THE ALASKA PERMANENT FUND DIVIDEND PROGRAM: MODEL FOR STRATEGIC DIRECT EMPOWERMENT OF CITIZENS UNDER THE NIGERIAN SOVEREIGN WEALTH FUND

Abstract

The ugly experiences of oil zoom and doom, that is, instant oil wealth and near bankruptcy necessitated the establishment of Sovereign Wealth Funds (SWFs) in the US state of Alaska, and in Nigeria, both of which are blessed with the natural oil resources. They realized the need to develop their economies with oil revenue while also saving for the “rainy day†which may come from market volatility and falling oil prices. The oil revenues are saved as investments in viable commercial ventures overseas, and the returns therefrom expended on developing local infrastructure as an antidote against possible “resource curseâ€, among others. Strategically, Alaska introduced the Permanent Fund Dividend program under which its citizens and permanent residents receive annual direct income as dividend from the state’s SWF, while at the same time saving the principal investment for the future benefit of unborn Alaskans and future Alaskan residents. In Nigeria, the establishment of the SWF was originally meshed in legal and constitutional controversies which pitched Nigeria’s federal government against the governors of all 36 states of the federation. Proceeds from Nigeria’s SWF are usually expended on developing public infrastructure without any direct benefit to individual citizens like in Alaska. Using the doctrinal research methodology, this paper explores the meaning of SWFs and their historical evolution in Alaska and Nigeria. It highlights the unique peculiarities of the Alaska, especially the Permanent Fund dividend program which stands it out in the comity of global SWFs, and recommends same as a reasonable model for poverty reduction through strategic empowerment of citizens under the Nigeria SWF.