Angola's New $5B Wealth Fund

Luanda, Angola (CNN) -- Angola, Africa's second-largest oil producer, has launched a $5 billion sovereign wealth fund in an attempt to diversify its economy -- a move more associated with wealthy Gulf States like Qatar and the UAE.

The state-owned investment fund, known as the Fundo Soberano de Angola, will invest domestically and internationally, focusing on infrastructure development and the hospitality industry. These are two areas the Government of Angola believes is "likely to exhibit strong growth".

In an exclusive interview with CNN, Jose Filomeno de Sousa dos Santos, the son of Angola's longtime president who is on the board of the fund, said "now is a very good time."

He added: "The country has had around five years of steady growth, good growth, mostly based on oil production increases, and it plans to diversify the economy. The best way to do that is to do that is to intervene directly in the economy through investments."

More than 90% of Angola's revenue comes from oil production -- reaching around 1.9 million barrels a day -- and it is second only to Nigeria in its exports. But despite its oil wealth, the country remains largely impoverished.

Dos Santos says the aim of the fund is to invest profits accrued from oil to promote social development in the country.

"It is very easy to have oil money and spend it but it is very difficult to have a positive impact to improve people's lives on a daily basis," he said, "and that is an area we intend to invest on a lot with the sovereign wealth fund."

The formation of a formalized fund was first announced by Angola's President Jose Eduardo dos Santos. But the global financial crisis caused the oil price to plunge, hammering Angola's economy.

The government had to offset the crisis by securing a loan from the International Monetary Fund (IMF) in the form of a Stand By Arrangement of around $1.4 billion.

With new deep water oil finds announced by the government, Angola hopes to outstrip Nigeria to become Africa's largest oil producer. But the revenue from Angola's black gold won't last forever. The government hopes the sovereign wealth fund will help diversify Angola's profits to secure its future.