 Hello everyone. It's been very interesting listening to the first two presentations and of how the topic of sovereign wealth funds really complements what has been discussed in terms of capital markets and pension funds. So my presentation today is based on this unowider working paper, Carter with Tony Addison, my Carter and mentor who also happens to be sitting right there. So I'll present on both of us. And if it's badly presented, it's only my fault, not his. So the reason why we got into this topic is because sovereign wealth funds are often portrayed as a symbol of national success and prestige. But to what extent have they really served development? And especially in the African context where most of the sovereign wealth funds have been created in the 2000s, now is a good time to actually look at what long-term impact have they had. So just to give a bit of overview first, there's over 100 sovereign wealth funds in the world and with a total asset capitalization of $8 trillion. 20% of those funds are in Africa. So there are 19 sovereign wealth funds in Africa. But in terms of capitalization, they only represent 0.1%. Actually, it's 0.8. I made a little mistake there. So you see that there is a huge imbalance in terms of the size of those funds. Why do you ask these questions now? I just mentioned the time horizon. But also in terms of usefulness, despite the small share of the world's global sovereign wealth fund capitalization, the value of African sovereign wealth funds is actually not insignificant, especially compared to the continent's financing needs and could contribute to financing the SDGs. Another issue is the fact that most of the capital base of those sovereign wealth funds have derived from extractive revenues, especially oil and gas. And in the context of global carbonization or depleting fossil fuel resources, there is an issue of how to keep capitalizing those sovereign wealth funds in the long term. Global decarbonization also implies that a lot of the so-called minerals of the future, they'll be increased demand. So what does it mean for African countries that are rich in those critical minerals? Are sovereign wealth funds a good option for them as well? So now is as good time as any to think about the role of sovereign wealth funds in the past, but also the role they can play for future African development. First, in terms of size, something that is quite shocking is that over the past decade, there has been a 67% decline in the total capitalization of African sovereign wealth funds. So going from about $220 billion to about $70 billion nowadays, a lot of that is due to the end of the 2000s commodities supercycle. But the COVID-19 pandemic also contributed to the decline as a lot of the liquidities were redrawn to help with short-term needs. Nowadays, the only large fund that remains is Libias with about $60 billion, though there is a reason for it is that most of the assets are frozen since the Libyan war, so they can't really access that money. And then followed quite distantly by Botswana's Pula fund. And if you look at it in per capita terms, you see that this is a logarithmic scale, so it's not really to scale, but it's the capitalization per capita is much, much lower than the sovereign wealth funds in the Middle East or even here in Norway, for example. In terms of types, first of all, we need to differentiate between different types of sovereign wealth funds, most typically between stabilization funds, intergenerational savings funds and development funds, which all have different objectives, but also asset types. So stabilization funds, their aim is really to provide a fiscal buffer in case there is a shock, so they mostly consist in liquid and low yielding assets, so typically US treasury bonds. We find them in Algeria, Ghana, Botswana. Intergenerational funds, their aim is to transfer some of the resources for future generations, their assets tend to be illiquid, so bonds of long duration. And development funds have a very different purpose because they aim to encourage national development by investing mostly locally in domestic infrastructure and the equity of domestic companies. So their assets are relatively illiquid, so equities in unlisted firms. What you might notice as well here is that a country like Ghana has all three types of funds and that's something we're actually going to go back to. So in terms of types, so most of Africa's Sominal funds tend to be fiscal stabilization funds, which means that they mostly invest overseas. Several of those funds have actually an unclear objectives, which then tells you a lot about the governance mechanisms and performance accountability. And a few have multiple objectives, especially Ghana and Nigeria. But some also have funds that are at the draft legislation stage, especially Tanzania and Mozambique. But something that we learn as well from the African cases is that there are a lot of overlaps between those different objectives and the distinctions between those funds is not watertight, either because a fund can be set up for a purpose, and this purpose changes over time, but also because governments can establish more than one fund, each with its own objective. So that's the case in Ghana and Nigeria, for example. In Ghana, there is a stabilization fund, a heritage fund for future generations, but also an infrastructure investment fund. There are also Sominal funds in Africa that have more than one simultaneous objective. That's, for example, the case for Botswana's Pula fund, and Mozambique's proposed Sominal funds, which have both stabilization and intergenerational savings objectives. Running several funds entails additional administration, but it has the merit of only having one objective against which to match assets. And if a single fund has several objectives, the purpose of the fund becomes a bit more unclear, and the governance becomes a bit harder, which links to the third issue that we are raising, which is the fact that most of Africa's Sominal funds tend to be vulnerable to mismanagement and corruption. So, for example, in terms of the sovereign wealth fund scoreboard, African funds tend to perform particularly badly. Nigeria is the highest ranking African country in terms of transparency scoreboard of sovereign wealth funds, and the only country above the scoreboard's average. But you have several stories across the continent, in terms of mismanagement of those funds, one of which, in my home country, Algeria, the stabilization fund, which has been completely emptied since 2013, but also without much information and transparency regarding how much money is actually in the fund. Libya's investment authority, especially in terms of the bad deals that it has struck with foreign investors, notably Goldman Sachs, which kind of also shows the relative power, the imbalance of power that those fund managers have with outside entities, and other funds in Angola, Equatorial Guinea, where there's been several cases of mismanagement. So one of the big questions that arise is from seeing this kind of landscape of what has happened with those funds over the past 10 years, is are they really, so which type of sovereign wealth fund offer better use of public savings in Africa, but is it even desirable for African countries to set up funds now? And what are the alternatives? How does it compare to alternatives just paying down national debt or setting up a national development bank? And here, what we really emphasize in the paper is that each option has pros and cons, and there are different kind of critical conditions of success to pay attention to. So for stabilization funds, one of the big advantages that it really helps deal with anticipated external shocks. I think the COVID-19 pandemic is a case in point. However, and this has been the kind of mainstream standard policy advice for sovereign wealth funds is that they should be stabilization fund. But the issue is that even with their existence, it's unlikely that a low-income or middle-income country would have a fund of sufficient scale to actually cushion the effect of a large shock. And Nigeria is also a very good example, as you saw with the COVID pandemic, because it's just not even enough to handle that, which means that those countries actually what they really need is an international monetary system that provides adequate help. Fiscal stabilization won't suffice on its own. Paying down national debt, the advantage that in many countries, especially with a high cost of debt, this can reduce the cost of sovereign borrowing by improving credit ratings and reduce the current debt service. But there is also the assumption that capital markets remain open to African economies in case of a shock. The third option is the intergenerational fund. You saw many African countries have intergenerational funds. The idea is to support future generations. The good thing is that those funds tend to be quite flexible. So they turn into something else when it's needed, especially as fiscal stabilization funds. But the issue is that, essentially, it has several issues. But the most important one is that they have a high opportunity cost for current generations. And sometimes, basically, if the living conditions of current generations are not met, it's very difficult to think about future generations. And a case in point relates to basically the fact that a better way or at least a more effective way to support future generations is actually to invest now on things like child nutrition, maternal care, education, which benefit not only current, but also future generations. And especially in terms of infant mortality rate, a large cohort of Africans never actually reach adulthood. One in 13 Africans die before the fifth birthday. And actually, many of those countries in terms of that have a very high infant mortality rate also tend to be countries that have an oil-based sovereign oil fund. Nigeria is also a case in point in terms of the very difference between the capitalization of their fund and the level of infant mortality rate. So in those cases, it actually benefits future generations more to invest now in terms of education and health care, as opposed to keep the money by US Treasury bonds instead. And that leads us to the fourth option, which is really about development finance funds, which help overcome some of the market failures that prevent investments in productive capacity building. And here, for example, they can be sovereign development funds or even national development banks. And national development banks face more scrutiny than sovereign development funds as they have commercial credit ratings if they issue bonds. But their success really depends on the ability to contain state failure and political capture than the appropriate governance mechanisms to make sure that they actually achieve their purpose. And something to add here is that the climate crisis also influences the suitability of different types of funds in the African context, especially given the very high patterns of commodity dependence that makes several African countries particularly vulnerable to climate and transition risks. In terms of agriculture and food security, I think we've seen over the past few years that climate change can have a big effect on food security in Africa, which is why moving towards climate resilient agriculture is quite important, but also in terms of transition risks. Fossil fuel exports in some recent years accounted for as much as 40% of African exports. So in the context of decarbonization and reduced demand for those, it's very, very important thing about productive diversification. So here the challenge is really about orienting sovereign wealth towards achieving productive investments for economic diversification, as opposed to just short-term fiscal stabilization. So that's why we turn towards the role of national development banks, which initially was not the purpose of our paper. But as we work through this topic, we realize it was very important to look at and compare the role to sovereign wealth funds. And here the picture is quite gray because there isn't much up-to-date information and financial reporting on national development banks in Africa. But broadly speaking, although many African countries have national development banks, most of them tend to be quite small, with the average mean asset size being about $1.8 billion. And the capitalization of African national development banks varies tremendously. So South Africa has three development banks, and they account for about half of the total capitalization of national development banks in Africa. How do they compare with sovereign wealth funds? So again, the policy of data makes the comparison a rough one. But roughly, we can say that the capital base of sovereign wealth funds, it's larger. However, their assets have shrunk at a very fast pace over the past few years compared to the capital base of Africa's national development banks. Furthermore, this picture here is kind of tainted by the very large Libyan sovereign wealth fund. And if you take out the Libyan fund, you realize that for the other 18 sovereign wealth funds in Africa, the total capitalization is about $13 billion compared to almost $40 billion for national development banks. Therefore, there's considerable scope for rethinking the transfer of public savings from sovereign wealth funds to national development banks. So to conclude, sovereign wealth funds have stalled in Africa. They're still on the agenda of many countries. Fiscal stabilization funds are useful and necessary, but they have a very high opportunity cost, especially in the absence of a stronger framework for multilateral financial assistance that would reduce the need for such self-insurance. The case for intergenerational savings sovereign wealth funds is generally weak, except for middle income countries with very large revenues. So there is a stronger case for sovereign development funds and perhaps national development banks to fund productive investments provided that they have clear mandates, strong governance, and legislative oversight. And lastly, we need to also, of course, recognize political realities. It's very difficult for governments to pursue a consistent public savings strategy. Political expediency can often win out, especially around elections time, which is why fiscal rules introduced with the best intentions can often break down. So if you want to read more of the paper, that's the one, as well as with the website to access it. Thank you very much.