Sovereign wealth fund (SWF): a tool for diversifying Nigeria’s emerging economy

Abstract

Sovereign Wealth Fund (SWF) has continued to receive increasing global attention especially since after the last widespread financial crisis of 2008-2009.This study therefore attempted to understudy the phenomenon in the context of its usefulness as a tool for diversifying the economic horizon of some emerging economies like Nigeria. Adopting a qualitative approach to study the concept’s operation, drawbacks and benefits, the study found out that a sovereign wealth fund, when instituted and properly managed, can be used to stabilize or bail out an economy in distress, widen a country’s revenue generation window, provide social security to citizens of a country through pension payments, reduce poverty in society through the payment of periodic dividends, check profligate spending, create a pool of savings upon which the future generation can stand to face future challenges and create an opportunity for mutually beneficial cross pollination of management skills among states that subscribe to the Santiago Principle.