Friday, July 02, 2010

On the proposed Nigerian Sovereign Wealth Fund

Excellent briefing paper on the proposed NSWF for Nigeria from Revenue Watch here and here for the PDF report itself. 16 billion dollars has been disbursed from the Excess Crude Account in the past 18 months, to cover budget deficits, power sector projects and fuel subsidies, as well as in payments to State Governors that don't go through the State Budget process. If President Jonathan shows as much resolve in pushing through the sovereign wealth fund (which will require a change to the constitution to build in a savings requirement) so that the unaccounted benefits of discretionary off-budget ECA payments to State Governors are put to an end as he has done in beginning to change the way football is governed in Nigeria.... well that would be a fine thing!


Myne Whitman 7:24 pm  

The reasons Nigerian policy makers use to proffer solutions to national issues can be so illiterate at times. We're the only OPEC member without a SWF? *SMH* Anyway how to save the money might not be the primary problem but how it is disbursed, to who and for what. What about monitoring?

Anonymous,  11:54 pm  

The constitution does NOT really need to be amended to accommodate a SWF. The constitution's provision for joint ownership of the Federation Account among the 3 tiers of govt and distribution according to an Act of the NASS is NOT a mandate for the immediate distribution of revenue accruing to the account.

The current monthly distribution of revenues accruing to the Federation is neither a legal nor constitutional requirement, but rather political. Accordingly, to the extent that a new Act of the NASS assembly is enacted to accommodate the SWF and its saving component, while retaining the joint ownership component, it should pass constitutional muster.

@Myne, whether Nigeria elects to employ a SWF or not, it is a brilliant idea for Nigeria to have "rainy day" fund of sorts (by whatever form or designation known), and frankly we should not be adverse to following proven paths that have already been thread by others. And frankly, a well-structured SWF (run by professional managers) should have in-built transparency and accountability provisions.

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