MBABANE – Eswatini is drawing lessons from Belgium as it advances plans to establish its own sovereign wealth fund (SWF).
This is a move expected to strengthen long-term economic resilience, unlock strategic investments and accelerate the country’s industrialisation agenda.
The latest step in the journey came last week when the Chief Executive Officer of the Eswatini Investment Promotion Authority (EIPA) Sibani Mngomezulu, together with Ministry of Finance official Thulisile Gamedze, met with Tom Feys, Chief Investment Officer of Belgium’s Federal Holding and Investment Company (SFPIM), to gain insights into the European nation’s experience in establishing and managing a sovereign wealth fund. The engagement forms part of Eswatini’s broader efforts to design a fund that can support national development priorities while generating sustainable returns for future generations.
According to information from EIPA official pages, discussions focused on Belgium’s nearly two-decade journey since establishing its sovereign wealth investment structure, the fund’s contribution to economic development and the relationship between the fund and government since its inception.
The meeting comes at a time when Eswatini is actively exploring ways to diversify its economy, strengthen domestic investment and reduce vulnerability to external economic shocks.
A sovereign wealth fund is a State-owned investment vehicle that manages national assets for long-term financial returns. Such funds are commonly used around the world to invest surplus government revenues, strategic assets or foreign exchange reserves into profitable ventures that can generate wealth over time. Countries such as Norway, Singapore, the United Arab Emirates and Saudi Arabia have used sovereign wealth funds to transform excess revenues into long-term economic assets, helping finance development while safeguarding wealth for future generations.
For Eswatini, the concept has increasingly gained traction as policymakers seek mechanisms to mobilise capital for strategic sectors of the economy.
Finance Minister Neal Rijkenberg shared last year that government was considering the establishment of a sovereign wealth fund worth approximately E5 billion, equivalent to about US$275 million at the time. The proposed fund is expected to channel investment into productive sectors of the economy, including manufacturing, agriculture and other industries capable of generating employment and supporting economic growth.
At the time, Rijkenberg said the fund would help direct capital into sectors with the potential to create jobs, enhance productivity and increase economic diversification. The latest engagement with Belgian officials appears to indicate that government is now moving beyond conceptual discussions and into a phase of studying practical implementation models from countries with established sovereign investment structures.
*…
Strategic importance for Eswatini
MBABANE - The establishment of a sovereign wealth fund could represent a significant milestone in Eswatini’s economic development strategy.
Economists have long argued that developing countries need strong domestic investment institutions capable of mobilising long-term capital into productive sectors.
In Eswatini’s case, access to patient capital remains one of the challenges facing sectors such as manufacturing, commercial agriculture, agro-processing and industrial development.
A sovereign wealth fund could potentially help bridge this gap by investing directly in strategic projects, supporting industrial expansion and attracting additional private sector investment.
Such a fund could also provide a platform for government to participate in commercially viable projects while generating returns that can be reinvested into national development priorities.
Beyond financing development, sovereign wealth funds often serve as stabilisation mechanisms during periods of economic uncertainty.
*Full article available on Pressreader*
Last week, Chief Executive Officer of the Eswatini Investment Promotion Authority Sibani Mngomezulu (R), together with Ministry of Finance official Thulisile Gamedze (on screen), met with Tom Feys, Chief Investment Officer of Belgium’s Federal Holding and Investment Company. (Courtesy pic)