IMF ranks Nigeria second worst country in use of sovereign wealth fund

IMF ranks Nigeria second worst country in use of sovereign wealth fund

- Nigeria has been ranked as the second worst country in the world in the use of sovereign wealth funds, by the IMF

- Of all the 10 African countries considered in the ranking, Ghana ranks highest

- The IMF has stated that it is critical to develop a strong institutional framework to manage these resources and to ensure that proceeds are appropriately spent

- The institution has also advised countries to ensure that they channel natural resources properly to those who need them

Nigeria has been ranked by the International Monetary Fund (IMF) as the second worst country in the world in the use of sovereign wealth funds.

The development was made public in the Fiscal Monitor report which was released on Wednesday, April 10, The Cable reports.

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Legit.ng gathers that Qatar is the only country worse than Nigeria on the index. Also, Ghana ranked highest, out of the 10 African countries considered.

According to the Bretton Woods institution, the index was compiled using the corporate governance and transparency scores of the sovereign wealth funds. The size of assets as a percentage of 2016 GDP of the countries considered was also used in compilation.

The IMF further disclosed that it made use of data compiled by the Natural Resource Governance Institute and Worldwide Governance Indicators.

The report read: “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.

“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.”

The IMF advised countries to ensure that they channel natural resources properly to those who need them, as it explained that sovereign wealth funds have to be transparent.

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Meanwhile, Legit.ng previously reported that according to a research by an economist from John Hopkins University in Baltimore, United States, Steve Hanke, Nigeria ranks sixth among miserable countries in the world.

Hanke's survey revealed that Venezuela topped the list of miserable countries in the world. He said: “Venezuela holds the inglorious title of the most miserable country in the world in 2018, as it did in 2017, 2016, and 2015.”

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Source: Legit Nigeria

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