The proposed sovereign wealth fund has taken off. This follows the setting aside of $1 billion for the fund by the Federal Government.

President Goodluck Jonathan had told the National Economic Council, some months ago, to establish a framework for the fund within three months.

According to him, once that is done, earnings above the budgetary benchmark price of crude oil would automatically be transferred to the fund.

Finance Minister, Mr Olusegun Aganga,  later explained that the fund would eventually replace the country's excess crude account, in which Nigeria currently saves any oil revenue above a benchmark oil price.

Nigeria is the only oil-producing country to establish the fund, thus leaving the usefulness it has put to its oil booms to speculation. The Kuwait Investment Authority, a commodity SWF created in 1953 from oil revenues before Kuwait ever gained independence from the United Kingdom, is now estimated to be about $250 billion.

Experts believe that for an economy that has defied diversification, this may be an opportunity because the funds have been used successfully in some countries in developing a broader base for economic growth.

President Jonathan’s administration, has pushed the idea of a sovereign fund to help Africa’s most populous nation to save some of its oil revenues for the future, invest in critical infrastructure and help stabilise the OPEC member’s finances, when world oil prices are volatile.

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