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| Last Updated: Jan 19th, 2012 - 11:25:19 |
National Economic Council
NEC meets, creates National Sovereign Wealth Fund
Apr 21, 2010, 17:15
| | The National Economic Council, the statutory body comprising the Acting President, Governors of the 36 states, Ministers of Finance, National Planning and Governor of the Central bank of Nigeria, met on Tuesday April 20 in the Presidential Villa and approved the creation of a National Sovereign Wealth Fund (NSWF) to replace the current Excess Crude Account (ECA).
Finance minister, Mr Olusegun Aganga, who briefed the media on the outcome of NEC meeting, alongside his National Planning counterpart, Dr Shamsudeen Usman as well as Governors Gbenga Daniel of Ogun State and Theodore Orji of Abia State stated that the NSWF, which is expected to legally manage the nation’s extra earnings from higher prices of crude oil, is meant to be a robust institutional framework and strong fiscal policy for managing excess crude earnings.
He said adding it will also support the development need of the country, as it will facilitate the investment of part of that portfolio in critical infrastructure.
Mr Aganga disclosed that the NSWF will also have a component that would be almost like stabilization fund as it would be another pool which will be a saving pool for future generations.
The whole idea he said is that it is absolutely irresponsible for the government to spend all the revenue generated as there is a need to provide for the future adding that the idea which is to de- emphasis sole reliance on oil will be presented to the council next week and it is expected to be in the right position within the next two to three months.
The Minister recalled that the ECA, which has no legal backing, was a creation of the former administration aimed at saving some of the funds accruing to the nation as a result of the rise in the price of crude oil, while noting that though the NSWF is similar to the ECA, the new arrangement will have legitimacy rather than being a product of political and economic expediency.
He observed that all members of the Organization of Petroleum Exporting Countries (OPEC), except Nigeria, have a Sovereign Wealth Fund and that even though the idea was discussed by the Council about two years ago, policy inconsistency in government delayed its implementation.
He however expressed delight that already there was a presidential committee set up by the Acting President which has been looking at this adding that the intention is for the NSWF to be funded by the current earnings in the excess crude oil account.
Governor Daniel stated that: “the Council resolved that states should do away with tax consultants or collectors and rather empower their state boards of internal revenue to do their professional duties while the federal government properly coordinates and implements national tax policies” he said.
He disclosed further that NEC resolved to assist states to access the over N31 billion Universal Basic Education Commission (UBEC) Fund that is currently lying fallow in the coffers of the Commission because many states could not provide the 50 per cent matching fund adding that the Council has now agreed that the Fund should now be made available to commercial banks that will lend it to the states at single digit interest rate.
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