The discord over the bill to establish the Nigeria Investment Fund for Future Generations is a reflection of a lack of agreement over strategies on how to use today's accumulated savings to prepare a future for tomorrow's generations. Apart from different strategic perspectives, the issue of federalism is also a key factor.

For this reason in presenting the bill, Senator Ewa Henshaw went to great length to clarify the constitutional issue. He pointed out that the proposed fund will receive contributions from the consolidated revenue fund of the federal government under section 80 of the Constitution and not from the Federation Account covered under Section 62.

"Thus the fund will enable the federal government to save a small part of its revenue out of the difference between what it has budgeted to spend and the outcome it actually receives."

The fund if enunciated will also hopefully institutionalise and inculcate in the polity the discipline of saving for the rainy day. It certainly makes sense that the fund will enable the federal government to save a small part of its revenue out of the difference between what it has budgeted to spend and the income it actually received.

On paper, the fund is desirable and should be supported. It only states the obvious to state that savings provide resources for investments and investments help expand the economy and lead to more rapid growth. Clearly, if an economy is to grow, savings must outgrow consumption, however there is a caveat, this being that, savings must translate into investments. In the case of Nigeria, a lack of prudence in managing the public purse has been disastrous. All over the oil producing world, there has been frenetic activity to prepare for the future, especially one that is not based on fossil fuel. This is why instruments such as Sovereign Wealth Funds (SWF), which are state owned investment funds comprising financial assets such as stocks, bonds, property and other financial instruments have taken a life of their own and have become very important players on the world economic stage. Distinguishing funds held as SWF's from the foreign exchange reserves held by the Central Bank will be quite important in the case of Nigeria, for there has been a raging debate about the efficiency of holding ever increasing amounts of foreign exchange reserves while the physical and social infrastructure is crumbling. This is a crucial matter which must be addressed. Therefore, the need for a judicious balance between savings and the development of the nation's infrastructure is imperative.

To ensure a sensible balance, 'trigger' clauses must be inserted into the bill. This will not just ensure that the money is properly used, it will make available an institutional mechanism whereby excess funds above what is projected will be used to tackle the country's terrible infrastructure deficit. The trigger here is important for there can be no sustained real development without massive investment in and rebuilding the infrastructure. This will constitute the decisive battleground of the goals enunciated around 'vision 2020' are to be achieved. The multiplier effect is also crucial. To buttress the point a recent edition of The Economist noted a World Bank estimate that a one per cent increase in a country's infrastructure stock is associated with a one per cent increase in the level of the Gross Domestic Product. In addition, a recent report by Goldman Sachs argues that infrastructure spending is not just a cause of economic growth, but a consequence of it. As people get richer and more of them live in towns, the demand for electricity, transport, sanitation and housing increases. This mutually reinforcing relationship adds to higher investment and growth. It is particularly from this perspective, that the nature of the trigger clauses must be clearly spelt out. Further, there must be a clear format as to how the trigger clauses will be activated and they must be enshrined in law. For the fund if properly used will not only help to develop the country's dilapidated infrastructure, it will also serve as a veritable tool to be used to expand and deepen the nation's capital and money market.

A word of caution here; this is important in view of our past abysmal record which is that any such fund must be operated in the full glare of transparency, as well as parliamentary supervision and scrutiny. Here, again, the need to pass the Freedom of Information (FoI)Act is crucial. For if the original laudable objective is not to be defeated and the fund inevitably pillaged, accounting principles and standards of accountability must be as stringent as it must be rigorous. The proposed bill has a laudable objective. It is long overdue and should be supported. However, given the Nigerian experience clauses of a stringent nature must be inserted to ensure its operational safety and integrity.