Vanguard (Lagos)

7 November 2013

Nigeria's Sovereign Wealth Fund Ranked 44th On Transparency Index

Nigeria's sovereign wealth fund has been ranked number 44 on the global Sovereign Wealth Transparency rating for the third quarter of 2013.

Known as the Linaburg-Maduell Transparency Index, it rates the sovereign wealth funds of countries in terms of how transparent they are to the public.

According to the rating for the third quarter released yesterday, the Nigerian Sovereign Investment Authority (NSIA) achieved a rating of '4', to place 44th out of 51 sovereign wealth fund rated by the Sovereign Wealth Institute.

The minimum rating is 1, while a fund must achieve minimum rating of 8 in order to claim adequate transparency.

Though four points below the recommended minimum of '8', it is however a three step improvement when compared to the rating of '1'achieved in the previous quarter by the NSIA. The implication however is that the country is still far below in terms of transparency of the operations of its $1 billion sovereign wealth fund.

It would be recalled that the NSIA made its first investment last month when it committed over $200m to UBS, Credit Suisse and Goldman Sachs to manage a fixed income portfolio.

The third quarter Linaburg-Maduell Transparency Index also revealed that the sovereign wealth funds of eleven countries maintain their hold on the top eleven positions with rating of '10', on the index. These are Chile, United Arab Emirate (UAE), Singapore,Ireland, Azerbajan, Australia, USA, Norway, New Zealand and Canada.

Nigeria joined the clubs of countries that have sovereign wealth funds in 2011 when the Nigerian Sovereign Investment Authority (NSIA) Bill was signed into law on Thursday, May 26, 2011, by President Jonathan. In 2012, the federal government appointed an eight man board to pilot the affairs of the NSIA. The board is led by Alhaji Mahey Rasheed, OFR as chairman and Mr. Uche Orji as pioneer Chief Executive. The board is charged with the responsibility of managing the nation's sovereign wealth fund which was established with seed capital of $1 billion.

The fund comprises three investment baskets - the Nigeria Infrastructure Fund; the Future Generations Fund and the Stabilisation Fund. Commenting on the first investment of the NSIA, Orji told Financial Times that the Fund gave UBS $50m to invest in US Treasuries. A further $150m was being transferred to Credit Suisse and Goldman Sachs to build a US corporate bond portfolio. "This is a major milestone for us," he said, adding that the Fund had delayed making any initial investments due to the volatility in global markets. But on Monday he said that he felt the bond market was now "fairly valued".

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