealth Funds (SWFs)
Globally, SWFs are booming. These government-owned investment funds now hold over $13 trillion in assets. But here’s the shocker: Africa’s SWFs make up just 0.24% of that total. Yet despite their small size, Dr Masondo says African SWFs could be game-changers, if used right.
What SWFs Can Do for Africa
Well-designed, transparent SWFs could:
Stabilise economies against shocks like falling commodity prices
Fund long-term infrastructure projects like schools, roads, and hospitals
Support green industries like solar, wind, hydrogen and sustainable farming
Attract foreign investment and crowd in private capital
Back industrialisation that creates jobs and builds wealth.
These funds can also help transfer wealth to future generations, and ensure public money is working for the people.
Good Examples Are Already Out There
Dr Masondo pointed to several African countries already moving in the right direction:
Morocco’s Green Growth Infrastructure Facility
Senegal’s FONSIS
Nigeria and Angola, both rolling out frameworks focused on social and strategic investments.
South Africa’s Role
During its G20 Presidency, South Africa made sure this issue was on the agenda. The message was clear:
“Africa doesn’t need more advice, it needs access to predictable, affordable capital that helps communities grow.”
Dr Masondo stressed that partnerships between public and private investors, development banks, and global SWFs are crucial to moving forward.
Building SWFs That Work
To truly make a difference, African SWFs need to be:
Transparent and well-governed
Aligned with ESG goals (Environmental, Social, and Governance)
Focused on both financial returns and social impact
Designed to deliver results on the ground — in communities, not just boardrooms.
More Than Just Money
“If we get it right,” said Dr Masondo, “SWFs can become vehicles of dignity — helping fund the hospitals, schools, green energy, and industries that give young Africans a real future.” Now that’s the kind of finance story worth paying attention to.
Read the Speech by the Deputy Minister of Finance on the National Treasury’s website.
