FG Cannot Be Trusted to Manage Sovereign Wealth Fund – Gov. Fashola

Nigeria’s most effective public official, Lagos State governor, Babatunde Fashola  has said the Federal Government cannot be trusted to manage judiciously the monies saved in the Sovereign Wealth Fund. He cited this as the reason it is difficult for the Governors to give the project their backing.

Babatunde Fashola disclosed this at the 3^rd Annual Pan African Investor Conference organized by Renaissance Capital.

According to Fashola, “These really are the issues. It is not that the governors are up in arms against the idea of savings. But we are asking what the rules of engagement are and do those rules of engagement work within the rules that bind all of us?”

He added: “Which funds are you saving? Are they yours or are they mine? Before you save on my behalf, there is also the need to address the issue of trust. How efficiently have you managed the funds that the federation has put in your trust? And what makes you the better saver and better investors. “

Fashola also questioned the legal framework behind the Sovereign Wealth Fund highlighting the fact that the account lacked constitutional backing.

He posed, “Is the saving done within an expectable framework of the constitution?… The excess crude account has no constitutional legality.  And I think in trying to find a way around that, we create another solution that will be subject to constitutional scrutiny. And indeed, can we, therefore, build an economy whose constitutional scrutiny is questionable?  And until these issues are resolved, there are risk issues for investors.”

He made it plain that governors manage the idea of savings, however what is under question is how monies are saved and who does the saving on behalf of the others.

“Now, even in our domestic economics that we do in our homes, it is known that you cannot consume everything that you produce. There must be some sense of savings and investments. Before you save on my behalf, there are also issues of trust. How efficiently have you managed the one that the federation has put in your trust and what makes you the better saver and the better investor. And is this a savings that is to be made within the acceptable framework of the constitution? Those are the issues around the SWF and I think people should understand them,” he said.

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