Senior fellow Todd Moss's blog on sovereign wealth funds was featured in the Huffington Post.
From the Blog
This is a joint post with Stephanie Majerowicz.
Nigeria, perhaps the world's poster child for the oil curse, is the latest country to deploy a sovereign wealth fund as a tool to try to better manage national income. At the same time, Nigeria is struggling with depleted savings and growing fiscal concerns, even in a time of high oil prices. Will the sovereign wealth fund help Nigeria get back on track? What are the chances it won't be raided by politicians with short-time horizons, as in the past? Could cash transfers help? Two new background papers from CGD's Oil2Cash Initiative look at these questions from different perspectives.
- In What Role for Sovereign Wealth Funds in Africa's Development?, Adam Dixon and Ashby Monk look at how a growing number of African countries are turning to SWFs "to smooth resource price volatility, make long-term fiscal policy, manage currency appreciation, facilitate intergenerational savings, and, perhaps most importantly, minimize corruption and tame the political temptation to misuse the newfound wealth." While they argue that such funds can be extremely useful, some very clear governance conditions apply if the benefits are going to be reaped. They point to Nigeria's experience with the Excess Crude Account to show the limits of sequestered funds alone.