How Norway has enriched thanks to prudent management of oil resources

Oil production in the Scandinavian country of Norway began on June 15, 1971, and the country's sovereign wealth fund was established in 1997 to invest in the country's surplus oil revenues.

The fund raised $ 131 billion in 2017 – the largest amount in 20 years of the fund's history, surpbading the market value of $ 1 trillion last September, according to the fund's annual report.

This after its stock market value was boosted by soaring stock markets around the world.

The fund is 2.7 times larger than the Norwegian economy. Norway's economy is largely ocean-based and its main industries – oil and gas, shipping, fish farming and fishing – are all off the coast.

The fund is worth £ 140,000 for every man, woman and child in Norway.

The fund 's ambitions as an investor are significantly in line with the United Nations goals of achieving sustainable economic, social and environmental development by 2030.

Carine Smith Ihenacho, head of the fund's corporate governance, said in September 2018: "That's why we are considering long-term sustainability …

We believe that the United Nations Sustainable Development Goals are a good framework to look at because they cut across many indicators. "

The fund currently invests 67% of its money in equities, but last year it decided to increase the allocation to 70%.

Do not underestimate the number of shares that this fund already holds: 1.4% of all publicly traded shares in the world.

The fund's chief executive, Yngve Slyngstad, said in 2017: "I do not think anyone expects the fund to reach a trillion dollars, when the first oil revenue transfer was made in May 1996 ".

The fund, the largest piggy bank in the world, holds about 60 billion pounds sterling in Britain, making the UK the second largest market after the United States.

Commonly called the Petroleum Fund, it is managed by Norges Bank Investment Management and was created to save money for future generations of Norwegians.

The fund invests in stocks, bonds and real estate in 77 countries around the world.

It's invested in 9,146 companies around the world, but its biggest growth last year came from Apple.

The US company, whose market value exceeds $ 8 billion, has a market share of 0.9%.

Last year, the share price of Apple rose to 46%.

The second largest contributor to fund performance came from Tencent, a Chinese technology company, and Microsoft.

The other holdings are Nestlé, Alphabet, owner of Google, Royal Dutch Shell and Microsoft. The worst performers were GE, Exxon Mobil and Israeli healthcare company Teva Pharmaceutical Industries.

Ethical rules mean that it does not invest in companies producing tobacco, nuclear weapons or antipersonnel mines.

The United States is the largest holding of the fund in the United States, where 37.2% of the capital is invested and the stock market has been good, especially in the second half of 2017, with benchmarks such as Dow Jones Industrial Average index and the S & P 500 index, repeated forever. highs.

The Norwegian sovereign wealth fund has increased its holdings of US equities every year since the 1990s, reaching $ 249.7 billion last year.

Ghana and the Norwegian model

Ghana can follow the Norwegian model. The current regime is investing the country's oil resources in financing its flagship policy for free high schools.

It is a commendable policy. But the country can do more.

A more sustainable approach would be to invest the county's petroleum resources in global equities. Investing in the education sector is the second best solution because it is also an investment in the future of the country.

Norway – already one of the richest countries in the world – is aware of the achievement of the UN's Sustainable Development Goals.

Ghana – a country that has not yet achieved the status of a middle-income country – should then be a more determined country to achieve these goals.

The author is a young man interested in the administration of oil revenues in Ghana.
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