Botswana has introduced a fresh sovereign wealth fund aimed at reducing dependence on diamonds, boosting job creation, and taking a stronger role in managing state owned enterprises, officials announced on Wednesday, as sluggish global diamond demand continues to strain economic growth.
For more than 30 years, the southern African nation has operated the central bank-managed Pula Fund, designed to save mineral revenues and stabilize public finances. However, repeated budget deficits have steadily eaten into those reserves, leading to the creation of a new fund with a broader mandate.
“The Pula Fund is a liquidity stabilisation fund; it takes cash and keeps it for a rainy day. This sovereign wealth fund will not be only about stabilisation, it’s about growth,” board chair Farouk Gumel told reporters. “We are not only going to be managing cash, but also assets, including some state owned entities.”
Deputy board chair Emma Peloetletse added that withdrawals would be restricted to investment returns rather than the fund’s capital, and that investments could be made both locally and internationally. According to officials, the newly appointed board includes a mix of domestic and global experts.
