Christian Science Monitor: West Africa Rising: Will a sovereign wealth fund really help reverse Nigeria's 'oil curse'?
On Dec. 1 last year, Nigeria’s cabinet approved the creation of a sovereign wealth fund that would invest any excess revenues generated from the sale of the country’s oil.
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A developing country is blessed with natural resources worth billions of dollars on the global market, but the revenues are lost to corruption, conflict, or simple mismanagement. Meanwhile, the bulk of the country’s citizens can’t seem to scratch their way out of poverty.
This paradox, often described as the “resource curse,” has played out in countries across Africa, from Angola to Zambia, and it doesn’t seem to be going away any time soon.
Nigeria, Africa’s biggest oil exporter and third-largest economy, is often seen as the poster child for the phenomenon. But now, the country is trying to change.
On Dec. 1 last year, Nigeria’s cabinet approved the creation of a sovereign wealth fund that would invest any excess revenues generated from the sale of the country’s oil, which it exports at a rate of roughly two million barrels per day.
The revenues from those investments would be funneled in three directions. The biggest chunk of money would be used to build Nigeria’s physical infrastructure. A second and smaller portion would fund an economic stabilization program, while a third would be set aside “for future generations.”
The proposal for the fund is now before the Nigerian Parliament. A vote is expected before the country’s presidential election, which is set for April 9. …
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