MANAGING FEDERAL FINANCE: CONSTITUTIONAL CHALLENGES OF THE NIGERIA SOVEREIGN INVESTMENT FUND

Abstract

Introduction

The Nigerian national parliament in 2011 enacted legislation to establish and manage the nation’s sovereign wealth fund.¹ Due to the need to establish a “clear legal framework that specifies the institutional structure within which a sovereign entity (and its subsidiaries) operates and ensures that [the] objectives, role, scope, and responsibilities are clearly laid out,”² the act establishes the Nigeria Sovereign Investment Authority (NSIA) to administer the funds created under the act. Controversies have attended the establishment of the fund due largely to the fiscal framework of the federation which is “deeply embedded in the federalist spirit of its constitution.”³ At the heart of the controversy is whether the national government has the constitutional right to establish the fund? Correlated, does the fiscal arrangement in the federation permit it and would the exercise of the powers of the authority transgress the federalist principles in the constitution? These questions merely mirror the problem in federal relations in Nigeria where units of government place more emphasis on the distribution of scarce but allocable resources than in increasing the production of the resources to be shared,⁴ resulting often in many disputes