While I was on vacation last week, Nigerian Finance Minister Ngozi Okonjo-Iweala announced the appointment of the Board and management team of the country’s new sovereign fund, the Nigerian Sovereign Investment Authority (NSIA).
This is a big moment for Nigeria. The country has struggled to overcome the resource curse and put its bountiful assets to good use, and there is a sincere hope that this new SWF will provide a lot of assistance in this regard.
And, equally, it has taken a lot of work to get to this point. I’ve been tracking the development of this fund for years. In fact, it was October 2009 that I first read and commented that Nigeria would “soon” have a new SWF. Since then there have been innumerable hurdles to overcome. So it’s great to see the fund with leadership and a firm plan to “go live” in early 2013.
Anyway, the new team at the helm of the NSIA looks solid. For example, the new Managing Director and CEO, Uche Orji, was an MD at UBS, worked at Goldman Sachs, and holds an MBA from Harvard Business School (but let’s not hold that last one against him...much). And all the other recruits are rather impressive as well. So the hiring process seems to have gone very well.
So, what’s next? Well, the new team will now set about developing a strategy, which, if we’re honest, won’t be easy. Recall that the new NSIA is comprised of three different investment vehicles: the Future Generations Fund, the Infrastructure Fund, and the Stabilization Fund. All three of these vehicles will have different over-arching mandates, which will in turn require quite different investment policies, strategies, managers, personnel, processes, software, metrics, benchmarks... you get the idea.
The Board will also have to decide how the NSIA’s assets will be parceled out between the three funds. Again, the regulation earmarks 20 percent of the AUM for each fund but then leaves the remaining 40 percent to the Board to divvy up. So they’ll have to sort that out... and do so in a rigorous and transparent manner.
Anyway, all this is to say that there’s still a lot to do. But (!) the act of naming a Board and management team still feels like a big deal. I guess it finally puts a friendly face on something that has, until now, been just an intangible investment vehicle.
And speaking of friendly faces, I’d like to leave you with a poignant comment by the new CEO Orji:
“This is not saving money for savings sake, this is about impacting the lives of people in a way that will be very fundamental for the future of Nigeria.”
Indeed, that’s what’s underpinning all of this: To effect positive change that will benefit all Nigerians. And with that in mind, I wish the new NSIA team good luck!
