Mohamed Benchaâboun, director general of the Mohammed VI Fund for Investment (Image AfDB)

AIF 2023: African Sovereign Funds, New Drivers of Dev’t

The new generation of sovereign wealth funds are shaping the future of the continent, and Africans must take the reins of their development, said Mohamed Benchaâboun, director general of the Mohammed VI Fund for Investment.

Benchaâboun, head of the fund initially capitalized at $1.5 billion, was speaking on the first of the Africa Investment Forum (AIF) Market Days, Africa’s premier investment mobilization platform in Africa, organized by the African Development Bank (AfDB) and its partners.

Africa has some 20 sovereign wealth funds, innovative vehicles for financing the private sector and development projects. 

These funds are intended to have a dual impact: both financial profitability and generating economic, social, and environmental impact to contribute to sustainable development and job creation.

“Truly strategic instruments of the State, successful sovereign wealth funds are the vehicles that speak the language of the private sector while working to the priorities of the public sector,” Morocco’s former Finance Minister Benchaâboun said.

The Mohammed VI Fund for Investment offers innovative financing mechanism to Moroccan businesses tailored to their funding needs at home and abroad to increase their competitiveness.

“For each dollar invested by the Fund, a minimum of two dollars must come from private investors,” said Benchaâboun.

The Mohammed VI Fund is currently finalizing the process of selecting management companies to manage thematic and sectoral funds. These funds are intended to offer Moroccan companies financing solutions to strengthen their investment capacities, create sustainable jobs and develop their business activities in new geographical markets, he said.

Benchaâboun announced that 46 companies had applied for these thematic funds and the results would be made public by the end of the year.

Similarly, the Fund has launched a subordinated debt product to complement its equity financing offer to enable Moroccan companies to finance their investment projects while strengthening their equity.

The Fund is also developing innovative tools for the preparation of infrastructure projects and for the acquisition of equity in these, in order to accelerate the pace of sustainable infrastructure development in Morocco.

On Wednesday, the Fund signed a letter of intent with the African Development Bank and is expected to sign a €500-million mandate letter with the European Investment Bank.

“Morocco is fully committed to this type of investment,” said Benchaâboun, adding that Africa should have confidence in itself and that the AfDB plays an important role in this regard.