paddy_lo:

@Gbawe and others

Jonathan has proposed the set up of a Sovereign wealth fund. .$1billion of this money was withdrawn for that purpose

Now this $20billion u talk of is from 2007 till now. .

well the blame rests on yaradua,and the world financial crises.

However even if u look at it. . its about $6billion a yr shared btw the 36states and FCT in 3.5yrs

So go to the states and ask them what they did with it.  .

Am sure states like Lagos,Akwa ibom and co have done well with the dough

other Governors might have done poorly. . . .

I dont buy this arguement of waste,because to start with,the ECA has no basis in law
The states can rightfully demand that the money is theirs and they even took OBJ to court

Now this is why Jonathan has made the SWF a priority,to be backed by law
that way in the future,no-one can withdraw money anyhow

so tell me again what the problem is?

Jonathan has proposed the set up of a Sovereign wealth fund. .$1billion of this money was withdrawn for that purpose

A SWF on the other hand is like an Investment account,which allocates capital to various asset classes. .e.g,stocks,bonds,Infrastructure etc
so when the SWF is set up Nigeria might find itself,buying into companies like GOOGLE,Holding Hong Kong bonds that yield 5% -6% and so on. .or an Infrastructure bond for road building in lagos

so you get a return on your investment in form of dividends and interest

Beaf:

Now, this what I call a daft contribution.
It is the equivalent of throwing abuse at passers by without reason. Very agricultural contribution.

FACE:



Is it not laughable that you would on one hand say that ECA is not backed by law (which I agree with) and on the other hand try to justify the withdrawal of money from that account for the purpose of funding an account that is not yet in existence ? An account which might not make it past the first hearing at the houses of assembly. The tail does not wag the dog neither does the cart drive the horse. What's the hurry ? Why not wait until the law backing SWF come into force before withdrawing money to fund the SWF ? You accept that the money rightly belongs to the federating units, but you advocate the spending/with holding of that money by executive fiat/dictatorship.

Concerns about SWFs

Their inadequate transparency is a concern for investors and regulators. For example, size and source of funds, investment goals, internal checks and balances, disclosure of relationships and holdings in private equity funds. Many of these concerns have been addressed by the IMF and its Santiago Principles, which set out common standards regarding transparency, independence and governance

Is it easier to push for a new law to back a new account or to create a law to give force to an existing account, which already has a structure ? Who says that we need to create an account for investment purposes anyway ?

A federal government has no business investing tax payers money in overseas companies with no solid investment in the country. If the country had a lot of money to spare, they would divest their foreign reserve into two or three currencies and bonds from reliable countries like USA .

May I remind those talking about Dubai that Dubai is an emirate which controlled by a few families who own the wealth of the land, therefore they can afford to invest their money in whatever way they deem fit, even to the point of near bankruptcy.

Is it not laughable that you would on one hand say that ECA is not backed by law (which I agree with) and on the other hand try to justify the withdrawal of money from that account for the purpose of funding an account that is not yet in existence ? An account which might not make it past the first hearing at the houses of assembly. The tail does not wag the dog neither does the cart drive the horse. What's the hurry ? Why not wait until the law backing SWF come into force before withdrawing money to fund the SWF ? You accept that the money rightly belongs to the federating units, but you advocate the spending/with holding of that money by executive fiat/dictatorship.

If the purpose of the SWF was to able to fund federal investments in companies like google, barclays, et al; Some of us would rather see any excess money invested in our downstream economy, funding local projects and acquiring stakes in local technological industries who are not able to expand their business due to funds, but are keen to exchange a stake in their companies for funds. Furthermore, who says that those foreign companies might not go burst soon after the investments ?

Gbawe:

I asked the same , but as usual , the question was skillfully avoided by those who craft logic-defying arguements to justify some of Jonathan's actions that seem to 'want to enforce' solutions that appears to patently ignore our intrinsically unique National situation. Like you ask "what's the hurry ?" same as Nigerians ponder over the haste to buy three Airplanes for a fleet that is already adequate !!!

Like I infered before , the money is needed desperately to counter the growing opposition to Jonathan's ambition. After the NEC of the PDP , when it met recently , refused to remove zoning outrightly from the PDP constitution , as Jonathan's camp were hoping , some folks behind project Jonathan may have confronted the stark reality that more dosh is needed for an unpopular project.

Beaf:

And what is "our intrinsically unique National situation"? Is it not the desire by some for backwardness, so they can sit atop the people with their ill gotten wealth?

The reality, is that for the first time, there are very serious and workable plans to diversify the Nigerian economy, but folk like you are asking "what's the hurry". Shame.

Beaf, our unique National situation is unbearable corruption that is real and not imagined . You , as well as most other Nigerians , know that. Many economist , if they then look at Nigeria's situation , may rightly feel the SWF is here at the wrong time since there is a real danger that it can , and most likely , will be exploited by corruption.

If the SWF is non-existent because it has not been 'birthed' by appropriate law , what is the rush to take money out of the ECA to be deposited in a non-existent fund ? Those things hint at the corrupt and partisan use , by a highly corrupt system , of policies and schemes that are used effectively througout the World as per how transparency is , first and foremost , a foregone conclusion.

I disagree with u. . the investment is for unborn generations and for when the oil money will finish. . .whats the point of eating everything today,what about future generation of Nigerians. , are u so selfish that u don't understand that if this fund had been set up in 1980 like other OPEC countries did

we would not be in this situation today. . .?

Paddy lo, I am for true federalism, where there is a structure of how money should be shared from the federation account. We already have that structure in place and I detest spending of money by executive dictatorship. Yes the money should be shared without with holding/diverting any amount until the sharing or spending formula is revised and backed by law. Anything short of that is criminal and dictatorship.

No federal government will engage in reckless gambling of common wealth on foreign investments when the local economy is suffering. Unitary governments may do that but not a federating body.

No one has the right to freeze local or state government funds from the federation account, even if there was a ton of evidence that the money was being misappropriated by the state governors and local government chairmen. We have a structure for dealing with theft and the judiciary should be empowered to deal with those.

If the aim of the SWF is to create a foreign investment platform for the government, I strongly oppose the idea. The federal government should first of all create an asset management bureau if there is none already, reconcile all its assets and investments, identify all the liabilities and invest in our own economy for added value.

I think it is clear this economist is saying that , specifically viewed from Nigeria's unique perspective , an SWF is actually not needed . I will add to his reasoning to state that it has been introduced for selfish personal agenda that becomes more obvious every day.