There has hardly been any issue that has generated controversy between the Federal Government and the states in recent times as the issue of the Sovereign Wealth Fund.Since the FG came up with the idea of the fund, it has spawned several controversies between the two tiers of government.A SWF, according to Wikipedia, is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments.SWF is simply a state savings which is invested for the purposes of future and investment returns.The structure and scope of investments of a SWF depend on the circumstances of each nation as well as what the enabling law setting up the fund permits. SWFs usually have long-term investment focus. However, their objectives might include providing liquidity stabilisation funds as well as the funding of vital economic infrastructure.SWFs have been around for decades but since 2000, the number has increased dramatically. The first SWF was the Kuwait Investment Authority, a commodity SWF created in 1953 from oil revenues before Kuwait even gained independence from the United Kingdom.The Nigerian SWF bill which was signed into Law by President Goodluck Jonathan on May 27, 2011, with $1bn seed capital, replaced the Excess Crude Account and is expected to address the issues associated with Nigerias excess liquidity arising from crude oil sales.In the past, surplus earnings from crude oil sales were held in the ECA and when there was budget revenue deficit, funds were withdrawn from the ECA and disbursed to all the three tiers of government.Since the proposal of the Fund by the then Minister of Finance, Mr. Olusegun Aganga, there have been a series of arguments put forward by stakeholders regarding the positive and negative effects of the Fund. Prominent among the critics of the SWF are the state governors.The governors under the aegis of the Governors Forum have continuously challenged the action, conduct and activities of the FG with respect to the management and operation of the Federation Account.The governors have hinged their opposition to the SWF on its constitutionality, saying that section 162 of the 1999 Constitution, which establishes the Federation Account, requires that such excess funds should be put into the Federation Account and shared.The governors also contended that given that their roles are increasing, especially with the newly introduced national minimum wage, they need all the money they can get in order to perform their duties.However, FG has claimed that the feedback obtained by government is that Nigerians strongly support saving for the future and the other objectives of the fund which include investment in strategic infrastructure and building of a buffer against shocks such as the current global financial crisis.Meanwhile, analysts have expressed different views on the fund which is expected to serve as a saving fund for future generations, an economic stabilisation fund and an infrastructure fund.The Chief Executive Officer, Vintage Wealth Managers Limited, Mr. Idowu Ogedengbe, said the idea of establishing a SWF was fantastic and commendable.He, however, said the process and operational modalities of the funding should be ironed out between the two tiers of government.The SWF is laudable but the FG cannot singularly take any decision that is binding on the other tiers of government. It is wrong to take any decision without consulting the governors. The problem between the governors and FG is lack of trust, he said.The Chief Research Analyst, Stakes Capital, Mr. Sanyaolu Kehinde, however said the SWF was just a new way of siphoning funds.There is nothing wrong in saving for the future, but I do not trust the government because its still the same government that will manage the fund. Also, the state governments keep complaining that they dont have enough, what have they done with the funds at their disposal' The whole crisis between the governors and FG is not to enhance the welfare of the people but to put additional money into their pockets, he said.
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