SWF: Okonjo-Iweala denies friction with governors

Minister of Finance, Dr. Ngozi Okonjo-Iweala, has denied the existence of a conflict between the Federal Government and the state governments over the controversial Sovereign Wealth Fund.

 

Okonjo-Iweala, who is also the coordinating minister for the economy, on Thursday said the Federal Government had implemented the plan after extensive consultations with the governors.

Okonjo-Iweala made the clarification in Abuja at a conference organised by the Economist Conferences, a division of The Economist Group, publishers of The Economist newspaper.

At another forum in Benin, Edo State, Governor Adams Oshiomhole, confirmed that a few state chief executives were consulted before the Federal Government launched the SWF with a N150bn initial deposit.

"The Minister of Finance, Dr. Ngozi Okonjo-Iweala, to be fair to her, consulted a few of us governors before the Sovereign Wealth Fund was launched. We gave our support for the launch of the Sovereign Wealth Fund. It was done with our consent, and it wasn’t done in spite of us," Oshiomhole said at the opening of the 15th Annual Conference of the Institute of Nigerian Stockbrokers in Benin City.

The finance minister told participants at the Abuja conference that the Federal Government viewed the SWF as a strong instrument for saving and investment and so would continue to discuss with those who hold opposing views on the fund.

She said, "We need to think of saving for the future and that was why in the beginning, we started the Excess Crude Account.

"We discovered that that account was not underpinned on legislation and we built on that for the SWF. We have been discussing with the governors who said they have needs to meet.

"When we started the Excess Crude Account, there was debate too. If not for that account, the country would not have made through the financial crisis of 2007/2008."

She insisted that fuel subsidy weighs heavily on the budget and it does not benefit the poor.

Okonjo-Iweala, however, lauded the ongoing debate on the desirability or otherwise of the removal of the subsidy, saying that the best decision would be taken at the end of it all.

She assured stakeholders that whatever resources accrued to the government based on the removal would be spent on things Nigeria could see.

The minister said that the government was working hard to reduce recurrent expenditure from the current 74 per cent to less than 70 per cent.

She said biometrics was currently being used to weed out ghost workers and ghost pensioners.

She explained that the money freed up in the process would be spent on infrastructure.

Earlier, the Africa Editor, Economist Intelligence Unit, Katharin Pulverinacher, had identified the SWF, minimum wage, crime, corruption and inflation as some of the current challenges facing the country.

Pulverinacher observed that dire state of infrastructure had continued to constrain growth in the manufacturing sector.

She however said that many of the constraints identified could be weakened with political will and improved technology.

This, she added, would enable Nigeria to achieve her dream.

In Benin, Oshiomhole said that a more sustainable approach to saving should involve deducting an agreed percentage of national revenue, irrespective of fluctuation in oil price, for future development.

"Saving only when there is excess crude money is not sustainable," he said. "It is an ongoing discussion. I believe the matter will still be discussed at our next joint meeting."
Written by  Olalekan Adetayo               Courtesy Of: Punch