Saturday, 12 May 2012 01:02

Okonjo-Iweala speaks to Wall Street Journal on Sovereign Fund

Written by Wall Street Journal
Lagos Mainland Lagos Mainland

Nigeria to Begin Operation of $1 Billion Sovereign Fund


ADDIS ABABA, Ethiopia—Nigeria's $1 billion sovereign-wealth fund is set to start operating in the next few months, said the country's finance minister Ngozi Okonjo-Iweala, in what would mark a crucial step to help the governement finance the revamping of its ramshackle roads and power grids.


Ms. Okonjo-Iweala, in an interview with The Wall Street Journal on the sidelines of the World Economic Forum, said the $1 billion will be pulled from Nigeria's Excess Crude Account, which also funds the country's fuel subsidy.


Ms. Okonjo-Iweala, who was recently in the spotlight for her unsuccessful bid for the World Bank presidency, said the fund's management team will be selected in the next few weeks.


The sovereign-wealth fund will be overseen by a governing council, made up of members of civil society including representatives from media and academics, that will review its decisions to ensure that the money is transparently invested, she said.

Sanusi & Okonjo-Iweala

The fund is a major component in Nigeria's attempt to hedge against budget volatility, build infrastructure, combat unemployment and provide economic growth.


"We want this growth to be inclusive and job creating because as of now there are not going to be enough jobs. We want to focus on the diversification of the economy," Ms. Okonjo-Iweala said.


Separately, she said Nigeria's move to convert 10% of its foreign currency reserves from U.S. dollars to Chinese yuan last year is "prudent and sensible" given the increasing trade with China.


Buoyed by low external debt of less than 3 percent and high petroleum prices, sub-Saharan Africa's biggest crude oil exporter grew 7.4% last year and is forecasting a growth of 7% to 8% in the budget for 2012.


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