NIGERIA Extractive Industries
Transparency Initiative (NEITI) has called for
the transfer of all the country’s oil revenue
savings into the custody of the Nigeria
Sovereign Investment Authority (NSIA).
In an Occasional paper ‘‘the case for a
robust oil savings fund for Nigeria”, NEITI
stated that its position was informed by the
transparency rating of the NSIA by the global
Sovereign Wealth Institute. The NSIA had
scored 9 out of 10 on the Sovereign Wealth
Institute’s transparency index, the highest
score by any African Sovereign Wealth Fund.
The NEITI Occasional paper recalled that
the Nigeria Sovereign Wealth Fund was set
up in 2011 to build a savings base, develop
infrastructure and provide stabilization in
times of economic stress for the country. The
fund was structured into three components
– the Future Generations’ Fund 40%, Nigeria
Infrastructure Fund 40% and 20% for the
Stabilization Fund and started off with a
seed capital of one billion dollars ($1bn) in
2012. In November 2015 and March 2017,
the government transferred additional $500
million into the fund bringing the total
savings to $1.5 billion.
NEITI however observed that while these
savings were significantly below projected
transfers to the NSIA, it was satisfied that
the funds under the management of the
Authority have not been depleted unlike
the other oil savings accounts – The Excess
Crude Account and 0.5% Stabilization Fund.
According to NEITI, “the NSIA Act (2011)
is an improvement on the legislations for the
ECA and the 0.5% Stabilisation Fund in terms
of comprehensiveness, transparency and
accountability. While the ECA and the 0.5%
stabilization fund were established each by
a single clause in broader (fiscal) legislations,
with no specific governance, transparency
or accountability requirements, the NSIA is
a comprehensive legislation with extensive
corporate governance and management
provisions in line with global principles and
best practices”.
The NSIA law emphasises professionalism
and technical expertise of both management
and members of the NSIA board with
clearly defined reporting requirements and
accountability relationships between the
management, Board, and Council.
NEITI noted that while the NSIA made
N192billion return on its investments,
the Excess Crude Account and the 0.5%
Stablisation Fund recorded zero returns on
investment.
NEITI expressed concerns that unlike the
Sovereign Wealth Fund, the Excess Crude
Account and the Stabilisation Funds have
suffered all kinds of abuses over the years
thus undermining the objectives for which
they were set up. The NEITI Fiscal Allocation
and Statutory Disbursement Audit report
released in 2013 had revealed that while
N109.7 billion was transferred into the Excess
Crude Account for the period 2007 to 2011,
the sum of N152.4 billion was withdrawn
from the account. As at May 31, 2017, the
account had an outstanding sum of N29.02
billion.
The paper further revealed that between
2005 and 2015, the sum of $201.2 billion
accrued to the Excess Crude Account, but
$204.7billion was withdrawn from the same
account. In other words, outflows were 102%
of inflows.

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