Senate seeks first line charge for Sovereign Wealth Fund

A Bill to amend the Act on accruals to the Federation Account passed Second Reading on the floor of the Senate on Wednesday.

Tagged, “A Bill for an Act to amend the Allocation of Revenue (Federation Account etc.) Act CAP A 15 LFN 2004 and for Other Related Matters”, it was sponsored by Senator representing Akwa Ibom North-East, Bassey Akpan.

Senator Akpan in his lead debate said the proposed amendment would make the Nigeria Sovereign Investment Authority (NSIA), a first-line charge beneficiary of the Federation Account for saving purposes.

He further revealed that the amendment would also increase funds available to the agency by deducting 20 per cent of the total earnings to the Federation Account.

He said: “The Bill seeks to amend section 1 of the principal Act to provide for additional funding for the Nigeria Sovereign Investment Authority by including it as a first-line charge beneficiary of the monthly distributable funds from the Federation Account.”

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He recalled that the Senate had earlier proposed an amendment to Section 162(3) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) to provide for the inclusion of the NSWF established under the NSIA (Establishment, Etc.) Act in the distribution of any amount standing to the credit of the Federation Account.

“We had equally proposed an amendment to sections 30(1) and 47(2) of the Nigeria Sovereign Investment Authority (Establishment, Etc.) Act Cap A 15 Laws of the Federation,2004 to provide additional funds for the SWF through a statutory allocation of funds from the monthly revenue accruing from the Federation Account.

“This is aimed at strengthening the operations and withdrawals from the SWF by the Federation to further boost the confidence of the Federating units in the operations of the Fund to the benefit of all.

“The bill proposes an amount (equivalent to 20 per cent of the amount Standing to the credit of the Federation Account, less the statutory 13 per cent of the revenue accruing to the Federation Account directly from natural resources,) to be allocated to the NSIA on monthly basis.”

In their individual contributions, other lawmakers described the Bill as laudable and timely as they restated the importance of a sustainable and substantive saving culture to shield the nation monocultural economy from the volatility of the global oil market.

They, however, expressed reservations over the 20 per cent deduction as they argued that the fragility of the nation’s economy might impede its sustainability.

President of the Senate, Ahmad Lawan, however, advised that the decision on the percentage of deduction be left open to stakeholders at the public hearing.

NIGERIAN TRIBUNE