The proposed amendments to the Natural Resources Fund (NRF) Act were tabled in the National Assembly on Thursday. The Act will govern the spending of the country’s revenues earned from the exploitation of its oil resources.
According to the proposed NRF Bill 2021, monies from the fund must first be approved by the National Assembly before withdrawals and “shall only be used to finance national development priorities including any initiative aimed at realizing an inclusive green economy and essential projects that are directly related to ameliorating the effect of a major natural disaster.”
The amount to be withdrawn from the fund in any fiscal year is subjected to a ceiling calculated in accordance with the First Schedule of the document.
The First Schedule notes that the ceiling on annual withdrawals from the fund, not including withdrawals for emergency financing, shall be calculated; 100% of the first US$500M paid into the fund in the immediately preceding year, 75% of the second US$500M, 50% of the third US$500M, 25% of the fourth US$500M, 5% of the fifth US$500M and 3% of any amounts in excess of the first US$2,500M.
The fund will be governed by a Board of Directors to provide management and oversight.
The President will be responsible for appointing members of the Board, one of which will be nominated by the National Assembly, and another who will represent the private sector.
The Bill seeks to put an anti-corruption mechanism in place, which would prevent the appointment of someone who would have a conflict of interest.
“The Directors shall be selected from among persons who have wide experience and ability in legal, financial, business, or administrative matters,” the Bill states.
They will be responsible for the overall management of the Fund, reviewing and approving its policies, monitoring its performance, ensuring compliance with its approved policies, exercising general oversight over all aspects of its operations, and ensuring that its management is in compliance with the law.
The powers of oversight and management which should be bestowed on the Board of Directors are assigned to the minister in the initial Act passed in 2019. The minister, under the new dispensation, will be responsible for giving policy directives to the Board.
Notably, the Public Accountability and Oversight Committee which exist in the 2019 Act will not be removed by the
new Bill. It has, however, been reduced in size to provide for a more practical exercise of its oversight function. Instead of a 22-member group, the new committee will have nine members, which will include a nominee of the National Assembly, and representatives of the religious community, the private sector, organised labour and the professions.