Sovereign Wealth Fund and Kenya’s Development Aspirations

Executive Summary

The Global South is awash with precious minerals and natural resources, though their prudent management presents a mixed bag of fortunes. Hindsight’s are indicative of vast discoveries especially hydrocarbons and rare earth. Years between 2011 and 2018 witnessed a surge in major gas discoveries along the Indian Ocean coastline (Mozambique and Tanzania), Egypt, West Africa (Senegal and Mauritania), and South Africa. The International Energy Agency estimates that these findings in Africa account for over 40% of new global gas discoveries. Challenges in the management of these natural resources are predominantly manifested by the “resource curse” phenomena prevailing in many low-income states. Conflict over monopolization and misappropriation of the resulting revenues are ubiquitous in the Democratic Republic of Congo, South Sudan, Angola, and Ecuador. With the oil discovery in the East African region and the potential offshore natural gas resources
in the Kenyan maritime area, concerns around resource-instigated conflicts are extant. This paper presents ideas that could
be utilized to manage this wealth and avert or assuage the emergent resource-based threats to the development agenda in Kenya. Contextual analysis of Sovereign Wealth Funds (SWFs) provides insightful lessons and best practices for Kenya’s
prospective SWF laws and policies that will advance the development agenda and mitigate resource conflict.