4. There should be clear and publicly disclosed policies, rules, procedures, or arrangements in relation to the SWF’s general approach to funding, withdrawal, and spending operations.
4.1. The source of SWF funding should be publicly disclosed.
4.2. The general approach to withdrawals from the SWF and spending on behalf of the government should be publicly disclosed.
The Ordinance clearly states and enumerates the resources and funding of FSRG.
By virtue of the provisions of the Ordinance, it is provided that the FSRG is a reserve fund with a minimum capital of five billion (5,000,000,000) XAF.
This minimum capital may not be used to meet the expenses of the State, including those of an exceptional nature.
Until 2021, the minimum capital was funded through:
- a 10% levy on the annual oil revenues provided for in the Finance Act;
- 50% of all additional budgetary revenues corresponding to the exceeding portion of the basic assumptions of the annual Finance Act;
- dividends from the State's equity portfolio;
- all financial income generated by the Fund;
- donations and legacies.
As a result of the financial and economic situation following the COVID-19 pandemic, the funding method was reviewed.
In 2021, amendments to the Ordinance were proposed, adopted through a new ordinance dated 13 September 2021 published in the official gazette of the Republic of Gabon dated 17 September 2021 and available to the public.
The funding mechanism will be effective in FY2022. It is provided in the new Ordinance that the minimum capital will be funded as follows:
- a portion of the annual amount of the Provision for Diversified Investment (PID) and the Provision for Investment in Hydrocarbons (PIH) due from oil companies;
- a portion of the dividends paid by companies in respect of the shares held by the State;
- all the financial income generated by the FSRG;
- the total of the State's share of the remuneration of the savings sequestered in the framework of the provisions for the restoration of oil and mining sites;
- 50% of the additional budgetary revenue corresponding to an overrun of the basic assumptions of the annual finance act;
- donations and legacies.
The proportion will be calculated on a yearly basis in the Finance Act and made publicly available through the National official gazette.
Once the minimum capital is reached, it is envisaged that the contributions be as follows:
- 25% of the income generated by its investments;
- a portion of all additional budgetary revenues corresponding to an overrun of the basic assumptions of the annual Finance Act;
- a portion of the remuneration of the savings deriving from the escrow account put in place in the framework of the provisions for the restoration of oil and mining sites.
The withdrawal process and spending operations are subject to a “three-level” process of validation:
- the investment committee of FGIS, which is held between the Department of Investments and the Managing Director, which carries out a first analysis and screening process then
- the investment committee of the Board of Directors before the final decision by the Board of Directors which then delegates the execution of the projected investment to the Managing Director.
The Board of Directors is the guiding and decision-making body of FGIS. In this capacity, it is in charge of:
- proposing the overall management objectives of the FSRG to the Fund's Strategic Board;
- submitting the general guidelines of the FSRG's investment policy to the Strategic Board;
- approving the programmes and actions of the General Management;
- controlling and ensuring the proper functioning of the FGIS governance structures;
- examining and approving FGIS’ annual budgets;
- authorising the awarding contracts of any kind where commitments exceed two hundred million XAF.
The investment policy followed by the FGIS follows the guidelines as per the Act and the articles of association of the Fund which are publicly disclosed as published in the official gazette of the Gabon Republic.
The investment policy notably provides that the investments should:
- Ensure the FSRG development mandate while confirming its role as a savings fund;
- Develop the national investment portfolio in line with the country’s development plan (Plan d’Acceleration de la Transformation and Plan Stratégique Gabon Emergent) and strengthen the international financial investment strategy;
- Optimize the State's investment portfolio;
- Ensure the proper application of the Santiago Principles;
- Invest in high impact projects while ensuring an optimal risk/return ratio.