By Daniel Idonor
THE National Economic Council, NEC, met yesterday amidst sharp disagreement between the Federal Government and the 36 state governments over the conversion of the Excess Crude Account, ECA, into the proposed National Sovereign Wealth Fund, NSWF.
The meeting which lasted four hours was presided over by NEC chairman, Vice-President NamadiÂ Sambo, with almost all the governors present or represented by their deputies, ministers of the Federal Capital Territory, National Planning and Finance, as well as the representative of the Governor of the Central Bank of Nigeria in attendance.
The Federal Government, Vanguard, learnt, through the Minister of Finance, Mr. Olusegun Aganga, had in a memo to NEC proposed that the controversial ECA be converted into NSWF, thereby bridging the age- long gap between Nigeria and the rest of Organisation of Petroleum Exporting Countries, OPEC,Â as Nigeria remains the only OPEC member without such a fund.
Aganga, who briefed the NEC, which was presided over by Sambo, on the follow-on discussions on the establishment of NSWF, at the Presidential Villa, Abuja, noted that â€œNigeria remains the only OPEC country without SWF.â€
The minister, in the presentation to NEC, said,” NSWFâ€™s initial source of funding should predominantly be the excess crude account, ECA.â€
He noted that â€œthe fund, if fully established, will, among other things, reduce the countryâ€™s vulnerability to significant external shocks resulting from global oil price fluctuation; ensure intergenerational equity; support domestic efforts by investing in critical infrastructure; serve as catalyst for attracting additional local and foreign investment.
“It will also provide a powerful signaling effect to external investors in terms of enhanced macroeconomic framework, with associated positive impact on Nigeriaâ€™s sovereign credit rating and cost of investment capital.”
However, the governors appeared not favourably disposed to the idea of scrapping the excess account, as it has become the last resort for the three tiers of government, especially whenever there is paucity of funds, resulting from unexpected fall in the price of crude oil in the international market.
Fielding questions from journalists, Aganga said â€œin times of timing which is your major concern the intention is that within two weeks we have feedbacks from all the sectors and this is a very important initiative and therefore it is important that we consult with all the key stakeholders so the state governors want to consult and they will come back to a committee of governors and together we then meet as a committee of the Federal Government which will include the governors of CBN, the Minister of National Planning, and myself as Chairmanâ€.
On the source of funding, Aganga said that â€œyou will recall that this has been on the table since 2008 and over the period, that the consultations about the legality or illegality of the excess crude account which is one of the reasons why there was a school of thought that you make it legal or more legal by the haven that fundâ€.
According to him, â€œthe primary reason for the sovereign wealth fund, the concept for a country that big infrastructural deficit to have a fund a fund like a sovereign wealth fund, that case has been madeâ€.
He stressed that â€œthe issue is how do we fund it, where will it come from, it should not be tied exclusively to the excess crude accountâ€, adding that â€œthe concept itself is there, we will talk about ways of talking it and we will talk about modalities in governance and other structural issues and that is what we have to do in the next two weeksâ€.
Also speaking Governor Gabriel Suswan of Benue State disclosed that feedbacks will be expected from the series of consultations that begin immediately, saying that â€œSo the feedbacks from all the consultations we expected to be ready in the next two weeksâ€.
â€œThe composition is headed by the Chairman Governorsâ€™ Forum and six other governors each representing a zone. We will meet with the minister of finance and his federal team to take the input from states so as to make another presentation in the next two weeksâ€, he added.
Other matters discussed at the meeting are the employeesâ€™ compensation fund, and the Universal Basic Education (UBE) funding which some states have not been able to meet up with in terms of payment.
Meanwhile, Vice President Sambo had urged the governors of the 36 states to ensure the speedy dispensation of justice to prisoners who have been condemned to death by either carrying out their execution as pronounced by court judgments or commuting same to life sentence, without further delay.