Nigerian President Goodluck Jonathan on Monday said he has proposed a legislation that seeks to improve the management of the country's oil revenue through a special fund for savings and infrastructure.
Jonothan’s proposal to create a sovereign wealth fund which comes ahead of January elections would replace an existing arrangement in which government put excess crude revenue in a savings account.
"I have forwarded a bill to the National Assembly to create a National Sovereign Wealth Fund to ensure that we have the legal underpinning for national savings and also have the fund act as a vehicle for attracting and channeling capital flows to critical infrastructure," the AFP quoted the Nigerian president as saying.
Curbing corruption in oil proceeds management
Speaking on the president’s proposal, a business and economic reporter with Voice of Nigeria said the move would curb corruption and improve transparency in the management of proceeds from the country’s oil sector.
“Its an economy based instrument to save some embarrassing situation... we all know over time that whenever you want to look into the funds of the Nigerian National Petroleum Corporation, NNPC you tend not to find anything concrete on the debit and credit side of the account,” Acheme Jack said.
He said the current arrangement in the management of the country’s oil revenue was yet to yield the desired results due to insufficient monitoring in the 8th world’s largest oil producer.
“Most times when this money comes from the excess crude account and is shared to the three tiers of government, they claim that they use the money for development, including infrastructure; but did we ever get to see? No! Because nobody is completely in charge of that expenditure and because there is no monitoring scheme.”
Infrastructure and economic growth
The financial journalist said, if properly implemented, the president’s oil funds management plan for the oil sector would improve infrastructure and grow the Nigerian economy.
“The greatest enemy of development is lack of infrastructure, because the huge capital involved is unimaginable to the private sector to finance...so in a situation where we have a dedicated fund for infrastructure and it is well spent you can imagine what the economy will turn to.”