For a population of only 5 million people, Norway punches way above it’s weight. It runs the largest sovereign wealth fund in the world with total assets estimated at $890 billion.
Much of Norway’s wealth lies below its beautiful landscape as oil and gas. It has invested it’s income so wisely that the fund is estimated to be worth $1 trillion by 2020
To be fair, the Norwegian lesson is not directly applicable to Africa as the country cautiously avoided not having to inject its oil wealth into the local economy. For instance it did not have to build massive infrastructure, and the institutions to take advantage of the income generated were already in place. For that they depended on modern financial initiatives such as shipping, banking and timber.
It’s success in establishing wealth which the whole population will benefit from has been driven by political will, developed democratic institutions and the rule of law. The lessons for resource rich African countries are very clear, particularly as the current crop of leaders begin to see the benefits of sovereign wealth funds and sharing that wealth with the people.
Read more on Norway’s success with its oil and gas resources here.
Image credit: Krister, Borgland Dolphin, CC BY NC-SA