Dr Ngozi Okonjo-Iweala, Finance Minister
By Muhammad Bello
Barely two hours after she laid the 2014 budget proposals to the National Assembly, queries about the propriety of the Sovereign Wealth Fund (SWF), were on Thursday thrown at the Coordinating Minister of the Economy (CME), Dr Ngozi Okonjo-Iweala by the chairman of the House committee on finance, Dr Abdulmumini Jibrin.
Attempts by the House of Representatives to raise pertinent questions about the State of the Economy degenerated into a face-off between Jibrin and the CME, stalling the receipt of on the spot answers from the minister.
The queries about the SWF were part of 50 questions the committee chairman had prepared for the minister. Titled: “State of the Economy”, part of the preamble to the committee's questions by Jibrin was: "you will recall that the Committee on Finance had invited you to appear and make a comprehensive presentation on the state of the economy."
He said, “This invitation has become imperative because of matters senior officers from the executive discuss with us in private regarding the sad situation of our economy and the so called dwindling revenue base is not in tandem with positions they hold in the public arena."
Other questions raised bordered on the economic achievements of this government in 2013, indices growing the economy, success recorded in making necessary cuts, reasons why the economy cannot grow beyond a single digit and reasons for low GDP in comparison to other countries.
Jibrin asked: "shouldn't the presence of Nigerian Sovereign Investment Authority (NSIA) simply mean spreading government's scarce resources thinly? Why will you insist that no matter what we still need to operate a sovereign wealth fund? Sincerely speaking, how sustainable are the objectives of Nigeria's Sovereign Wealth Fund, particularly in the long-term?"
Last month, the House mandated the Jibrin's committee to carry out an investigative hearing to determine the risk arising from the appointment of UBS and Goldman Sachs to manage the Nigerian Sovereign Wealth Fund.
About ten months ago the federal government employed the services of JP Morgan, as the custodian of the $1 billion Sovereign Wealth Fund (SWF), preparatory to the formal take-off of the fund March this year.
Subsequently, UBS and Goldman Sachs clinched the deal to run the fund.
Hon Femi Gbajabiamila, while citing conflict of interest in the initiation of the project by former employees of UBS and Goldman Sachs, who are currently officials of the incumbent administration, expressed concern that the appointment of foreign financial institutions to manage the SWF "amounts to entrusting Nigeria's savings, wealth, economic sovereignty and security in the hands of foreigners, was additionally perturbed that the appointment of the foreign firms preceded the establishment of the Governing Council by an Act of the National Assembly, "thus leaving the House in doubt as to the transparency of the process that led to their appointments."
He stated that "the action taken by the NSIA , if not given a second thought may go long way in empowering foreign institutions against their foreign counterparts, and further entrust Nigeria's Economic sovereignty and security in the hands of foreigners: a situation that would be too dangerous for the nation's economic security.
Okonjo-Iweala had indicated that the apex government would deploy a hybrid strategy that would include some external managers managing some of the funds while some would be run in-house.
The $1 billion fund was slated for allocation three windows and investments, namely: the stabilisation window, infrastructure investment window and the future generation window.