Abstract
In 2020, the South African government identified a sovereign wealth fund (SWF) as a policy measure to overcome the country’s socio-economic challenges. This study examined the views of experts in various fields regarding their perceptions of whether the proposed SWF is desirable, feasible, and sustainable. The analysis was based on a qualitative research design, where interviews, secondary data, and credible documents were triangulated. Employing state capitalism as an analytical framework, in which the state leads economic activity, the study concluded that South Africa is in a weak economic position to establish an SWF. The findings suggest that South African policymakers would benefit from integrating long-term economic plans into the country’s fiscal and monetary frameworks, as the country has neither the capability nor a defined need for an SWF. By investigating the elements that can determine the desirability, viability, and sustainability of an SWF for South Africa, the thesis of this study is that for African SWFs to be successful, particularly in South Africa, governments must improve governance, transparency, and investment strategies. When assessed against desirability, feasibility, and sustainability considerations in the establishment of SWFs within the South African context, the study argues that the purpose of the proposed SWF has not been defined, which suggests that it can be considered a premature fund. The study also indicates that while some states can capitalise and sustain SWFs, they have chosen not to establish an SWF, as no rationale or strategic value for going this route has been established. Trust in the state’s capacity to promote favourable conditions and finance industrial investment has also waned. South African policymakers have not defined the rationale and financing of the proposed SWF. A further investigation into repurposing the Public Investment Corporation into an SWF is warranted in view of the constraints encountered in obtaining primary data from the institution. Against this background and findings, the study proposes a blueprint for an SWF, predicated on six key considerations that serve as critical success factors for sustaining an SWF.