South African President Cyril Ramaphosa has proposed setting up a sovereign wealth fund to help boost economic growth, and his ruling African National Congress (ANC) backs the plan, two senior party officials said on Tuesday.
Ramaphosa, who replaced scandal-plagued Jacob Zuma as ANC leader late last year, is trying to rekindle growth before next year’s national election.
There were no immediate details on where the money for the fund would come from. Most sovereign wealth funds utilise revenues from oil and gas exports. South Africa does not have significant energy deposits but has a large, albeit struggling, mining industry.
The idea of setting up a sovereign wealth fund, which other emerging markets such as Russia use to lift growth at times of weak commodity prices, was dropped by South African officials several years ago when commodity prices plunged.
“We support the idea, put forward by the president, of the creation of a sovereign wealth fund,” ANC Deputy Secretary General Jessie Duarte told reporters on Tuesday.
“It’s another mechanism to ignite our economic prospects.”
South Africa’s economy has performed poorly this year, despite a short-lived pickup in business and consumer conference around the time that Ramaphosa replaced Zuma as ANC leader.