IMF Says Nigeria's Sovereign Wealth Fund Worst Transparently Run

The International Monetary Fund (IMF) on Wednesday ranked the Nigerian Sovereign Investment Agency (NSIA), operators of Nigeria’s Sovereign Wealth Fund (SWF), as the worst transparently run fund after Qatar’s.
The rating is contained in the IMF’s Fiscal Monitor for April 2019 released by the Fund in Washington, as part of activities marking this year’s Global Financial Stability Report.
Nigeria sits in the same category with Sudan, Equatorial Guinea, Chad and Saudi Arabia.
The Report notes that corruption remains a challenge for many resource-rich countries.
NSIA Managing Director and Chief Executive Officer Uche Orji, however, described the rating as incorrect and misleading.
Relying on the data from the Natural Resource Governance Institute and Worldwide Governance Indicators, the IMF said the index was compiled using the corporate governance and transparency scores of the Sovereign Wealth Funds and the size of assets as a percentage of 2016 GDP of the countries considered.
Other African countries on the index that performed better than Nigeria include Sudan, Equatorial Guinea, Chad, Gabon, Angola, Libya, and Botswana. Ghana came second after Columbia.
The Nigerian Sovereign Wealth Fund was put at $2.15 billion in May 2018.
“Sovereign Wealth Funds should abide by clearly established rules and governance arrangements, and report regularly on operations and investment performance, with eternally audited annual financial statements,” the IMF said.
According to the IMF, Sovereign Wealth Funds should not be allowed to undertake extra-budgetary spending.
“It is critical to develop a strong institutional framework to manage these resources—including good management of the financial assets kept in sovereign wealth funds—and to ensure that proceeds are appropriately spent. This remains a significant challenge in many resource-rich countries that, on average, have weaker institutions and higher corruption
“The governance challenges of commodity-rich countries— that is, the management of public assets— call for ensuring a high degree of transparency and accountability in the exploration of such resources. Countries should develop frameworks that limit discretion, given the high risk of abuse, and allow for heavy scrutiny.”
The Deputy Director, Fiscal Affairs Department, IMF, Paolo Mauro, emphasised the need for transparency of Sovereign Wealth Funds, adding that it was important for resource-rich countries to channel appropriately their resources to the people that needed it.