Sovereign wealth fund is a state
owned investment fund composed of financial assets such as
stocks bonds, properly, precious
metals or other financial Entrustment.
It is just like savings account
where the profits from excess crude oil will be saved . the only difference between sovereign wealth
fund and excess crude account is that experts in fund
management would manage the portion that
is meant to be invested.
The 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 investment authority . The authority who is the fund 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. Funds for the portfolios
will be constricted by the federal, state and local governments.
In accordance with the Nigerian sovereign
investment authority (NSIA) Act, the three
of government will set aside 10
percent of the excess oil revenue for investment every month. The NSIA would then allocate the revenue to three critical areas namely, national
infrastructure development, long term savings and a stabilization fund.
The funds set aside for future generations will build an intergrenerational
savings base by investing in long term assest that generate
a rate of return to accumulate wealth for the next generation of Nigerians while the
stabilization fund will protect the budget by providing as table last
resort source of finance when the budget
account is deemed to be insufficient
The advantages of the new saving
scheme include curbing wastages in governance and providing funds for the development of the nations infrastructure
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