THE cloud is gathering over the much promoted Sovereign Wealth Fund (SWF) with state governors calling for more clarity over how the country's planned debut SWF would work because of concerns that they will have less access to oil revenues.
The fund has been designed to help improve management of often-squandered crude oil earnings and would replace Nigeria's Excess Crude Account (ECA), into which oil revenues over a bench- mark price are now saved.
Governors of the 36 states are concerned that revenues placed in the SWF will tie up oil income and that it won't reach the state level. The Federal Government is likely to manage the SWF and has said there will be stricter rules on accessing funds.
'The SWF was discussed and the governors did agree that there was need for a rethink,' Isa Yuguda, governor of Bauchi State, said after a meeting at the Presidential Villa in Abuja on Monday when the new National Economic Council was inaugurated.
Yuguda said there would be more talks between the states and Federal Government to address the concerns raised by the governors at Monday talks. No firm timetable has been agreed for the new fund to start operating.
Critics of the ECA say there was no clear legal basis on which to determine how the windfall oil savings in the account would be shared between the tiers of government - federal, state and local- leading to constant political wrangling.
The account contained more than $20 billion when late President Umaru Yar'Adua came to power in 2007, but by the end of last year it held less than $1 billion.
Yuguda said there is need to be checks since the SWF is constitutional, adding the fund could be accommodated if it has a positive impact on Nigeria and does not lead to other tiers of government being short-changed.
Other governors said the implementation of the new minimum would lead to the states needing more oil funds, not less.
President Goodluck Jonathan can ill afford a political battle between layers of government after making pledges to boost economic growth, create jobs and improve remarkably inadequate power supplies.
Jonathan said in his national economic council inaugural speech that he does not want rifts between the state and federal government to be brought into public domain.
'I plead with the governors that at the end of any of the governors forum meetings, if you feel there are issues that you feel that are grey, it is better you approach us so that we can sit down and look at it and discuss and agree on where to go.