FG to increase SWF to $5bn in 3yrs
By MICHAEL EBOH, WITH AGENCY REPORT
Despite opposition from state governors, the Federal Government yesterday, said it will increase the value of the Sovereign Wealth Fund, SWF, to $5 billion within three years.
Speaking in an interview in London, Yerima Ngama, Minister for State for Finance, said the government may issue a planned $1 billion Eurobond and a $500 Diaspora Bond after the National Assembly works out details.
He disclosed that the National Assembly has already approved the borrowing plan, adding however, that it still needs to streamline certain areas.
He said the government plans to issue the bonds in the first half of the year, adding that the government was considering the expansion of the Board of the SWF to accommodate the interest of the state governments who are currently against the fund.
According to him, differences between the Federal Government and state governors, which have delayed additional transfers to the fund, may be resolved soon by expanding the representation of the states on the board of the sovereign wealth authority
He said, “once we look at the board and say, okay, state governors, bring your own representatives on the Board; I think it will solve it.”
Ngama projected an expansion in Nigeria’s economic output by 6.7 per cent this year, in line with the estimate of the International Monetary Fund, IMF.
The state governors had displayed stiff opposition for the SWF, saying their resistance for the SWF and the Excess Crude Account is borne out of distrust for the Federal Government’s ability to judiciously manage the funds and utilise it for the purpose it was meant for.
The governors said their apathy stems from the fact that the fund lacks the necessary constitutional backing, explaining that until the controversial issues surrounding the fund are addressed, it will continually be seen as a high risk venture by investors.
Commenting on the issue, Governor of Lagos State, Mr. Babatunde Fashola, said, “These really are the issues. It is not that the governors are up in arms against the idea of saving. But we are asking what the rules of engagement are and do those rules of engagement work within the rules that bind all of us.
“Which fund are you saving? Are they yours or are they mine? Before you save on my behalf, there is also need to address the issue of trust. How efficiently have you managed the funds that the federation has put in your trust? And what makes you the better saver and better investors. And is the saving done within an expectable framework of the constitution?
“Those are the issues surrounding the Sovereign Wealth Fund. For instance, the excess crude account has no constitutional legality. And I think in trying to find a way around that, we create another solution that will be subject to constitutional scrutiny. And indeed, can we, therefore, build an economy whose constitutional scrutiny is questionable? And until these issues are resolved, there are risk issues for investors.”