Amaechi - Why We Don't Need SWF

Amaechi - Why We Don't Need SWF
By Daniel Abia  -  Snr Correspondent, P/Harcourt

Gov. Rotimi Amaechi

As controversy over the setting up the Sovereign Wealth Fund (SWF) continued to rage with the 36 states of the federation telling to the Supreme Court during the week that talks aimed at amicably resolving the issue had collapsed and urged the court to proceed with the hearing of the case, it has now been revealed real reason most states are opposed to the institution of the fund.

The Supreme Court had on Monday fixed March 24, 2014 for definite hearing in the suit filed by 36 state governors against the Federal Government over the Excess Crude Account and the Sovereign Wealth Fund.

A panel of Justices of the apex court fixed the date after counsel in the case regularised the processes they filed before the court.

Prior to the fixing of the hearing date, parties to the dispute, the 36 states governments on one hamd, and the Federal Government on the other hand, had informed the court that all efforts aimed at reaching an out-of-court settlement had not been successful.

The 36 states are challenging the legality of the Excess Crude Account and the decision of the Federal Government to transfer $1billion from the account to the SWF.

Speaking to Sunday Independent on the cause of the disagreement over the fund, Rivers State Commissioner for Finance, Chamberlain Peterside, who gave his government’s position, stating why Governor Rotimi Amaechi and the other governors are opposed to the SWF, said Rivers State is not against the idea of a Commonwealth Fund, but that Amaechi is presently uncomfortable with its operations.

He said it was necessary as a government to “save for the raining day”, but such savings should be done at the discretion of the Federal Government with funds sourced from a source or sources other than the Federation Account.

He opined that it was not only wrong for the states to contribute in creating the Sovereign Wealth Fund, while the Federal Government enjoys the privilege of appointing members of the board that oversees the Fund’s operation.

”Maybe like a case of he who pays the piper dictates the tune, the states fear that since the Federal Government has the privilege of appointing who comes to the board of the SWF, there is a possibility that the managers of the Fund may only be disposed to doing the Federal Government’s bidding”, he stated.

He added that his government, shortly after coming on board, decided to compulsorily set aside N1billion every month for the future of the state and it has now accrued to over N50billion.

Peterside, who spoke on behalf of Amaechi, said “Rivers State has a mini Sovereign Wealth Fund. And we have saved more than N50 billion in that account for the future of the state and generations yet unborn.

“As you know, it is a compulsory saving that it strictly meant for the future of the state”, he explained.

He insisted that there was a need for all the stakeholders to have equal control of the SWF and its operations should be made most transparent.

Lagos State governor, Babatunde Fashola, had earlier expressed doubt over the management and efficacy of the fund, adding that he needed to be properly briefed on the workings of the SWF.

Fashola was of the view that the compulsory savings by the Federal Government on behalf of the state, was against Section 162 of the 1999 Constitution, stating that Federal Government cannot save for the states.

“It is something that I want to have continued engagement about the merit at this time.

“But, as I said, I will continue to talk to the Managing Director, Mr. Uche Orji. And as I told him before, my mind is open.

“But, I need a compelling argument to persuade that this is the way to go at this time,” he said.