Nigeria will begin investing the initial $1 billion allocated to a new sovereign wealth fund by June, a statement from the fund showed, after it delayed the start date twice. Africa's biggest oil producer is one of only three OPEC member states that do not yet have a wealth fund (SWF) set up. Global markets and investors are closely watching Africa's second-biggest economy's plans for its SWF. Nigeria's Sovereign Investment Authority (NSIA) in a late Monday statement, also said it would allocate 32.5 percent of the fund to infrastructure investment, the same amount for a savings pot for future generations, 20 percent to protect against commodity price shocks, with 15 percent unallocated. "This formula aims to balance the infrastructure need of the current generation and the need for savings for the future generation of Nigerians," the statement said. Investment in both the future generation and the stabilisation fund will start in June, but more details needed to be worked for the infrastructure fund, it said. The fund faces opposition from Nigeria's powerful state governors, who want oil savings to be distributed for spending on projects, arguing that it is unconstitutional for the federal government to hoard money that belongs to all three tiers of government - federal, state and local. Because of this, it started with a mere $1 billion, whereas the Excess Crude Account (ECA) it is supposed to replace had nine times that amount in it late last year. That has fallen to $5.87 billion so far this year, as the government has made withdrawals to appease state governors. Analysts say the ECA does not sufficiently protect Nigeria's oil savings from profligate politicians, because it can be dipped into too easily. Nigeria hopes the new fund will provide a firmer legal basis to ring-fence it's savings from competing demands so it can better save money when oil prices are high. The NSIA has moved the date of commencing its investments twice. Last year, the finance minister Ngozi Okonjo-Iweala told Reuters the fund would begin investing by the end of 2012 but political opposition stalled its progress. In December it delayed the launch again to March. http://english.ahram.org.eg/News/72002.aspx
