Assessing the Effectiveness of Sovereign Wealth Fund on Development: Case of Rwanda and Norway

In recent years, the Sovereign Wealth Funds (SWF) have emerged as dynamic class as a crucial source of funding for economic development especially in times of economic crisis. The funds currently managed through various SWF are estimated between 2 and 3 trillion dollars, which is huge in terms of its development value to states that own them. For the developing countries of Africa, the objectives of creating SWF are to provide a resilient source of development in finance. Rwanda is one of the countries that is currently experimenting with the SWF called, the Agaciro Development Fund (AgDF). Nonetheless, most analyses of the value of SWF to economic development have focused on resource-rich countries and not countries with few resources such as Rwanda. Furthermore, few analyses have gone the ways of comparing the Rwandan SWF with other successful cases such as the Norwegian SWFs, which could provide insight into the management of SWF and facilitate the improvement of the Rwandan SWF. Thus, three fundamental questions arise, questions which this study sought to address namely; how did Norway's SWF develop and how has the fund been managed? How did Rwanda's SWF develop and how has the fund been managed? Are there any lessons from Norway's development and management of its SWF, for Rwanda? The study was based on a case study research design. This design was preferred because it permitted the researcher to explore and understand the intricate issues relating to SWF in general and the GPFG and the AgDF in particular. This study was entirely a qualitative research hence secondary sources of data were analyzed. The method for data collection was a historical study and it used a mix of content and logical analysis to examine the collected data.