By Agency reporter   Tuesday, 14 Sep 2010

 

President Goodluck Jonathan said on Monday that he had sent a bill to the parliament to create a sovereign wealth fund. He also said that federal and state governments had set aside $1bn in seed capital.

Reuters quoted the President as saying, ”I have forwarded a bill to the National Assembly to create a national sovereign fund to ensure that we have the legal underpinning for national savings.” Jonathan said this at a meeting with honorary foreign investment advisers.

”The Federal Government, in concert with state governments, has already set aside the sum of $1bn as seed money for the national sovereign wealth fund.”

The fund is expected to have three main segments; savings for future generations, an economic stabilisation fund and an infrastructure fund for co-investment with other investors, the latter being the largest part.

Finance Minister, Mr. Olusegun Aganga, had said he wanted the fund to replace the current system whereby Nigeria saves oil revenue above a benchmark price into an excess crude account.

The ECA was a pillar of reforms backed by the International Monetary Fund and introduced in 2003. But there is no clear legal basis on which to determine how the funds should be shared between the three tiers of government; state, federal and local, leading to constant political wrangling.

The savings in the ECA have dwindled from around $20bn in 2007 to less than $500m.

Source: The Punch