By Emeka Anaeto, Emma Ujah and Peter Egwuatu in Washington DC
THE International Monetary Funds, IMF, may have run into difficulties with its positions on the management of Nigeria’s Oil revenue as the officials indicate that the Fund’s negative verdict was based on the country’s Excess Crude Account, ECA, and not the Sovereign Wealth Fund, SWF.

Christine Lagarde, IMF President and Zainab Ahmed, Minister of Finance

ECA refers to the portion of the oil revenue above the approved budget benchmark price which is in-appropriated while the SWF refers to the investment funds pooled from the ECA and managed by the Nigerian Sovereign Investment Authority, NSIA.

IMF in its Fiscal Monitor Report released mid-week at the on-going World Bank/IMF Spring Meetings in Washington DC, United States of America, had ranked Nigeria as the second worst country in the world in the use of Sovereign Wealth Funds.

The Bretton Wood institution had said the index was compiled using the corporate governance and transparency scores of the Sovereign Wealth Funds and the size of assets as a percentage of 2016 GDP of the countries considered.

But contrary to what is stated in the report which specifically mentioned Sovereign Wealth Funds, Mr. Abebe Selassie, the Director, Africa Department, IMF, told a group of Nigerian journalists on the sidelines of the World Bank/IMF meeting yesterday that the Fund’s reference was to ECA.

He stated: “I want to be precise on this issue because I have heard a lot of noise concerning it. There have been two Sovereign Wealth Funds in Nigeria. There have been the Excess Crude Account (ECA), and the Nigeria Sovereign Investment Authority (NSIA).

The NSIA has been run transparently and best on standard best practice and it has been doing a good job.

“The concern that we have is about the ECA, because if you recall that the ECA economically was set up to save resources when oil prices are high, and to be drawn on when oil prices are low. We do not think that the ECA has been doing effectively enough job that way.

“Because you see, when oil prices fell, the economy was very hard in the last couple of years, we feel like much better job could have been done, saving enough more in the ECA when oil prices were at $100 and $120 per barrel”.

https://newlive.vanguardngr.com/2019/04/imf-reports-on-nigerias-sovereign-wealth-fund-not-reflective-of-our-role-impact-nsia/

Also, Mr Amine Mati, the IMF’s Senior Resident Representative and Mission Chief for Nigeria, issued a statement yesterday clarifying the Fund’s position, saying: “In view of recent local media reports, I would like to clarify that the reference to the Sovereign Wealth Funds (SWF) included in Figure 2.16 of the IMF’s Fiscal Monitor showing a low ranking for Nigeria does not refer to the Nigerian Sovereign Investment Authority (NSIA).

The NSIA is a Sovereign Wealth Fund that has worked extensively with development partners to ensure it is applying transparency practices that are aligned with the Santiago Principles of transparency, good governance, accountability and prudent investment practices.”

“The figure in the IMF’s Fiscal Monitor reports a score prepared by the Natural Resource Governance Institute (NRGI), which assesses the corporate governance and transparency of SWFs around the world using a methodology outlined in the referenced NRGI publication.

For Nigeria, that SWF reference focuses on the Excess Crude Oil account, which requires greater transparency on the rules governing deposits, withdrawals, and investment.”

As at last month the balance in the ECA was $183 million (N65.9 billion) indicating a huge decline from the $3.5 billion (N1.26 trillion) as at October last year.

https://newlive.vanguardngr.com/2018/12/fg-plans-new-taxes-to-fund-2019-budget/