25 October 2011
The federal government, last week, announced that it had commenced the implementation of the Sovereign Wealth Fund (SWF) with a seed capital of $1 billion from the Excess Crude Account (ECA).
This negated the claim of the Nigerian Governors
' Forum that establishing the Fund was not only illegal, unconstitutional but that it was out of place for the federal government to dictate to them how to spend their resources. We are in support of the FG on this issue because of the potential to bolster economic stability and the might of the Naira.
The ECA, now transformed into the SWF, would close budget deficits that are a product of oil price volatility and to potentially fund domestic investment in infrastructure.
We believe that with the approval on May 11, 2011 by the Senate of the Nigeria Sovereign Investment Authority Bill (2010), the SWF has an unimpeachable legal seal.
Nigeria was one of three Organisation of Petroleum Exporting Countries (OPEC) member states not to have a sovereign wealth account, others being Ecuador and . Iraq