Mismanagement of Nigeria’s oil revenues: is the Nigeria Sovereign Investment Authority the panacea?

Abstract

Although Nigeria is blessed with abundant reserves of oil and gas, Nigeria has persistently suffered economic hardship as a result of the gross mismanagement of her oil revenues. In an attempt to reverse this trend, the government of Nigeria established a Sovereign Wealth Fund, the Nigeria Sovereign Investment Authority (NSIA), in 2011. The NSIA has three objectives: saving of excess revenues accruing from oil exploitation, fiscal stabilization in times of economic stress and development of social infrastructure. This article assesses the NSIA on the basis of some of the core revenue management principles espoused by the Santiago Principles. In particular, the article analyses the policy objectives of the NSIA; the governance structure of the NSIA including its operational management; the investment policies and guidelines of the NSIA; and the transparency and accountability of the NSIA. The overarching aim of the article is to determine the extent to which the constitutive statute of the NSIA promotes the prudent management and investment of oil revenues in Nigeria.