In the Zimbabwe we want, a Sovereign Wealth Fund must be managed as the country's endowment to future generations. It is not a fund to be plundered by government and used to meet current needs, but a savings account that must accumulate over time and be used to meet future developmental needs.
We all know that the mining and other resources of a country cannot be replenished. It is therefore important that we save the income generated from those depleting resources now for the future. The fund can also be used to replenish the resource industry in the future and replace industries. Huge income earned from resources can be easily abused and the Sovereign Wealth Fund can be a mechanism to ring fence or protect that income from immediate abuse, and cushion the country from the risk of sudden large inflows of excess income. This, of course, requires discipline, patience and foresight.
The Sovereign Wealth Fund can only be viable where there is disciplined fiscal management and there is no temptation to use that money for recurrent expenditure. In a country such as Zimbabwe there exists a huge probability of abuse of a Sovereign Wealth Fund to meet current revenue gaps.
One can give here an example of personal savings, where you religiously save 10% of your monthly income for the future. It's a discipline where you build wealth over time.
This implies that we must seek to maximise the returns on the savings but we must invest them prudently so that the investment value of the Sovereign Wealth Fund increases with time before we can start spending. We must also ensure that where we invest Sovereign Wealth Fund income, we achieve real returns. The Fund must be managed like a stand-alone investment portfolio that is well diversified at least, beats inflation.
Critical of course, is that the management of this fund is removed from unnecessary political interference, a habit which we must unlearn as a country. Establishing a viable Sovereign Wealth Fund will take time and discipline.