Senate advances bill to allocate 20% of petroleum earnings on sovereign investments

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OrderPaperToday – The Senate on Wednesday passed for second reading a bill to allocate 20% of Petroleum earnings on sovereign investments.

The bill also proposes that the Nigeria Sovereign Investment Authority (NSIA) be made a beneficiary of first line charge from the monthly distributable funds from the Federation Account.

This will take place after the amendment of section 1 of the Allocation of Revenue (Federation Account) act, sponsored by Senator Akpan Bassey (PDP, Akwa-Ibom).

The first reading of the Bill took place in this Chamber on the 12th day of May, 2020.

Reading the lead principles of the bill, Bassey noted that the amendment is for saving purposes and to provide additional funding to the NSIA.

The bill proposes “an amount (equivalent to 20 per cent of the amount Standing to the credit of the Federation Account, less the statutory 13 per cent of the revenue accruing to the Federation Account directly from natural resources,) to be allocated to the Nigeria Sovereign Investment Authority, on monthly basis.

“Let me strongly emphasize the need for a dedicated saving culture to safeguard the Nigerian economy going forward due to the rapidly changing dynamics and volatility of the global oil market.

“Let us learn our lessons now with the outcome of the Covid 19 pandemic because none of us knows tomorrow”, the lawmaker explained.

According to him, a bill had earlier proposed an amendment to section 162(3) of the Constitution of the Federal Republic of Nigeria,1999 (as amended) to provide for the inclusion of the Nigeria Sovereign Wealth Funds established under the Nigeria Sovereign Investment Authority (Establishment, Etc.) Act in the distribution of any amount standing to the credit of the Federation Account.

Another bill had equally proposed an amendment to sections 30(1) and 47(2) of the Nigeria Sovereign Investment Authority (Establishment, Etc.) Act Cap A 15 Laws of the Federation,2004 to provide additional funds for the Sovereign Wealth Funds (SWF) through a statutory allocation of funds from the monthly revenue accruing from the Federation Account and strengthen the operations and withdrawals from the SWF by the Federation to further boost the confidence of the Federating units in the operations of the Fund to the benefit of all.

In addition to this bill, they will serve as the series of amendments in “developing a constitutional and consistent monthly saving culture for the Federation against the rainy day while guarding against constitutional breaches and or conflict of laws”, The Senator said.

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