Excess Crude Account And Sovereign Wealth Fund As Strategic Tools For Sustainable Development In Nigeria

Abstract

The rapidly changing dynamics and volatility of oil market have underscored the need for building material fiscal savings. Hence, the wisdom behind the establishment of Excess Crude Account (ECA) and Sovereign Wealth Fund (SWF) by the Government of Nigeria in 2004 and 2011 respectively. These two funds serve as buffer to sustain developmental strides of Nigeria in the present and in the future. The SWF is a state owned investment fund comprising financial assets that include stocks, bonds and other financial investments aimed at effectively managing the proceeds from oil exports for the benefits of both present and future generations in Nigeria. The thinking behind the ECA and SWF is to ensure that excess crude oil revenues are made productive in times of fiscal difficulties. Sustainable development ensures that a country is in charge of its economics in order not to unfairly mortgage the interests of the present and future generations. It must, however, be averred that without the mobilization of short-term and long-term savings to support the consolidation of present and future growth and development there cannot be sustainable development.

Keywords: Excess Crude Account, Sovereign Wealth Fund, Strategic, Tools, Sustainable Development.