The Pula Fund is the
sovereign wealth fund
A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...
of
Botswana
Botswana (, ), officially the Republic of Botswana ( tn, Lefatshe la Botswana, label=Setswana, ), is a landlocked country in Southern Africa. Botswana is topographically flat, with approximately 70 percent of its territory being the Kalahar ...
. In December 2021 the fund had US$4.1 billion in assets under management.
History
The Pula Fund was established in November 1993, to invest surplus revenues from
diamond
Diamond is a Allotropes of carbon, solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the Chemical stability, chemically stable form of car ...
exports.
In 1997, the fund was re-established in its current form, under the
Bank of Botswana Act 1996 with the objective of providing greater flexibility in the management of international reserves, and greater certainty in the forecasting of annual “dividend” payments to the government from the
Bank of Botswana
The Bank of Botswana (BoB) is the central bank of Botswana.
When Botswana gained independence from Britain in 1966, the country was part of the Rand Monetary Area (RMA). In 1974 Botswana withdrew from the RMA, and the Bank of Botswana and Finan ...
.
In 2008, the fund agreed to the
Santiago Principles
The Santiago Principles or formally the Sovereign Wealth Funds: Generally Accepted Principles and Practices (GAPP) are designed as a common global set of 24 voluntary guidelines that assign best practices for the operations of Sovereign Wealth Fund ...
, a series of guidelines on best practices for sovereign wealth funds.
As of 2015, the fund has assets valued at $7 billion.
Prior to May 2019, the fund was restricted to investing in
United States dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
s,
Pound sterling
Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and t ...
,
Japanese yen
The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the ...
, and
euro
The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
s. In May 2019, the Bank of Botswana eased these restrictions, increasing the number of eligible currencies to 17.
In July 2020, the Bank of Botswana announced it would be seeking legislation to limit access to the fund, as the fund was being accessed by governments to meet budget deficits, leading to a steady fall in the fund's reserves.
See also
*
List of countries by sovereign wealth funds
A sovereign wealth fund (SWF) is a fund owned (or a political subdivision of a federal state) composed of financial assets such as stocks, bonds, property or other financial instruments. Sovereign wealth funds are entities that manage the nation ...
*
Economy of Botswana
The economy of Botswana is currently one of the world's fastest growing economies, averaging about 5% per annum over the past decade. Growth in private sector employment averaged about 10% per annum during the first 30 years of the country's inde ...
*
Mining industry of Botswana The mining industry of Botswana has dominated the national economy of Botswana since the 1970s. Diamond has been the leading component of the mineral sector since large-scale diamond production began in 1972 by Debswana. Most of Botswana's diamond p ...
References
{{Reflist
Sovereign wealth funds
1993 establishments in Botswana