WorldStage Newsonline-- The House of Representatives has mandated its Committee on Commerce and Justice to carry out proper investigations, research and if possible public hearing to determine the risk , if any, that may arise from the appointment of foreign institutions to manage Nigerian Sovereign Wealth.
This decision follows the adoption of the prayer of a motion titled: "Contracting the management of the Nation’s Sovereign Wealth to foreign professionals and inherent conflict of interests," brought before the House by the Minority Leader of the House, Hon. Femi Gbajabiamila ( APC, Lagos).
While presenting the argument for the motion, Gbajabiamila noted that recent reports that three foreign financial institutions namely, Goldman Sachs, UBS and Credit Swiss have been appointed to manage Nigeria Sovereign Wealth Fund, was a source of concern.
According to the lawmaker, the Managing Director of the Sovereign Wealth Investment Authority and the initiator of the Sovereign Wealth Fund were former Employees of UBS and Goldman Sachs respectively, two of the three foreign managers appointed.
"The appointment of UBS and Goldman Sachs amounts to a conflict of interests as the MD of the NSIA and the Initiator, former Minister of Finance, Olusegun Aganga are former employees of the two respective institutions contrary to the Code of Conduct provided for under Fifth schedule part 1 of the Constitution of the Federal Republic of Nigeria 1999," the lawmaker said.
Besides, Gbajabiamila said that the appointment of foreign Financial Institutions to manage Nigerian Sovereign Wealth "amount to us entrusting Nigeria’s savings, wealth, economic sovereignty and security in the hands of foreigners."
He questioned the transparency of the process Saying that the Governing Council for the SWIA, which was established by the Act to advice the authority on matters pertaining to the Fund "was only inaugurated a week ago, long after the appointment of the foreign firms, leaving this House in doubt of the transparency of the process that led to their appointment."
The lawmaker said the steps taken by the Nigerian Sovereign Investment Agency if not given a second thought may go a long way in empowering foreign institutions against their Nigerian counterparts, and further entrust Nigerian Economic sovereignty and security in the hand of foreigners; a step too dangerous to the nation’s economic security.
"We have banks here that operate in foreign lands. It amounts to inferiority complex to let foreign banks do what we can do.
"Lets remember that confidence we repose in the foreign institutions. These same institution in the near past almost brought the economy of the world to a collapse," he said.
Friday Itulah ( PDP Edo) while supporting the motion said what the Parliament ought to do is reverse the decision.
"The issue before us is more than clear. The mover has not said there is anything wrong in having the Sovereign Wealth Fund but putting the management of the funds in foreign hands. Its an ill wind that will not blow anyone good."
Betty Apiafi ( PDP Rivers) opposed the motion saying that though she shared the patriotic sentiment of the motion, funds such as the Sovereign Wealth Fund are managed by Portfolio Managers and not banks.
According to her, the nation has decided that the funds which could have been used for infrastructure be saved for future generations "It then behooves us to put it in a save place."
The lawmaker said Abu Dhabi's $650 billion Sovereign Wealth Funds is being managed by Goldman Sachs, one of the three appointed to manage Nigeria's SWF. "It is an organisation that is highly rated in the world," she said.
She said before any move is made by the House, the allegation of conflict of interest has to be established.
She cautioned against any move to terminate the contract with the portfolio managers saying: "If you have an investment, there is a contract and there are penalties for termination of contracts."
Another member Uzor Azubike ( Abia) opposed the motion on the grounds that consideration on investment is stability and profitability which he said necessitated the foreign managers.
According to him, the fact that the Managing Director of the Sovereign Wealth Investment Authority and the initiator of the Sovereign Wealth Fund were former Employees of UBS and Goldman Sachs does not contravene the constitution, but rather it gave them insider information on the workings of the companies chosen.
He said Nigerian bankers cannot be trusted which such huge futuristic investment. "Nigerian bank owners can't demarcate between depositors money and the profit. I therefore oppose the heading, body and prayer of this motion," he said.
However, the motion sailed through when it was put to vote by the Speaker, Hon. Aminu Tambuwal who presided over plenary.
The Committee is to report to the House in twobweeks.