Publications

April 13, 2010

Should Nigeria Establish A Sovereign Wealth Fund?

This paper explores the issues relating to the establishment of a Sovereign WealthFund (SWF) in Nigeria consistent with best practices. Experience with established SWFssuggests that successful oil- based funds tend to be underpinned by a sound oil revenuemanagement framework. The paper thus discusses the underlying issues of oil revenuemanagement, the policy choices and SWF implementation issues.

Download Label
March 13, 2018 - 4:00 am
application/pdf
596.31 kB
v.1.7 (stable)
Read →


Author:Menachem Katz&Cijeyu Ojong

Publication Date: Novvember 2009

Document Size: 53 Pages


SWF are investment vehicles created and owned by governments or sovereignswith the strategic aim of leveraging current account surpluses and temporarily highrevenues to invest in income-producing assets that promise high risk-adjusted returns inthe financial markets. They offer economic and financial benefits. SWFs, under soundoil revenue management frameworks, can help to mitigate boom-bust cycles in the homecountries, and facilitate the saving and transfer across generations of proceeds from fiscalsurpluses emanating primarily from oil. By allowing for greater portfolio diversification,they reduce the opportunity cost of reserve holding, but at the same time increase the risk.




Related

 

Nigeria Economic Update (Issue 3)

Recently released inflation rate report by the NBS shows a further decline in consumer price index in December 2017. At 15.37 percent, the CPI was 0.53 percentage points lower than the 15.90 percent recorded in November 2017. The food sub-index decreased to 19.42 percent from 20.21 percent, indicating reduced pressure on food prices in the review period. Core sub-index fell slightly to 12.1 percent from 12.21 percent in the preceding month. Going forward, the ability of the Central Bank of Nigeria (CBN) to control inflation in 2018 may be hampered by monetary injections by the government and politicians towards budgetary expenditure and election campaigns, respectively.