Sovereign Wealth Fund: Mitigating Oil Price Volatility – A Comparative Analysis
DOI:
https://doi.org/10.64321/jcr.v2i5.09Keywords:
Price Volatility, Mitigation, Sovereign Wealth Fund, Advantage, China, NigeriaAbstract
This paper discusses a comparative analysis of Nigeria’s Sovereign Wealth Funds (SWFs) in the face of rising global oil prices volatility. Globally, sovereign wealth funds development has become a veritable tool for sustainable saving for the future and Nigeria also adopted the SWFs. Relying in historical data that spans a decade, we show that Nigeria’s Sovereign Wealth Funds’ growth is determined by global oil prices volatility. In a trend analysis between 2012 and 2023, Nigeria’s SWFs declines throughout in a volatile oil price environment. In contrast, China’s SWFs was not determined by global oil prices volatility. China was able to mitigate oil prices volatility through different sources of fund for her SWFs. We recommend similar approach for Nigeria, notably diversify investment in her current SWFs to include transport and haulage at least at the African sub-region as a way of mitigating Nigeria’s SWFs against ever fluctuating global oil prices in years following this study.
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