ASSESSING THE EFFECTIVENESS OF SOVEREIGN WEALTH FUNDS AND GOVERNANCE IN NIGERIA

Abstract

The Nigerian oil and gas resources are natural blessings that should serve the interest of both present and future generations. To achieve this goal, the 1999 Constitution vested ownership on the government with a corresponding obligation to create lasting wealth for the benefit of the community. However, decades of extraction have left poverty, infrastructure decay and ecological damage. Earlier savings mechanisms such as the Excess Crude Account collapsed under weak regulation, fiscal indiscipline and corruption. This paper therefore analysed the effectiveness and governance structure of Nigeria’s Sovereign Wealth Fund. It tested whether the Nigeria Sovereign Investment Authority Act, 2011 and the institutions it created meet the stabilisation, savings and infrastructure objectives promised and how far they align with global best practice. The central argument is that the NSIA Act provides structure but the fund operates in a fragile ecosystem. Constitutional ambiguity, politicised appointments, exclusion from the national budget and discretionary contribution rules undermine accountability and transparency. Its current governance structure exposes Nigeria’s SWF to elite capture. Therefore, the paper concluded that reform of the NSIA Act and deeper constitutional integration are essential for transparency, accountability and intergenerational equity.