After much delay, the controversial Sovereign Wealth Fund (SWF) will become operational October 2, 2012 following the federal government's approval of its Board and appointment of its key management officers. The SWF will commence with an initial capital of $1 billion.
Also, the Excess Crude Account (ECA) which is a fore runner of the SWF has increased to $7.35billion.
Disclosing these at a media briefing in Abuja, Coordinating Minister for the Economy and the Minister of Finance, Dr Ngozi Okonjo-Iweala, said commencement of the SWF operations was the result of a rigorous and transparent process which lasted almost a year.
She named a former Board member of First Bank Plc, Alhaji Mahey Rasheed, as Chairman of the SWF Board while Mr. Uche Orji, former Managing Director of JP Morgan, was announced as Chief Executive Officer of the Fund, for a tenure of five years.
Other members of the Board as announced included, Mr. Arnold Akpe, Mr. Jide Zeitlin, Mrs. Bili Awosika, Barrister Bisi Soyebo (SAN), Alhaji Hassan Usman and Mrs. Stella Ojekwe-Onyejeli, who will serve as Chief Risk Officer of the Fund.
Okonjo-Iweala disclosed that the selection process involved a professional services company, KPMG, which helped in sourcing the 730 applications that were submitted.
The minister disclosed that First Bank of Nigeria and an American-based banking and financial services company UBS have been appointed by the Federal government to manage the Fund.
She explained that 20 per cent of the fund would go to each of its three target funds namely the Future Generations Fund, Nigerian Infrastructure Fund and the Stabilisation Fund while the board would decide how to invest the remaining 40 per cent.
The SWF is aimed at saving money for future generations, funding infrastructure and defending the economy against commodity price shocks.
She revealed that auditor and consultancy firm KPMG helped to hire the SWF board.
President Goodluck Jonathan had signed a bill into law in May last year authorising the SWF, but powerful state governors originally blocked the fund, saying it was unconstitutional.
They later agreed to it, though with an initial fund of $1 billion, a fraction of the $7.35 billion savings currently in the ECA.
Many state governors fear the SWF will mean less money for them to spend than the current ECA system for saving oil cash.
The SWF is meant to replace the ECA eventually but Okonjo-Iweala said the two would run side-by-side until people get comfortable with the SWF.
According to her, the take-off of the Fund would not disrupt the operations of the ECA, adding that both would continue to be operated side by side until the latter will ultimately fold into the SWF.
The minister said based on the report of the Task Force headed by renowned banker, Fola Adeola, and other efforts of the Executive Nomination Committee headed by herself, 16 candidates were short-listed for the executive positions out of which three were finally selected.
She explained:"In all, 730 applications were received for three executive positions - Chief Executive Officer, Executive Director (Investments) and Executive Director (Risk). 40 of these were long listed by KPMG which assisted in sourcing suitable candidates, 16 candidates were short listed before the final three were selected.