According to Reuters, Nigeria is “fast tracking” the creation of its proposed National Sovereign Wealth Fund. A committee of three ministers and six governors has been set up to work out the legal framework for a “quick take-off.” Here’s what Ogun State Governor Gbenga Daniel told reporters:
“After some explanations by government officials in today’s meeting, most of the governors shifted position on their earlier stance on the source of funding…By next meeting we will let you know if we have all agreed that the excess crude account can be converted to the sovereign wealth fund.”
It’s encouraging to hear that some headway is being made on the issue, but calling the Nigerian SWF on the “fast track” is a bit misleading. In fact, other sources interpreted this latest news very differently. Check this out:
“For the second time, the Federal Government and the 36 state governors yesterday failed to reach a truce on the source of funding for the proposed Sovereign Wealth Fund which is to be created as a legal replacement for the Excess Crude Account.”
The primary point of contention has always been the source of funding for the new SWF. As I noted in a previous post, the country’s state governors have been unwilling to give up the Excess Crude Account. And for the most part, the stalemate remains. And this brings us back to what are they doing about it:
“…the Council constituted yet another Committee…to again work out the final details for the fund such as the source of funding and legal framework…”
In other words, no tangible progress has been made over the past month. Still, there is a silver lining; all of the political constituencies remain agreed that a SWF is at least necessary – even if they don’t know how they should go about setting one up. According to Governor Daniel:
“The major issue we discussed today was the sovereign wealth fund. This is a fund we have found necessary to put together and we took time to discuss and virtually everybody gave his opinion. At the end of the day it was a consensus that it is something that is desirable, as a matter of fact it is something that we should have done a long time ago, but we said that it is better late than never.”
That’s positive. So, while I wouldn’t characterize the Nigerian SWF as being on a “fast track”, I’d still say the country is making commendable progress. Perhaps slow and steady wins the race.
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