By LAZARUS IBEABUCHI

ANALYSTS at Cowry Assets Management Limited have advised against investing the Sovereign  Wealth Fund in any government debt instruments as such investments maybe in jeopardy during periods of national economic crises thereby, negating the primary purpose of the SWF.

The company in its last weekly financial markets review and outlook said that the asset location challenges for the fund managers could include a restriction of investments to fewer eligible global financial instruments or assets given the goings on in troubled Eurozone, aweakened Chinese economy and a slowly growing U.S. economy.

“Consequently,we expect the fund managers to focus more on funding of local assets particularly with the infrastructural fund so as to close the yearning gap in the country’s infrastructural base,” the company said.

The Federal Government had announced the constitution of the Board of the Sovereign Wealth Fund (SWF). The SWF is to manage excess oil dollar earnings above the national budget benchmark crudeoil price.

The Fund’s managers are expected to provide guidance for the operations of the Nigerian Sovereign Investment Authority (NSIA) which was established in May 2012 and given the mandate to build a savings base for future generations of Nigerians; enhance the development of Nigerian infrastructure and promote fiscal stability for the country in periods of economic stress.

In addition to the aforementioned positives, the benefits of the SWF savings could, in the short term, favour the monetary side as less spending by the fiscal side would help rein in inflationary pressures.

The Fund has three windows: a stabilization window, which will be a means of stabilizing the macro-economy and manage volatility; an infrastructure window which will allow investment in infrastructure development in the country and to attract co-investors into the sector; and a future Generations window to make room for a solid savings base for the economy and save for the future.

Each of the windows will be assigned 20 per cent of the entire funds, bringing in to 60 per cent, while the Board and management of the NSIA are statutorily empowered to take investment decisions on the balance of 40 per cent.

The SWF currently has $1 billion drawn down from the Excess Crude Account which currently stands at $ 7.35 billion.