LAGOS Aug 28 Nigeria's sovereign wealth fund on
Wednesday appointed Goldman Sachs, UBS and
Credit Suisse as asset managers for the 20 percent
portion of its $1 billion fund that is meant to cushion against
oil price shocks, it said.
The sovereign wealth fund (SWF) seeks to help Nigeria better
manage its oft squandered oil windfall, with a threefold aim of
putting money aside for infrastructure investment, providing a
savings pot for future generations and lastly protecting against
commodity price shocks - the so-called stabilisation fund.
Africa's top oil producer pumps around 2 million barrels of
oil a day, but much of that money is wasted on corruption and a
bloated, inefficient bureaucracy, economists say.
In May the Sovereign Investment Authority (NSIA) said it
would allocate 32.5 percent of the fund to infrastructure, the
same amount to the savings pot and 20 percent to the
stabilisation fund, with the remaining 15 percent unallocated.
"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 in a statement that UBS would manage the U.S.
Treasury bond portfolio and Goldman and Credit Suisse would
manage U.S. corporate grade bonds.
The fund started with only $1 billion owing to opposition
from Nigeria's powerful state governors, who want oil savings to
be distributed for spending, arguing that it is unconstitutional
for the federal government to hoard money that belongs to all
three tiers of government - federal, state and local.
The Excess Crude Account, which the SWF was originally
supposed to replace, is easily raided for spending. It had $9
billion in it in December last year, but distribution to
governors and spending had shrunk it to closer to $5 billion by
last month, according to state data.