Nigeria following in foot steps of countries like South Korea, Abu Dhabi, Dubai, Kuwait, China and Norway will start its own sovereign wealth fund.
Nigerian Finance Minister Olusegun Aganga said he wants Africa’s largest oil producer to start a sovereign wealth fund in October, dedicating most of the money to investment in infrastructure.
“We have, just recently, had a beauty parade by all the legal and investment advisers who are keen to assist,” Aganga said in an interview in London. “Within the next day or two, we will be appointing the advisers.”
The fund will replace the Excess Crude Oil Account, which the government has often used to finance expenditure, Aganga said. Part of the new fund will be dedicated to savings that the government can’t touch unless oil prices plummet, while most will finance the construction of roads, railways and ports, in cooperation with private investors, he said.
The Excess Crude account currently has between $500 million and $800 million, which should rise to about $1 billion by the end of the year and will be transferred to the sovereign wealth fund, Aganga said.
“That will be the seed capital,” he said. “A large part of that will go to the infrastructure fund, if not all.”
The infrastructure fund will act “as a catalyst for both local and international investors,” Aganga said.
A third part of the sovereign wealth fund will be a stability fund, which will be similar to the current Excess Crude account, though harder for the government to access, he said.
Here is Olusegun Aganga discussing a range of financial issues.