From: Kemi Yesufu and Ndubisi Orji, Abuja
The House of Representatives may have joined other financial experts to back the call for sustainable and frequent injection of funds into the Sovereign Wealth Fund (SWF) account.
The stakeholders converged at the public hearing on the amendment of the Nigerian Sovereign Investment Authority (Establishment Act) 2011, held at the instance of the House Committee on Banking and Currency, and presided over by Chairman of the committee, Hon. Jones Onyereri.
They all stressed the need to amend the 1999 Constitution with the view to checkmate politicisation of the scheme.
Speaking earlier, Onyereri stressed the need to restore the sovereignty of the Naira as a national currency and ensure transparency of its funding and entrench parliamentary accountability.
Other lawmakers also emphasised the need for the Legislature to approve the injection of fresh funds into NSWF.
In his presentation, CBN’s Head of Legal Department, Kofo Alada, urged the House to amend section 28, 29 and 30 of the NSIA Act and section 80 of the 1999 Constitution in the bid to ensure adherence to sustainable funding of the Sovereign Wealth Fund.
Alada who applauded the initiative, noted that Nigeria “has not lost the opportunity to put things right, adding that the proposed funding, “can be monthly, this can be annual. I believe that there are certain states where something similar were created.”
He, however, opposed the proposed amendment to section 29(1 & 2) of the SWIA Act, to convert the $1 billion to Naira equivalent, stressing that such move could send wrong signal to the international community.
In Alada’s words, “Owing to the nature of the foreign investment requirements of the Authority, the denomination of the seed funding in United States dollars is in line with best practice amongst sovereign wealth funds all over the world for Monetary convertibility reasons.
“Furthermore, countries prefer to invest their sovereign funds abroad to cushion the effects of fluctuations on the domestic economy and also to avoid the ‘Dutch Disease’ phenomenon, whereby excess liquidity from revenue earnings lead to overdependence on one sector,” Alada stressed.