The Ekiti State Government has approved a Wealth Fund Bill, that is designed to receive, manage, and invest in a diversified portfolio of medium- and long-term assets for the state’s indigenes and residents.

Mr. Akin Oyebode, the Commissioner for Finance and Economic Development, said this at the end of the State executive council meeting. According to him, it would include a future generation fund in liquid assets; and an investment facilitation fund to claw-in private capital.

The Commissioner noted that it would also provide stabilization support in times of economic stress as well as manage other funds and investments for the state. The Ekiti State Wealth Fund would among other things build a savings base for the indigenes and residents of the state and provide for investments in the promotion of research and development.

The Commissioner said the Ekiti Wealth Fund would receive seed funding of N1bn from its first day of operation when passed by the House of Assembly and signed into law. He observed that this would position Ekiti state to create a future of shared prosperity. 

According to Oyebode “By sending such an important piece of legislation to the House of Assembly for consideration, Ekiti has again shown its willingness to lead the way in good governance and fiscal responsibility in Nigeria.”

Responding to further enquiries from Proshare, he said “The lessons of the last 3 years have shown that subnationals must prepare for fiscal shocks, and also devote more resources to attract private capital, which is the critical driver of economic development. The bill is in line with the vision of the government to build a prosperous state and people.”

In terms of modelling, the Commissioner added that several models were explored which included Tamasek in Singapore, the government’s Global Investment Company, the Norwegian SWF and the Nigerian Sovereign Investment Authority (NSIA). The government also looked at various sub-national wealth funds in Canada, USA, and Brazil.

Ekiti is now the second subnational in Nigeria to create a wealth fund bill, designed to improve savings and mobilize capital for future investments. Lagos state was the first state to develop a Wealth fund bill, which was signed into law in October 2022. Ekiti state has a population of 3.82m people with a gross domestic product (GDP) of N2.35trn. Its Internally Generated Revenue (IGR) for 2021 was roughly N17. 57bn. The relatively small size of the state and its slim resource base requires greater prudence in resource management and the wealth fund represents a mechanism for optimizing state assets (see illustration below).

At the national level the Nigeria Sovereign Investment Authority, NSIA was enacted in 2011 to manage the sovereign wealth fund of the country.