Credit Suisse, UBS, Goldman Sachs get nod to manage Nigeria's Sovereign Wealth Fund

By The Citizen

The Nigeria Sovereign Investment Authority on Wednesday appointed Goldman Sachs, UBS and Credit Suisse as asset managers for the 20 per cent portion of the $1bn Sovereign Wealth Fund that is meant to cushion against oil price shocks.

The SWF seeks to help the country 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 protecting against commodity price shocks - the so-called stabilisation fund.

Africa's top oil producer pumps around two 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 said it would allocate 32.5 per cent of the fund to infrastructure, the same amount to the savings pot and 20 per cent to the stabilisation fund, with the remaining 15 per cent unallocated.

'The fund's assets will be invested conservatively, with capital preservation in nominal terms being of primary importance,' the NSIA special advisor, Obinna Ihedioha, said.

He added in a statement that UBS would manage the United States Treasury bond portfolio and Goldman and Credit Suisse would manage the US corporate grade bonds.

The SWF started with only $1bn owing to opposition from the country'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.

The Excess Crude Account, which the SWF was originally supposed to replace, according to Reuters, is easily raided for spending.

It had $9bn in it in December last year, but distribution to the states and spending had shrunk it to closer to $5bn by last month, according to state data. - Punch.