Sovereign Wealth Funds (SWFs) across Africa could lose at least $19 billion as a result of the novel coronavirus disease (COVID-19) pandemic, according to a risk alert released by international advisory firm Konfidants.
Analysts at Konfidants, publishers of the African Sovereign Wealth Funds Index, believe that COVID-19 places a triple drain threat on these SWFs which will lead to a depletion of their assets under management.
One area of drain is expected to be government drawdown, with Ghana’s $219 million withdrawal from the Stabilisation Fund an early example. In addition, funds may lose money on investments, as corporate profits and stock markets take a hit. The third drain area is the loss of annual funding allocations which are unlikely to be honored during the crisis.
Globally, per Konfidants’ estimates, SWFs could lose at least $2 trillion, potentially rising to $3.6 trillion — with $27 billion in Africa alone — should the pandemic stretch beyond 2020.
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Source: Daily Mail GH