The International Monetary Fund
has ranked Nigeria as the second worst country in the world in the use of
sovereign wealth funds.
According to the Fiscal Monitor
report released on Wednesday, Qatar was the only country worse than Nigeria on
the index.
The Bretton Wood institution said
the index was compiled using the corporate governance and transparency scores
of the sovereign wealth funds and the size of assets as a percentage of 2016
GDP of the countries considered.
The fund said it used data
compiled by the Natural Resource Governance Institute and Worldwide Governance
Indicators.
“It is critical to develop a
strong institutional framework to manage these resources—including good
management of the financial assets kept in sovereign wealth funds—and to ensure
that proceeds are appropriately spent,” the report read.
“This remains a significant
challenge in many resource-rich countries that, on average, have weaker
institutions and higher corruption
“The governance challenges of
commodity-rich countries— that is, the management of public assets— call for
ensuring a high degree of transparency and accountability in the exploration of
such resources.
“Countries should develop
frameworks that limit discretion, given the high risk of abuse, and allow for
heavy scrutiny.”
Explaining that sovereign wealth
funds have to be transparent, the IMF advised that countries should ensure that
the natural resources of countries should be channelled properly to the people
that need them.
Of the 10 African countries
considered, Ghana was ranked the highest.
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