By NBF News
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Minister of Finance, Olusegun Aganga, who appeared before the joint committees of the Senate and the House of Representatives on Finance, informed the committees that in its determination to ensure a quick take off of the proposed fund, the National Economic Council, comprising federal and state governments, agreed to set aside $1 billion seed fund already domiciled with the Central Bank of Nigeria, CBN, with a view to reducing wastage from the excess crude account.

Mr. Olusegun Aganga, noted that the initiative will help in curbing wastages in governance, as well as provide funds for the development of the nation's infrastructure and securing of generations yet unborn to benefit from the wealth of the nation's resources.

According to him, 10 percent of the sovereign wealth fund will be devoted for development of infrastructure at the state level and Federal Capital Territory, FCT, stabilization fund for sustenance of the economy, as well as savings fund for future generation.

He explained that the initiative would be run on the Santiago Principle which emphasized transparency and accountability in governance, in line with international best practices.

The minister explained that of all OPEC countries, Nigeria was one of the few that had not set up the Sovereign Wealth Funds Authority, stressing that the fund would be managed by proven asset custodians.

According to the minister, the establishment of the funds provides the country with the opportunity to transform its economy and attract both local and international investment towards the provision of infrastructure, as well as help in making Nigeria one of the leading economies in the world.

The minister noted that the excess revenues accrued from sale of the crude oil would be remitted into the sovereign wealth fund and shared by the three tiers of government when the price of crude oil falls for about four months, noting that the sharing of excess crude account had faced serious criticism from Nigerians for lack of transparency and accountability.

He maintained that the money accrued into the fund would be shared based on the recommendations of the Governing Council and Board of the Sovereign Wealth Fund and that the amount accrued into the account would be process would be published in the national dailies.

Aganga who expressed concern over the huge infrastructural deficit noted that the country has been bedeviled by lack of power and other infrastructure in the country.

Mr Tunde Lemo, the deputy Governor of the Central Bank of Nigeria who represented the governor of the Bank noted that the Authority is expected to use both the initial and subsequent funds to set up the future generation fund, Nigeria infrastructure fund and stabilization fund with a minimum investment of 20 percent of the amount in each of the funds.

'The Authority may declare a distribution (dividends) provided that it made profit across all funds for at least five years following the enactment of the Act and made profit in the year the dividend is to be paid. Besides, the distribution must not be more than 60 percent of the profits of the Authority at the time of the distribution and must be approved by the Governing Council.'

On its part NLC called on the National Assembly to amend relevant sections of the 1999 constitution which could jeopardize the setting up of the fund, noting that the establishment of the sovereign wealth fund was overdue.

Senator Ahmed Makarfi, chairman Senate Committee on Finance stressed the need for clarity in the role of the National Assembly, just as he called for states input into the sovereign wealth fund.

He said the senate would do everything to ensure that the setting up of the fund does not contravene constitutional provisions on the sharing of the Federation account