The major difference between sovereign wealth
fund and consolidated revenue fund is
that experts in fund management would
manage the portion that is meant to be invested.
Other difference include the
following:
i. the sovereign wealth fund seeks to invest a
portion of the excess profit made from
crude oil sales in the sovereign wealth fund to be held and managed by the
Nigerian sovereign investment authority. The authority who is the funds
manager, is expected to invest the funds in a
diversified portfolio of medium and long term investments for the benefit of future generations of
Nigerian citizens while the consolidated revenue fund
management is conduced in accordance with the financial provisions of the
constitution and it is used to meet statutory
expenditures.
ii. The revenue accrued to sovereign wealth fund
will be allocated to three critical areas namely national
infrastructure development, long term
savings and a stabilization fund
whereas the money or revenue accrued to consolidated revenue fund is used to fund appropriation
bills of all the tiers of government.
iii. the sovereign wealth fund is raised by
setting aside 10 percent of the excess
oil revenue for investment every month
by the three tiers of government while
the consolidated revenue fund is the
receipts of the tiers of government from both
the federation account and internally
generated revenue.
iv. the sovereign wealth fund is
a sort of savings for future used since
it is invested in long term assets that
generate a rate of return to accumulate wealth for the next generation of Nigerians while the
consolidated revenue fund is for
immediate consumption since it is to meet
the cost of any purpose for which any sum has been
appropriated in accordance with any Act.
v. the stabilization fund
which is part of the sovereign
wealth fund will protect the
budget by providing a stable last resort
, source fo finance when the budget account is deemed to be insufficient while the consolidated revenue fund does not
vi. the sovereign wealth fund
specifically provides funds for the
development of the nations
infrastructure while the consolidated revenue fund provides funds for other expenditures of the government.
Vii. sovereign wealth fund also curbs wastages in
governance while consolidated revenue
fund does not
viii. consolidated revenue fund is enstrined in
the 1999
constitution of the Federal
Republic of Nigeria while the
sovereign wealth fund is not.
REFERENCE
The worlds most expensive club,
the economist 2007-05-24
Sovereign wealth funds new hedge
fund . the new York times 2007-08-01
Who holds the wealth of nation?
(PDF) Central Banking Journal (May 2005) volume
15, number 4). archived form the original on 2008-05-29 retrieved 2008-09-02
EZEALI B.O and
Nwoba M.O.E (2012) public finance
administration in Nigeria cases and
issues. Chambers books limited Onitsha
Anambra State: Nigeria