Technical Advisor, Sovereign Wealth Funds
Reference: PG/MUS/0569
Location: Port Louis, Mauritius
Duration: Nine months
Closing Date: 27 Jan 2012
Project Background
Mauritius has succeeded in diversifying its economy and has built a relatively strong financial system and financial services sector whilst also achieving and maintaining macroeconomic stability. As a significant measure of success for a small state, Mauritius has also successfully begun to build its long-term savings base. However, in doing so it has come up against a new set of challenges, characterised by its small size, in that the domestic economy cannot generate the returns and adequately diversify risk.
In November 2010 the Government of Mauritius announced in the Budget Speech that it was setting up a sovereign wealth fund (SWF) to seek higher returns from national wealth, and invest in a well-diversified portfolio. The SWF would manage a portfolio of approximately USD 3 billion. The NPFs global portfolio (made up of savings from the pooling of government employees’ pensions) is expected to grow to around USD 2 billion in the next two to three years and keep on rising as it expects to accumulate surpluses for at least the next ten years. Additionally, in the past five years, Mauritius’ savings from foreign exchange reserves (the result of successful diversification, opening of the economy and securing sustainable export markets) have increased by around 55%, due mainly to a surge in FDI since 2006. Mauritius has in fact attracted more FDI during the period 2006 to 2010 than in the preceding 40 years put together.
These circumstances provide a valuable opportunity to increase returns by taking higher risks on part of the reserves, and constitute strong arguments for establishing a specialised and well-structured investment management organisation such as the SWF.
Summary of Project
This project aims to assist the Government of Mauritius to establish a Sovereign Wealth Fund (SWF) as announced in its budget of November 2010. The technical assistance will help to ensure that the management and governance structures of the SWF meet international best practices, particularly with regards to transparency and ethics.
The immediate beneficiaries will be the Government of Mauritius though the Ministry of Finance and Economic Development alongside the Funds main sponsors; the National Pension Fund (NPF) and the Bank of Mauritius. Ultimately, the country as a whole will benefit through increased economic returns to national investments and improved resilience to economic fluctuations. By strengthening Mauritius' financial position in this way, increased resources will be available to support social spending.
Project Purpose
The purpose of this project is to provide technical assistance to enable the Government of Mauritius to make operational decisions with regard to the management, governance and legal structures for the establishment of a Sovereign Wealth Fund (SWF).
The SWF is expected to enhance Mauritius’s ability to respond effectively to, and withstand crises based on a more diverse and risk-balanced national investment portfolio.
Duties and Responsibilities
Expected Activities (to include, but will not be limited to):
- Review of the work already undertaken by the government alongside a desk review of relevant literature on the proposed legal, governance and management structure of the Fund
- Stakeholder interviews focusing on the domestic requirements of the proposed SWF, prevailing institutional arrangements, and understanding the level of local knowledge around the function of SWFs
- Development of revised proposals based on international best practice
- Production of a Report including revised or new framework documents and a draft timeline for the establishment of a SWF
- Presentation of the Expert Report findings and recommendations to Stakeholders
- Facilitation of stakeholder discussions and formulation of an agreed establishment timeline
- Formulation of the terms of reference for SWF senior management roles
- Liaising with, and supporting the Ministry of Finance and Economic Development Human Resources Department throughout the recruitment processes
- Preparation of handover material for the CEO and other senior management where relevant
Project Outputs
- Comprehensive report on the proposed legal, governance and management structure of the Fund. This report will including a review of the work already undertaken by the government, and revised proposals.
- Draft timeline and delineation of responsibilities for establishing the SWF on the basis of the report recommendations. This will be based on workshop presentations of the report findings and recommendations, followed by stakeholder discussions
- SWF Chief Executive Officer (CEO) and other members of the senior management team recruited and in place for the fund to begin operations. The expert will support this process from the formulation of the terms of reference for these roles through to the final recruitment
Implementation Arrangements
The expert will be based at The Ministry of Finance and Economic Development for the full term of the project. MOFED have assigned a counterpart Project Manager with which the expert will work most closely and report to. The expert will also engage in extensive in-country consultations with relevant stakeholders across Government, supported where applicable by MOFED.
The project will be managed by the Technical Cooperation & Strategic Response Group (TCSRG) of the Commonwealth Secretariat, with technical support provided by Economic Affairs Division (EAD).
Monitoring and Evaluation of the project will take place during the course of its implementation. The Adviser will be expected to provide an Inception Report within one month and mid-term Progress Report to his / her designated Project Manager at the Commonwealth Secretariat signed by the Reporting Officer. A final Project Completion Report which combines evidence from all review mechanisms will be completed at the end of the project.
Transfer of Expertise
The Commonwealth Secretariat attaches particular importance to the transfer of expertise and knowledge to counterparts. The expert in his/her discussions with the Reporting Officer should draw attention to the need for key staff to be assigned as counterparts at the beginning of the assignment. This should be reported on in the Inception Report. A training programme for key counterpart staff should be produced by the expert and agreed with the Reporting Officer. An update should be provided on this in the first Progress Report.
Experience & Qualifications
The successful candidate should possess the following experience and qualifications to be considered for this post:
Person Specifications
Working Experience
Essential
- At least 7 years hands-on experience in the management of Sovereign Wealth Funds, knowledge of international best practices concerning the appropriate management, governance and legal structures to support their establishment
- Extensive experience of working at a government / ministry level
- Extensive experience of organisational design and institutional development
- Proven experience in capacity development / training
Desirable
- Experience in working in Pacific island states / other small state jurisdictions would be an advantage
- Expertise concerning national investment management would be an advantage
Educational Qualifications
- Advanced degree (Masters Degree or equivalent) in International Finance or other relevant subject
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