SOVEREIGN WEALTH FUND WILL ACCELERATE INFRASTRUCTURE DEVELOPMENT -AGANGA
Minister of Finance, Dr. Olusegun Aganga, has said that the establishment of the Sovereign Wealth Fund (SWF) would help fast-track the development of infrastructure and also help establish financial discipline in the country. Aganga told State House Correspondents in Abuja yesterday that the fund was responsible for the over-subscription of the Euro Bond issued earlier in the year by Nigeria.
'It was one of the reasons the international investors bought our Euro Bond. It was one of the reasons, when you look at Fitch revised outlook, it was one of the things they identified that we need to have in place for them to give us a positive outlook on our economy. So, I cannot over-emphasise the importance of this fund,' he said.
The minister said: 'There are a number of benefits, one, it is going to introduce transparency and accountability in how we manage our financial resources, that will be very clear to everybody, that is one area Nigerians and non-Nigerians have concerned with. It is going to strengthen our fiscal framework, meaning that we depend solely on oil and you know that oil prices are so volatile and because they are very volatile, you cannot rely on that only until we fully diversify the economy.
'Which means that we have to have something in place to cushion that and the stabilization element of the fund would be there to provide the augmentation we need when we have dip in oil price. It will strengthen our fiscal framework, reducing or minimising the risk we have as a country, in terms of managing our revenue profile,' he said. Enumerating more benefits of the fund, , Aganga said, 'the third area, which is very important, is the area of development. Meaning that one of the things that had been a major constraint to the development of our economy and country is infrastructure deficit, which we have. The third box will be there for investment in local infrastructure. So, it is going to act as a catalyst for both local and international investors and other sovereign wealth funds to come into the country and invest in local infrastructure, which will help us diversify our economy'.
'The third box is service, which is savings for future generation of Nigeria. Which is, we recognise that our children and grandchildren have the rights to benefit from what we have today. In a nutshell, it is converting a finite asset into wealth and tool for development. We should all be excited about it. All Nigerians should embrace it and make sure that it is fully implemented in the right way,' he stated further. He commended 'The vision of the leadership, the President, the state governors, who supported this action from the beginning, the National Assembly, for passing it and passing it so quickly'.
Aganga stated that the bill 'is one of the fastest bills, that we have seen go to the National Assembly and that was concluded within a five-month period. It was submitted in December. It is the fastest bill. It is so important to Nigerians and to international investors'.
On when the fund would fully become operational, Aganga said: 'The National Assembly has now passed the bill, which is the biggest milestone. It is important that Nigerians embraced it because it belongs to Nigerians and anyone who is making it difficult for us to do this should be seen as someone who probably doesn't embrace all those ideas. The national assembly has just passed the bill. We need to get the document out as quickly as possible from the National Assembly and get it to the President for signing'.
He said: 'We are planning to have all that signed before the end of this administration. So, it is going to be as soon as possible, before the end of this administration. That is the aim that is the aspiration. Once that is done, the next step is for the finance minister to constitute a selection committee. We want to make sure; I am particularly keen that whatever we do here the process is opened and transparent'.
'We cannot afford to get the implementation wrong. Therefore I will set up a selection committee, which will be responsible for nominating members of the management board. Those names will be recommended to the president and he will make the final appointment and the senate will ratify them'.
'That is the process, it will be opened, transparent, so that we bring the best people to manage the fund, to manage our resources because that fund, although its held by the state government, local government and Federal Government, but it is on behalf of Nigerians. It is a tool for Nigeria to help turn finite asset into wealth and a tool for development,' he said.