| Nowadays the lessons of Indonesia and Norway are widely known. Lots of resource-rich countries and other jurisdictions put commodity earnings aside in sovereign wealth funds. But the temptation of a commodities boom is still hard to resist, especially when it’s the first time.
While it saved slightly less than $500 million in oil revenues in two sovereign wealth funds from 2012 to 2014, the government borrowed approximately $7 billion on international financial markets, at interest rates approximately 5 percent higher than the rate of return on sovereign wealth fund assets. The Ghanaian experience highlights the dangers of over-exuberance when new discoveries are made...............................................Full Article: Source |