Nigeria, Africa’s top oil producer, started a sovereign wealth fund with an initial capital of $1 billion and hired KPMG to select its management team.
“It is clear that given current challenges facing our economy and the global financial crisis, we cannot afford to waste any more time,” Finance Minister Ngozi Okonjo-Iweala told reporters in Abuja today. “What we have done can be compared to opening an account for the sovereign wealth fund and commencing with other necessary procedures in preparation for full implementation.”
The management of the fund is expected to be approved in mid-December by President Goodluck Jonathan, she said.
The Nigeria Sovereign Investment Authority will be split into the Nigeria Infrastructure Fund, the Future Generations Fund and the Stabilization Fund, according to the bill signed into law by Jonathan in May. Each component will represent at least 20 percent of the total.
The fund is designed to ensure some of Nigeria’s oil wealth is saved and can’t be tapped on a regular basis to finance the government’s running costs. The fund will help the country save for the future, invest in strategic infrastructure projects in Africa’s most populous nation and act as a “buffer” against volatile oil prices, Okonjo-Iweala said.
The West African country relies on crude exports for about 95 percent of its foreign-currency earnings. It’s the only member of the Organization of Petroleum Exporting Countries without a sovereign fund, according to the Information Ministry.
Oil is currently trading at just above $110 a barrel, compared with the $75 anticipated in Nigeria’s 2012 budget.
Nigeria’s excess crude-account balance will be about $5 billion after $1 billion is used as initial capital for the wealth fund, the finance minister said.
Source: www.bloomberg.com
“It is clear that given current challenges facing our economy and the global financial crisis, we cannot afford to waste any more time,” Finance Minister Ngozi Okonjo-Iweala told reporters in Abuja today. “What we have done can be compared to opening an account for the sovereign wealth fund and commencing with other necessary procedures in preparation for full implementation.”
The management of the fund is expected to be approved in mid-December by President Goodluck Jonathan, she said.
The Nigeria Sovereign Investment Authority will be split into the Nigeria Infrastructure Fund, the Future Generations Fund and the Stabilization Fund, according to the bill signed into law by Jonathan in May. Each component will represent at least 20 percent of the total.
The fund is designed to ensure some of Nigeria’s oil wealth is saved and can’t be tapped on a regular basis to finance the government’s running costs. The fund will help the country save for the future, invest in strategic infrastructure projects in Africa’s most populous nation and act as a “buffer” against volatile oil prices, Okonjo-Iweala said.
The West African country relies on crude exports for about 95 percent of its foreign-currency earnings. It’s the only member of the Organization of Petroleum Exporting Countries without a sovereign fund, according to the Information Ministry.
Oil is currently trading at just above $110 a barrel, compared with the $75 anticipated in Nigeria’s 2012 budget.
Nigeria’s excess crude-account balance will be about $5 billion after $1 billion is used as initial capital for the wealth fund, the finance minister said.
Source: www.bloomberg.com
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