Nigeria senate mulls sovereign wealth fund plan
Reuters states, “Nigeria’s Senate is working on legislation to create a sovereign wealth fund aimed at softening any impact falling oil prices may have on the OPEC member’s economy, the finance minister said on Wednesday. Mansur Muhtar told Reuters a presidential committee of top Nigerian economic advisers had sent lawmakers a draft proposal for the fund after deliberating on it for more than a year. The fund could allow a certain percentage of the nation’s revenues to be invested in international markets, providing protection during a downturn in oil prices. Nigeria, sub-Saharan Africa’s second biggest economy, has around $41.6 billion dollars in foreign exchange reserves, the central bank said on Tuesday.
‘The senate is now working on the proposals made by the presidential committee with a view to coming out with a legislation that will guide and empower the government in setting up the fund,’ Muhtar said before a cabinet meeting.
Resource-rich countries from Saudi Arabia to Norway established multi-billion dollar state-run funds, which invest in foreign stocks, bonds and other financial instruments, to help diversify their holdings. Nigeria’s economy still depends largely on the rise and fall of volatile oil markets, which have traded between $100 and $34 in the past 12 months. Africa’s most populous country depends on oil and gas income for more than 80 percent of its revenues. But the idea of public money being invested overseas has sparked some concerns in a country struggling with power outages, decrepit roads and underfunded hospitals and schools.”
read more: Reuters
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