Asset managers want control of Sovereign Wealth Fund – KBC

Asset managers are calling on the National Treasury to change the proposed law on the Sovereign Wealth Fund to allow them to operate the endowment.

Britam Assets Managers Chief Executive Ken Kaniu says the move will shield the fund from mismanagement and political interference.

In February this year, the National Treasury released the Sovereign Wealth Fund Bill 2019 that seeks to establish a new wealth fund.

The proposed fund would invest revenue from petroleum and mineral revenues to three components namely savings, budget stabilization and one for domestic spending and investment.

In 2018 revenue from mineral resources totalled a partly Ksh 20 billion.

However, the government plans to increase revenue from mineral to around Ksh 200 billion by the year 2022.

Asset managers are now raising concerns over the proposal that gives the executive significant powers over fund management with the powers to appoint board members directly or indirectly and giving the Auditor-General the sole oversight powers.

Kaniu says the government should separate the day to day management of the fund form the executive.

Under the planned law, the stabilization component of the fund will cushion the economy from unforeseen shocks and will receive transfers of at least 15 per cent of total revenues, infrastructure development component 60 per cent and Urithi component at least 10 per cent.