(Updates with copper dependence in fifth paragraph.)
Jan. 8 (Bloomberg) -- Zambia plans to establish a sovereign wealth fund to spur investment outside the mining industry of Africa’s biggest copper producer, President Michael Sata said.
The fund will be set up through the Industrial Development Corp., which will oversee the southern African nation’s state- owned companies, Sata said in an e-mailed statement today. It “will focus on stimulating investment in strategic non-mining industries among others, thereby expanding the country’s investment portfolio and thus creating jobs,” he said.
Zambia is joining Africa’s largest oil producers, Nigeria and Angola, in establishing sovereign wealth funds. It will get funding from the dividends of about 40 state-owned companies, while the government will also provide some “seed capital,” Zambian Agriculture Minister Robert Sichinga said.
“There is a need for a coordinating unit to help with the country’s industrial development,” Sichinga said by mobile phone from Kasama in Northern province. He couldn’t say how much the government will inject into the fund.
Zambia’s government is boosting investment in roads and other infrastructure to encourage the development of tourism and agriculture. The country aims to cut its dependence on copper, which accounts for about three-quarters of the landlocked nation’s export earnings.
Neighboring Angola started a $5 billion sovereign wealth fund in 2012 to invest in agriculture, mining, infrastructure and real estate, plus cash, bonds and equities. The Luanda-based fund, headed by the eldest son of President Jose Eduardo Dos Santos, will help diversify the economy away from oil, the government has said.
Another neighbor, Zimbabwe, is also planning a fund, which will be financed by mining royalties and special dividends on state mineral and metal sales, according to a draft of the Sovereign Wealth Fund of Zimbabwe Act obtained by Bloomberg News in November.
--Editors: Dylan Griffiths, Ana Monteiro, Ben Holland.