At the on-going World Economic Forum at Addis Ababa, Ethiopia the Nigerian minister of finance, Dr. Okonjo-Iweala spoke to Wall Street Journal on the country’s sovereign wealth fund (SWF). She confirmed that $1 Billion was withdrawn from Excess Crude Account and was used as seed money to establish Nigeria’s sovereign wealth fund.
The Excess Crude Account was also the source for funding of fuel subsidy. The government of President Jonathan made an attempt to completely remove fuel subsidy in order to replenish the account. The idea was to divert the fund from subsidy into upgrading and providing of the badly needed infrastructure in the country. Nigerians have been living with inadequate electric power supply, bad roads, defective health facilities and poorly equipped schools. By establishing a sovereign wealth fund, the set aside fund will be prudently invested and the returns put to a good use in building social amenities, but also as a bulwark against a rainy day. Moreover Nigeria’s oil reserve will not last forever; at least a reasonable and quantifiable wealth will be left for future generations of Nigerians.
According to Wall Street Journal, “Nigeria’s $1 billion The sovereign-wealth fund will be overseen by a governing council, made up of members of civil society including representatives from media and academics, that will review its decisions to ensure that the money is transparently invested, she said. is set to start operating in the next few months, said the country’s finance minister Ngozi Okonjo-Iweala, in what would mark a crucial step to help the government finance the revamping of its ramshackle roads and power grids… The sovereign-wealth fund will be overseen by a governing council, made up of members of civil society including representatives from media and academics, that will review its decisions to ensure that the money is transparently invested, she said.”
With Okonjo-Iweala at helm of affairs, she racks in the credibility that will make the project sustainable. The most important thing is to ensure that operation of the sovereign-wealth fund will be efficiently managed and be grounded in transparency. To make the public to be aware of the running of the fund, it may be necessary for the administration to lunch a website that is accessible to Nigerians. The website will delineate and show transactions, investments and returns coming from the sovereign-wealth fund.
Achieving Transparency through checks and Balances
For Nigeria to successfully manage her sovereign-wealth fund, transparency and probity must be underpinning tools that must be present. Transparency is doable and possible when responsible and patriotic Nigerians are called to duty to serve their fatherland by partaking in the running and managing of the fund. The management team will not be isolated to the country’s elite but by casting a wide net many Nigerians from all walks of life will be recruited. From business executives, experts, students, labour Union to market women. It is important that this is done in order to clamp down on cynicism while prompting and enhancing trust. Gathering of Nigerians from sectors of the economy will be an antidote to intellectual laziness which is prevailing among the country’s elite.
Emeka Chiakwelu, Principal Policy Strategist at Afripol, wrote, “Transparency is an important foundation on having and managing a corrupt free sovereign wealth fund (SWF). It is essential that transparency and probity will be the guiding light to our country as we invest our money with the returns to create more wealth. First and foremost, capable men and women of integrity will run and manage the SWF. Some people are so bearish and cynical on Nigeria that they think that Nigerians are devoid of honesty, uprightness and integrity. But the truth is that Nigeria has good men and women who are patriots and will do a good job for our beloved Nigeria. Transparency must be self evident in the sense that it will be open to the public and anybody can be able to access information on the investments and returns.”
Chiakwelu further stated: “The presidency should set up a committee of experts to manage the wealth fund. The Minister of Finance or the Governor of Central Bank of Nigeria may head the committee. The presidency may decide to step outside the confines of the government and appoint nongovernmental bureaucrat to head a commission. But whatever the case might be, by the nature of their roles – minister of finance and governor of the central bank will play active roles in the management of the SWF. It is essential that the committee must comprise of Nigerians from all walks of life including the average Nigerian trader and market women to university professor and government bureaucrats. This is important in order to involve the Nigerian society as partakers and watchdogs. SWF can work for Nigeria when properly managed with transparency and probity.”
Dr. Okonjo-Iweala is a woman of integrity and she will do a good job in assembling men and women of goodwill to manage Nigeria’s sovereign-wealth. One advice for her is to hold her grip firmly on the door knob in order to make sure that unnecessary pressurized intrusion will not obstruct this golden opportunity for Nigeria.
Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa. http://afripol.org. firstname.lastname@example.org