Sovereign Wealth Fund: Okonjo-Iweala Fails in Move to Convince Governors

The meeting between the Federal Government and governors on the desirability of the Sovereign Wealth Fund (SWF) ended in a deadlock in the early hours of yesterday.

The meeting, which lasted over five hours, was convened late Wednesday to discuss the Fund which is aimed at saving part of the oil revenue in case of a fall in crude oil prices in the future. However, an agreement was reached on the new model of education presented by the Federal Government to remove street urchins, generally called almajiris.

Minister of Finance and the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, who led the Federal Government delegation to the meeting, failed to convince the state governors to accept the operation of the SWF which they claim is “milking the states dry and rendering them cash-strapped”. The governors in recent times had raised objection to SWF which they claim is unconstitutional, saying each state should be allowed to do whatever it wants with its oil revenue in the spirit of "true federalism".

Okonjo-Iweala, who arrived the Rivers State’s Governor’s Lodge at the Asokoro district of Abuja with her team at about 9.40pm Wednesday, left at about 12.28am yesterday without accomplishing her mission of having the governors to accept the operation of the SWF. According to one of the governors on the outcome of the meeting, “Her (Okonjo-Iweala's) presentation to us at the meeting was passionate, persuasive and compelling, but there is nothing one or two governors could do, because we always work on consensus.”

The governor, who craved anonymity, said that the minister, who used statistics to support the desirability of the fund, explained that it was in the interest of Nigeria to commence the SWF to avoid the collapse of the economy as was the case in the United States of America and in Europe during the economic meltdown. The governor, while quoting Okonjo-Iweala, said that the fund was aimed at averting a “rainy day” situation, adding that “if the Sovereign Wealth Fund is not allowed to operate, that the future would be bleak”.

Asked why the governors did not support the views canvassed by the minister, he said: “Our decisions in the forum are usually based on consensus, but in this matter, there was no consensus. “From the questions being asked, it was clear that there was no consensus on the matter. Hence, it was agreed that the matter be adjourned to our next meeting next week.” He explained that the governors were under pressure to pay the minimum wage of N18,000.

“This minimum wage is one of the basic reasons why there was no consensus. The states are cash-strapped. The governors need money to pay the increased wage bill. So, you can now understand our position,” the governor said. He said the next step would be to engage in dialogue on the matter before a final resolution would be reached to either accept the position proposed by the Federal Government or not. Last week, some of the governors had said that the operation of the fund was illegal and asked that its operation be stopped.

However, there was a consensus on the presentation by the Minister of State for Education, Chief Eze Onyeso Wike, on the Almajiri Education Model. The governors agreed with the proposal made by Wike, but said that the model should be given a national attention, adding that it is not a matter for the North alone. After the meeting, which ended at about 1.30am, Chairman of the NGF, Governor Chibuike Amaechi, told anxious reporters that the meeting would continue later.

Amaechi did not say when the next meeting would hold despite prodding by reporters. The SWF, which has been signed into law, had received the understanding and cooperation of most state governors. The recent opposition to it is not unconnected with the increased wage bill the minimum wage issue has thrown up for the state governors.
 

Some of the governors have also expressed worry over why the Federal Government would be the treasurer of their own savings, fearing that the proceeds of the SWF could be abused.