It’s Official: New SWF For Zimbabwe

Ashby Monk

Back in December, I noted that Zimbabwe was considering setting up a new SWF for mining revenues. Well, apparently the planning phase is over, as Indigenisation Minister Saviour Kasukuwere said today that the official plan would be released this Friday. Here’s the gist:

“Zimbabwe will effectively nationalise half of the country’s key resources sector by setting up a sovereign wealth fund to own 51 percent stakes of mining companies…

Obviously, this nationalization is an illustration of the serious political risks associated with frontier investing (especially within unsavory regimes like Mugabe’s). As a result, international investors will likely pull back even further from the country’s resource projects.

So, ironically, the Zimbabwean commodity fund may actually end up helping to prevent Dutch disease. Not in the traditional sense but in the sense that the new fund may prevent FDI altogether.

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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