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Natural capital depreciation in Sub-Saharan Africa: The role of sovereign wealth funds
Author(s):Edward B. Barbier
edward.barbier@colostate.edu
2024-08-01 05:20:23
30 Downloads 68 Views
Abstract
Karl-Göran Mäler has long advocated that economies need to account for the depreciation of natural resources “used up” in production. Accounting for natural capital depreciation is also important for assessing the effectiveness of sovereign wealth funds in assisting Sub-Saharan African (SSA) countries in long-run management of their natural resources. This paper examines the differences in long run natural capital depreciation for SSA countries with and without sovereign wealth funds. On the average, the former economies display double the rate of natural resource depletion (28%) compared to the average across SSA (14%), but they also had slightly higher net national savings rates adjusted for depreciation. The best performing countries with funds are Botswana, São Tomé and Príncipe, and Namibia. The overall management practices and governance of natural resource based sovereign wealth funds in SSA must improve, if these funds are to finance long-term investments and economic development.
Keywords
Adjusted net national income, adjusted net national savings, natural capital, sovereign wealth funds, Sub-Saharan Africa, and wealth accounting.
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