IS SOVEREIGN WEALTH FUND A RIGHT?
Julieth Chinenye Nwaji is a mass communication graduate of the Kogi State University, Anyimgba in Kogi State, North Central Nigeria. Miss Nwaji who is in her early twenties is witty, sharp and articulate.
She has this amazing capacity for asking questions that the most profoundly sound intellectual would have to reflect deeply before coming up with an appreciable answer.
She sat next to me on Monday when I was busy doing this piece and her inquiry to know if sovereign wealth fund is a new generation human right triggered off series of unprecedented debate among two of my mutual friends who were also present even as they could not come up with a consensus on her question.
Miss Nwaji's point of observation emanated from the theme of my current piece in which I advanced the position that sovereign wealth fund if properly put into use for the utilitarian benefit of the greatest number of the people in a given political entity may be considered a fundamental human right.
It is my considered argument that in nations such as Nigeria, Equatorial Guinea, Congo[Kinshasha] Gabon, Angola among others whereby natural resources endowed to those entities are explored and the revenue accruable from the export of those rare resources stolen by successive political administrations and diverted to private pockets, it would be imperative for such countries to consider establishing Sovereign Wealth Funds and for strong institutional and legal frameworks to be enforced for the national assets saved in form of sovereign wealth funds used to build functional infrastructure to promote better life for the greatest number of the citizenry.
In his widely acclaimed scholarly book tited; "CRUDE CONTINENT; THE STRUGGLE FOR AFRICA'S OIL PRIZE", Duncan Clarke cited example of Nigeria whereby during the eight year reign of President Olusegun Obasanjo [1999-2007] Nigeria earned $223 billion in oil revenues. Around 70 % of Nigerians remained in survival mode, living on $1 USD per day [80% of oil revenues benefitting around 1% of the populace".
It is therefore safe to conclude that the decision by Dr. Ngozi Okonjo-Iweala to push for the establishment of the sovereign wealth fund is indeed a remarkable push for the fundamental human rights of Nigerians to be respected especially if the objectives of establishing the fund are strictly enforced and the resources used to promote public good.
The Nigerian government through the ingenuity of the current finance minister Dr. Ngozi Okonjo-Iweala and the approval of President Goodluck Jonathan has just established the National Sovereign Wealth Fund (NSWF) last year.
Financial pundits have already described the establishment of the Nigeria's National Sovereign Wealth Fund as the most significant economic policy decision to have been taken by President Jonathan since coming into office as an elected President in May 2011.
What is sovereign wealth fund and why is this a human right if one may ask?
In their words, the Wikipedia stated thus;
“A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals, or other financial instruments. Sovereign wealth funds invest globally. Most SWFs are funded by foreign exchange assets".
The Wikipedia further expounded that;
“Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation's banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and that may not have a significant role in fiscal management”.
Global Scholar see human rights as the most fundamental rights of human beings. They define relationships between individuals and power structures, especially the state. Human Rights delimit state power and, at the same time, require states to take positive measures ensuring an environment that enables all people to enjoy their human rights.
It is universally acknowledged that one of the sure ways that government ensures respect for the fundamental human rights of citizens is for the enforcement of policies and measures that give rise to good governance, zero-tolerance to corruption, promotion of the principle and practice of accountability and transparency.
The primary purpose of establishing the sovereign wealth fund by most developed societies is the creation of quality infrastructure that are designed to make life meaningful and if members of the political entity are provided with qualitative infrastructure to better their lives as citizens, it is safe to say that the sovereign wealth Funds are necessarily established for the promotion and protection of the fundamental human rights to life; dignity of the human person; freedom of association; freedom of movement and other basic freedoms and rights that are inherent, universal, and also the right to development.
To demonstrate that the establishment of the sovereign wealth fund by the Nigerian government is one sure way of promoting and protecting respect for the fundamental rights of the citizenry, a cursory look at the history of sovereign wealth fund is imperative.
According to a publication on wikipedia.org, the very first SWF was the Kuwait Investment Authority, which was established in 1953 before Kuwait secured its independence from the United Kingdom.
The Kuwaits' Fund was created from crude oil revenues and is reported to be currently valued at about two hundred and fifty billion US Dollars ($250 billion). Kuwait is one of the best places to live in the World before of the aggressive infrastructural developemnet achieved with this sovereign wealth fund.
Experts who support the establishment by Nigeria of a sovereign wealth Fund wrote in http://www.financialnigeria.com/ that; “SWFs are thus usually established to save and invest the excess liquidity that arises from natural resource exploitation.
When for instance revenue from crude oil sales exceed the budget projections, the extra revenue represents excess liquidity. Pumping the excess liquidity through spending back into the national economy has the capacity to disrupt sound macroeconomic management.
Inflationary pressure becomes real risk and economic values are distorted. There is thus the need to warehouse the excess liquidity in savings and then invest it for the long term for cross-generational benefit”.
Apart from the establishment of the sovereign wealth Fund by the Nigeria's ministry of finance, last year also witnessed some milestones achieved by the minister of Finance Mrs. (Dr.) Ngozi Okonjo-Iweala and her economic management team to tame the monster of corruption and to bring about rapid economic transformation.
Finance ministry played a critical role in realising what is possibly the most important response against corruption by the administration so far by the establishment of the Aig-Imoukhuede Committee to investigate fuel subsidy payments.
The Committee was a direct fallout of the nationwide protests that followed the removal of subsidies on January 1, 2012. The President had reportedly pledged in the wake of the nation-wide peaceful protest that the government would take action against any proven cases of fraud in subsidy payments.
Finance minister inaugurated the committee which did a forensic investigation of subsidy payments. The result is seen in critical quarters as one of the most far reaching investigations in the history of the country which resulted in clear progress for the country.
To ensure that the good work done by the Committee under the Federal Ministry of Finance got the requisite support at the highest levels of the government, the Committee was later elevated into a Presidential Committee even as 25 firms were named and shamed and are currently being prosecuted by the anti-graft commission for allegedly stealing over N400 billion from the subsidy fund through false claims.
I must however conclude by repeating what I had earlier published that the attempt to collect another debt totalling over $9 billion from some international creditors including China as contemplated by the Federal Government is retrgressive and will return us to position of a slave nation.
*Emmanuel Onwubiko, head, HUMAN Rights Writers' ASSOCIATION OF NIGERIA writes from www.huriwa.blogspot.com.