On Air Now

Tune in to Listen

99.9 FM Hibbing, MN

Weather

Current Conditions(Hibbing,MN 55746)

More Weather »
34° Feels Like: 27°
Wind: ESE 8 mph Past 24 hrs - Precip: 0.22”
Current Radar for Zip

Tonight

Rain/Freezing Rain 29°

Tomorrow

Rain/Snow 37°

Fri Night

Rain/Snow 32°

Alerts

Nigeria picks Goldman, Credit Suisse, UBS for wealth fund

A trader works inside the Goldman Sachs stall on the floor at the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid
A trader works inside the Goldman Sachs stall on the floor at the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid

LAGOS (Reuters) - Nigeria's sovereign wealth fund on Wednesday appointed Goldman Sachs , UBS and Credit Suisse as asset managers for the 20 percent portion of its $1 billion fund that is meant to cushion against oil price shocks, it said.

The sovereign wealth fund (SWF) seeks to help Nigeria better manage its oft squandered oil windfall, with a threefold aim of putting money aside for infrastructure investment, providing a savings pot for future generations and lastly protecting against commodity price shocks - the so-called stabilization fund.

Africa's top oil producer pumps around 2 million barrels of oil a day, but much of that money is wasted on corruption and a bloated, inefficient bureaucracy, economists say.

In May the Sovereign Investment Authority (NSIA) said it would allocate 32.5 percent of the fund to infrastructure, the same amount to the savings pot and 20 percent to the stabilization fund, with the remaining 15 percent unallocated.

"The fund's assets will be invested conservatively, with capital preservation in nominal terms being of primary importance," NSIA special advisor Obinna Ihedioha said.

He added in a statement that UBS would manage the U.S. Treasury bond portfolio and Goldman and Credit Suisse would manage U.S. corporate grade bonds.

The fund started with only $1 billion owing to opposition from Nigeria's powerful state governors, who want oil savings to be distributed for spending, arguing that it is unconstitutional for the federal government to hoard money that belongs to all three tiers of government - federal, state and local.

The Excess Crude Account, which the SWF was originally supposed to replace, is easily raided for spending. It had $9 billion in it in December last year, but distribution to governors and spending had shrunk it to closer to $5 billion by last month, according to state data.

(Reporting by Tim Cocks; editing by David Evans)

Comments