The unusually long period spent on due diligence on the selected management team of the proposed Sovereign Wealth Fund (SWF) and their insistence on collecting letters of appointment before resuming work, were among the causes of the delay in the announcement of the team by the Federal Government, BusinessDay investigations have revealed.
Also, the strike action by the National Union of Petroleum and Natural Gas workers (NUPENG) which necessitated finance minister, Ngozi Okonjo-Iweala’s intervention, was responsible for the deferment of the inauguration of the SWF management team, from last week to this week.
BusinessDay however gathered that Okonjo-Iweala is today expected to announce the management team of the Fund, which has a British trained Diaspora Nigerian Doctor of Philosophy from the South East, as managing director/chief executive officer.
Others to be named include a chief investment officer, (CIO) and a chief risk officer (CRO) who are from the North and South- West parts of the country, respectively.
The fund is aimed at building a savings base for Nigerian citizens, enhancing the development of Nigerian infrastructure and providing stabilisation support in times of economic stress, among others. The enabling Act creates three vehicles for investment, namely: the Future Generations Fund, Infrastructure Fund and the Stabilisation Fund.
Okonjo-Iweala confirmed the development to BusinessDay at the week end, saying that her ministry has completed all the necessary formalities.
“I thought I would have been able to announce this thing this week (last week) but they want their offer letters ready. But as we speak, I am working on the offer letters, they didn’t want me to announce anything until they have gotten their offer letters in their hands. I am almost ready but would like to do it Monday or Tuesday.
“So what is holding us is purely administrative and we were doing due diligence that lasted more than the time we had planned, and it is important you do due diligence, so that you start with a group that you have confidence in”.
Responding, a top industry operator said, “In a typical SWF that seeks to make strategic investments so as to attract FDI investments and technology transfer, the key executives are the CEO, CIO, Chief Marketing Officer, Chief Financial Officer, Chief Operations Officer and a General Counsel. The Chief Risk
Officer is a position under the CFO, while Research is under the CIO. The SWF, as currently structured, has a CEO, CIO and CRO as the principal officers whose job it is to move the fund forward, together with a none executive board, made up of political appointees.”
Another top industry operator said, “My conclusion is not about the fund itself but about the initial management structure, which is a creation of the CBN on behalf of finance minister then, and which is geared towards a portfolio management form of SWF and not an FDI/Technology Transfer form of SWF. They did their best, as they were charting unknown waters.
The Nigerian SWF will evolve and succeed. There will be a learning process; the Nigerian SWF will eventually evolve to be an entity that is geared towards the needs of Nigeria. I did not mean to alarm you. I was merely talking about the initial structure which is too narrow for such an important organisation. Will the initial board have the knowledge and competence to fill the other important executive management positions I listed?”
The Federal Government is expected to launch the fund with the $1 billion seed fund set aside for the purpose since last year.