29 August 2011

Nigeria: Accountants Want FG to Sustain Sovereign Wealth Fund

Lagos — The Institute of Chartered Accountants of Nigeria (ICAN) has punctured the recent call for the abrogation of Sovereign Wealth Fund, saying it is not founded on informed premise.

President of the Institute, Professor Francis Ojaide said the Fund should rather be sustained by the Federal Government in view of the unstable economic policies of the government.

He spoke in Lagos at the weekend at the Institute's symposium on the "Federal Government of Nigeria's Budget Implementation and Its Transformation and Reform Agenda".

He said: "As a body, we commend the Federal Government for the creation of the Sovereign Wealth Fund into which all revenues beyond budget benchmark will be channelled, saved and invested. We have been fortunate as a nation. Crises in other parts of the world have often been translated into more revenue for us, sometimes beyond our imagination.

"Regrettably, we often fritter away such funds through purposeless distributions to various tiers of government. We need to build reserve and save for the rainy day. This makes economic sense because the size of this fund has implications for the value of the nation's currency, the level of inflation in the country and other macro-economic indices."

He also picked holes on government's increased budgetary allocation to recurrent expenditure.

According to him, development is driven by investments in capital projects that have long term impact on wealth creating capabilities of individuals and business entities.

Citing irregular budget cycle, fiscal indiscipline, poor budgeting ethics and implementation processes as reasons for poor performance of past budgets, the ICAN President advocated for the involvement of Accountants in project monitoring.

"There is need to sustain and reinforce this strategic initiative with the inclusion of professionals like Chartered Accountants if we are desirous of having value for money in project implementation," he said.

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