The Central Bank of Nigeria ( CBN) yesterday asked the National Conference to provide constitutional backing for the Sovereign Wealth Fund (SWF).
The apex bank highlighted the necessity for the country to save for the rainy day.
The bank also said there was need for the creation of the office of Accountant-General for Federal Government which would be separate from the existing office of the Accountant-General of the Federation (AGF).
Acting Governor of the apex, Dr. Serah Alade, who made the demand while the National Conference Committee on Public Finance, invited her for a chat, noted that it was necessary to invest for the future.
Alade was represented at the briefing by the bank’s Deputy Governor, Corporate Services, Alhaji Suleiman Barau.
Alade said: “Nigeria’s Sovereign Wealth Fund was intended to replace the Excess Crude Account (ECA) in order to provide long term savings for economic stabilisation, infrastructural development and generational equity.
“The ECA has been criticised as a mere arrangement based on a memorandum of understanding among the three tiers of government, thus necessitating the need for a constitutional backing for the SWF to provide for a stable long term saving to address the country’s infrastructure challenges, provide stabilization fund against the volatilities in oil prices/revenues and ensure generational equity.
“This has been the basis of continuous demand to draw to meet budget shortfalls in the form of argumentation. It is thus, imperative to give constitutional impetus to the SWF established by the Federal Government.
“We can no longer afford to continue to live from hand to mouth. Public sector savings have become the norm for resource-rich, resource-dependent economies and Nigeria should not be an exception. We must save for today and for future generations.
“The consequences of operating the federation account as zero account could be mitigated by creating savings for the future generation, enhancing macroeconomic management, and improving economic planning. “Therefore, it is necessary to entrench the excess crude account which can be managed and invested by the CBN. In addition, the SWF could be included in the constitution.”
The CBN boss warned that the lack of appropriate constitutional mandate to create the SWF, poses operational challenges, which has been the basis for legal contests by the sub-national governments.
She said: “Our position is that there are rational and emotional sides. Rational side is that everybody saves. “Life is an investment that you have to have. On the emotional side, government should provide the structures to help the private sector. Government cannot employ everybody. May be we need to downsize. May be, the issue is still debatable.”
Chairman of the committee, Senator Adamu Aliero noted that though SWF policy was not yet in the constitution, it was still necessary to save.
He said: “It is true that there is no constitutional provision for the SWF, but we have to save for the rainy day. We will recommend to the main body the importance of including it in the constitution. There is a suit now challenging the constitutionality of the SWF. We have to save for the rainy day. Your recommendations are in tandem with the recommendations we received from other revenue agencies.”