AFRICANGLOBE – Nigeria Sovereign Wealth Fund (SWF) says it has appointed three investment firms, Goldman Sachs, UBS and Credit Suisse as assets managers for its 20 percent stabilization fund.
Nigeria, Africa’s largest oil producer has often suffered in the past from mismanagement and embezzlement of the excess revenue derived from its 2 million barrel-per-day output.
In a bid to curb these wastages, the government established the savings fund to oversee reinvestments in infrastructure development, provide rainy day funds for future generations and protect against oil price shocks – stabilization fund.
The managers of the wealth fund, Nigerian Sovereign Investment Authority (NSIA) – which also allocated 32 percent of the fund each to infrastructure investment and savings – noted that it will thread a cautious path in spending the funds.
“The fund’s assets will be invested conservatively, with capital preservation in nominal terms being of primary importance,” NSIA special advisor Obinna Ihedioha said.
He added that UBS would manage the U.S. Treasury bond portfolio and Goldman and Credit Suisse would manage U.S. corporate grade bonds.
The fund was intended to replace the excess crude account which is constantly exploited for frivolous government expenditures. However, intense pressure from state governors who are beneficiaries of the oil revenue allocation, forced the federal government to reverse its plan.
According to Business Day, the excess crude account had $9 billion as at December last year, but due to continuous public withdrawals, it was shrunk to just $5 billion by last month.
By: Ehidiamhen Okpamen