Promoting Functional Distributive Justice in the Nigerian Sovereign Wealth Fund System: Lessons from Alaska and Norway

Nigeria established a sovereign wealth fund (SWF) system in 2011 to manage excess crude oil revenue, in the interest of current and future generations. Commentators have substantially addressed the issue of whether or not this system is constitutional, but have largely neglected the issue of whether or not the Nigerian SWF is capable, in its current design and implementation, to effectively achieve its overall fund-saving and sustainable development aims. Although it contains preambular recitals and superficial operational provisions, the Nigerian system fails to embed practical guidelines and risk governance safeguards that would ensure that present and future generations of Nigerians adequately benefit from proceeds of excess crude revenue. Based on the standards of functional distributive justice, this chapter examines why lack of adequate safeguards to ensure an equitable, accountable and transparent management of crude revenues may hamper the ultimate effectiveness of the Nigerian SWF.

Employing qualitative and comparative methods, this chapter evaluates the legal and policy design of Nigeria’s SWF system, comparing it with practices in Norway and Alaska. This chapter relies on the functional distributive justice theory, to argue for a reform of the legal and policy framework underpinning the Nigerian SWF to make it more equitable, accountable and transparent, if it is to achieve its ultimate aim of fostering the effective allocation of oil wealth across Nigeria.