By Daniel Idonor
ABUJA — Minister of Finance, Mr Olusegun Aganga, yesterday expressed excitement over the completion of the National Sovereign Wealth Fund, NSWF, bill and its forwarding to the National Assembly for passage into law.
The Minister said the move, when legalised, would not only grow the economy but also provide economic base for future generations of Nigerians, saying it was the best economic decision of the government.
The NSWF Bill was last month approved by the National Economic Council, NCE, National Council of State, NCS, and finally by the Federal Executive Council, FEC, a week ago.
Speaking with State House correspondents, Aganga said the fund, when established, would help stabilise the nation’s oil resources as well as fast-track infrastructure development in the country.
“I am happy to let you know that the Federal Government was able to send the National Sovereign Wealth Fund Bill to the National Assembly yesterday (Wednesday) and you recalled that the NCS had earlier approved the bill. So we are now waiting for the lawmakers to work on the bill and pass it,” he said.
Aganga said Nigeria remained the only Organisation of Petroleum Exporting Country, OPEC, member that was yet to establish sovereign wealth fund.
And noted that with the bill now before the national assembly, the country was on the road to economic stability and huge investment drive.
According to him, other countries like Chile; Russia; Iran; Oman; Kuwait; United Arab Emirate (UAE); Libya; Singapore; Malaysia; Algeria and Saudi Arabia have established SWF using proceeds from their oil and gas surpluses.
The minister said that “the fund if fully established will among other things reduce the country’s vulnerability to significant external shocks resulting from global oil price fluctuation; ensure intergenerational equity; support domestic efforts by investing in critical infrastructure”.
Besides, he added that the fund would also “serve as catalyst for attracting additional local and foreign investment and provide a powerful signalling effect to external investors in terms of enhanced macroeconomic framework, with associated positive impact on Nigeria’s sovereign credit rating and cost of investment capital”.
He explained that the fund will be governed by a robust corporate governance structure in line with the global best practices” adding that the fund “is expected to serve three main purposes; “savings for future generations, economic development of critical infrastructure and economic stabilisation”.
Aganga said the average SWF size of the ‘reasonable peers’ as a percentage of the gross domestic product (GDP) is 15.5 per cent.
Speaking on the desirability of the fund recently, Babatunde Fashola, governor of Lagos state said “the establishment of the fund is an attempt by the government to move from unconstitutionality of the excess crude account to a formal, and constitutional regime”.