Nigerian governors oppose sovereign wealth fund

Tue Jun 15, 2010 8:28pm GMT

* Governors do not want excess crude account replaced

* Aganga says sovereign fund would have firm legal basis

By Felix Onuah

ABUJA, June 15 (Reuters) - Nigeria's state governors on Tuesday voiced opposition to having a sovereign wealth fund manage the country's oil wealth, an early sign that new Finance Minister Olusegun Aganga will have to fight for reforms.

Aganga has championed the idea of a sovereign fund to help Africa's most populous nation save some of its oil revenues for the future, invest in critical infrastructure and help stabilise the OPEC member's finances when world oil prices are volatile.

He wants the fund to replace the current arrangement by which Nigeria saves oil revenue above a benchmark price into an excess crude account (ECA), a pillar of reforms launched in 2003 and backed by the International Monetary Fund that had the same aims.

But there is no clear legal basis on which to determine how the savings in the ECA should be shared between the tiers of government -- federal, state and local -- leading to constant political wrangling and the squandering of much of the money.

State governors have been among the main beneficiaries of disbursals from the account.

Aganga has said a main aim of the sovereign wealth fund would be to establish a firm legal framework for the management of Nigeria's windfall oil savings.   Continued...

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