Kachikwu: FG Mulls Saving Oil Revenue in SWF

Kachikwu: FG Mulls Saving Oil Revenue in SWF

 

Minister for State for Petroleum Resources, Dr. Ibe Kachikwu, has said the Federal Government is considering plans to ‘lock up’ revenues realised from the oil sector and save them in the Sovereign Wealth Fund (SWF).

Kachikwu, who made the disclosure yesterday at the unveiling of Heyden Petroleum’s mega petrol station in VGC, Lagos, said efforts were being made to convince President Muhammadu Buhari to buy into the idea in order to save for the future generation.

“We will convince the president to lock up every kobo we have in this country and put it in the SWF and spend something else, so that we can begin quite frankly. When I met with The Netherland Ambassador, he said, today, they have the highest sovereign wealth fund in the world and they have decided that whatever they have from oil, they are not going to spend it; instead they will save every penny of it and rely on the interest and other sources.’’

The SWF was created to manage and invest funds on behalf of the government. The fund, which started operations in October 2012, was set up with an initial $1 billion as seed capital, by the Nigeria Sovereign Investment Authority Act, which was signed in May 2011. Essentially, SWF was established to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians.

Saving oil money in the SWF had been a subject of controversy. Apart from the seed capital, which was contributed by the federal and state governments, attempts to save more oil money in the fund by the administration of the former President Goodluck Jonathan were vehemently resisted by the state governors, who insisted all revenues must be paid into the consolidated revenue fund and shared.
Kachikwu, who attributed Nigeria’s present economic quagmire to her dependence on oil revenue urged the people to go back and look at the resources inherent in other areas and begin to make money for future generations.

According to the minister, rather than rely on oil receipts, government should focus on the interest elements from oil, while leveraging monies from other sources to spend.
‘’There is too much reliance on oil with state governors fighting over allocations and sharing patterns. People must go back and look at the resources inherent in those areas and begin to make money for future generations. For the oil industry, I’m determined to touch anything touchable, whatever can be changed to dramatically change’’, he said.