(May 21, 2013) — A principal African country is to begin investing its new sovereign wealth fund (SWF) next month, but another of the continent’s major economies cannot find the spare cash to start one.
After much debate and discussion, the Nigerian SWF is to take shape next month, government officials have said.
After months of “will-they, won’t-they?” posturing, the Nigeria Sovereign Investment Authority, the body to manage the fund, has announced plans to kick off its activities, the country’s Guardian newspaper reported.
Initially, the fund will be worth $1 billion and be split between several investment avenues, the fund’s Managing Director and CEO, Uche Orji, told a press conference this week.
The Future Generation Fund will invest $325 million; the Nigerian Infrastructure Fund, $325 million; and the Stabilisation Fund will get $200 million. The remaining 15% is to be ring-fenced and kept unallocated for now and used to top up each of the fund’s investments where opportunities arise, Orji told journalists.
Elsewhere on the continent, however, plans have not been converted into action. The government in South Africa announced that it would not be launching a SWF for the moment, due to tough economic conditions.
Economic Development Minister Ebrahim Patel said the creation of such a fund “is best timed with stable or rising commodity prices. In light of market conditions, no immediate steps are contemplated” news service Business Report said.
Patel had mooted the idea three years ago, but without offering detailed plans for a South African SWF. He told the country’s journalists that the government would continue to invest in infrastructure and other public projects through the usual channels until the conditions were better to launch a dedicated fund.
Last year, the East African nation of Tanzania announced it would launch a SWF to ring-fence revenue from its natural resources.
Related content: The Last Bastions of Risk-Taking? SWFs