23 May 2013
Nigeria will begin spending $1bn of its new sovereign wealth fund – financed by oil and gas revenues – by June, after being delayed twice by political opposition since December last year.
Nigeria’s Sovereign Investment Authority announced on Monday it would allocate 32.5 per cent of the fund to infrastructure, the same amount to a savings pot for future generations, and 20 per cent to protect against gas and oil price shocks, with 15 per cent unallocated, according to Reuters.
Nigerian gas on route to Europe. (Credit: Cline)
Nigeria, Africa’s biggest oil producer and second biggest economy, is one of only three OPEC members without a sovereign wealth fund (SWF) set-up.
The federal government has faced strong opposition from state governors who want oil profits to be invested in projects and have so far this year reduced the SWF to $5.87bn from a $9bn Excess Crude Account, which the SWF replaced.
Analysts say the SWF will put the oil savings on a better legal footing to protect against politicians’ competing demands for the cash.
Click here for the Reuters article.