* Governors say sovereign wealth fund is unconstitutional
By Camillus Eboh
ABUJA, Sept 20 Nigeria's state governors vowed
on Thursday to go to court to stop the government putting oil
revenues into a sovereign wealth fund.
Africa's top crude producer has been moving closer to
joining its OPEC partners in creating a sovereign wealth fund
for long-term investment of its oil cash.
The governors, who enjoy luxurious lifestyles and wield huge
patronage, had been opposed to the fund because they feared it
would reduce their share of the oil money.
The country pumps over two million barrels of oil a day but
economists say revenue over the decades has been wasted on
bloated government wages, a vast patronage network that gets
costlier closer to election time, or plain embezzlement.
The sovereign wealth fund aims to tie up a portion of the
oil cash in a government-run investment portfolio, buying
anything from mainstream assets such as stocks and bonds to
direct foreign investment. Nigeria is one of only three OPEC
members that does not have such a fund.
Nigeria's oil earnings over a benchmark price are currently
paid into the Excess Crude Account (ECA), which is meant to be
for the benefit of future generations or cushion against oil
But there is little oversight of it and it is often raided
even when oil prices are high. It now contains around $8 billion
and is distributed between the three tiers of government,
including the 36 states.
Last year, the governors went to court to try to block the
fund's creation, arguing it was unconstitutional for the federal
government to control all excess oil funds, instead of
distributing them. The 36 governors have said they do not trust
central authorities to manage the fund.
Nigeria's finance minister Ngozi Okonjo-Iweala seemed to
have talked them around in June, and they agreed to it.
As a compromise the sovereign wealth fund is supposed to
start with just $1 billion. But Okonjo-Iweala made it clear last
month she wants it to replace the ECA.
"On the Excess Crude Account, the forum unanimously decided
to head back to court to enforce the federal government's
adherence to the constitution," a joint statement by the
(Writing by Tim Cocks; Editing by Robert Woodward)