Revenue Regulation Fund (RRF)
What Is the Revenue Regulation Fund (RRF)?
The term Revenue Regulation Fund (RRF) alludes to a sovereign wealth fund (SWF) laid out and worked by the government of Algeria. Founded in 2000, it is officially known as the Fond de Regulation des Recettes. It was Africa's largest sovereign wealth fund. The RRF is funded basically by tax revenue collected from companies taking advantage of the nation's oil and gas reserves. There was no refreshed data accessible for the fund as of June 2022.
Understanding the Revenue Regulation Fund (RRF)
Sovereign wealth funds are state-owned investment vehicles. The beginning of these funds might be commodity-or noncommodity-related. Funding is derived from different sources including fiscal surpluses, tax revenue, resource exports, surpluses from the balance of payments, and transfer of payments from the government.
The purpose of individual funds might fluctuate. These objectives might include saving for people in the future, funding social and economic development, funding for a nation's private sector, political reasons, protecting an economy from volatility in commodity prices, as well as capital growth and preservation.
The Revenue Regulation Fund or the Fond de Regulation des Recettes was one of Africa's largest sovereign wealth funds. As referenced above, it was laid out in 2000 in Algeria, Africa's largest nation in body of land, with the Sahara Desert making up four-fifths of its nation. The fund starts from surplus revenues earned from taxes on the development of Algeria's hydrocarbons — essentially its oil and gas reserves. The primary justification for its send off was to act as an economic stabilization factor to cushion the impact of volatility in oil and gas prices on the government of Algeria.
Like most SWFs, the RRF works largely out of the public eye and its operations are wrapped in secrecy. It had about $57 billion in assets under management (AUM) starting around 2012, as per a report from the European Investment Bank. That figure developed to $72.6 billion of every 2019, as reported in Ressources, a French-language magazine that covers natural resources industries in Africa. In any case, Sovereign Wealth Fund Institute, an organization that provides data on the world's SWFs and positions them in light of assets, reported that the RRF had no assets as of June 2022.
Investors who need to invest in Algeria and other African nations might consider vehicles, for example, exchange-traded funds or American depositary receipts.
Revenue Regulation Fund (RRF) versus Other Sovereign Wealth Funds
The Brown Capital Management Africa Forum noticed that there was an increased interest in state-supported investment funds like the RRF throughout recent years. They will quite often be laid out in response to high commodity prices or large foreign exchange reserves. Albeit some investment funds are recent manifestations by developing nations, others are deep rooted. Africa's numerous sovereign wealth funds are somewhat new and unpredictable.
RRF is among the numerous SWFs found in Africa. The Libyan Investment Authority, laid out by oil-rich Libya, has about $67 billion in assets. A lot more modest funds are run by the governments of Botswana (the Pula Fund: $4.1 billion), Angola (Fundo Soberano de Angola: $3 billion), and Nigeria (Nigeria Sovereign Investment Authority: $3 billion).
As of June 2022, the five largest SWFs in the world were:
- Norway Government Pension Fund Global: $1.34 trillion
- China Investment Corporation: $1.22 trillion
- Abu Dhabi Investment Authority: $708.8 billion
- Kuwait Investment Authority: $708.4 billion
- GIC Private Limited: $690 billion
Highlights
- The fund was laid out in 2000 by the federal government.
- There was no refreshed data for the fund as of June 2022.
- It is funded by surplus revenues earned from taxes from the nation's oil and gas reserves.
- The principal purpose of the fund is to settle the national economy and provide a cushion against the impact of volatility in oil and gas prices.
- The Revenue Regulation Fund is a sovereign wealth fund owned and worked by the Algerian government.
