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LAGOS, March 10 (Reuters) - Nigeria's parliament is considering a bill to create a sovereign wealth fund aimed at better managing the OPEC member's windfall oil savings, billions of dollars of which have been frittered away in recent years.
Following are some questions and answers about the plans:
Parliament held a public hearing on the bill this week, including submissions from the central bank and senators on suggested improvements, such as greater clarity on eligible asset classes in which the fund can invest.
Committees from the two houses of parliament will consider the recommendations and each draw up final versions of the bill, which will then be harmonised before being passed into law.
The 59-clause bill is a relatively small piece of legislation, meaning it could still be passed before April elections, although with parliament due to go on recess on March 16, there is little time left.
The fund is meant to replace Nigeria's excess crude account (ECA), a pillar of IMF-backed reforms launched in 2003 into which Africa's biggest oil and gas producer currently saves any oil revenue above a benchmark price set each year in the budget.
Critics of the ECA say there is no clear legal basis on which to determine how the windfall oil savings in the account should be shared between the tiers of government -- federal, state and local -- leading to constant political wrangling.
The account contained more than $20 billion when late President Umaru Yar'Adua came to power in 2007 but by the end of last year it held less than $1 billion.
Some of the funds were used to bolster sub-Saharan Africa's second-biggest economy during the global downturn and to fund infrastructure projects, but analysts have been alarmed by the speed and extent of the depletion.
Finance Minister Olusegun Aganga has said the fund will provide a firmer legal basis to ringfence Nigeria's savings.
Africa's biggest energy producer is one of only three OPEC member states not to have a sovereign wealth fund. WHAT ARE ITS AIMS?
The Nigeria Sovereign Investment Authority (NSIA), created as part of the bill, will manage three sections of the fund:
* Future Generations Fund - a rolling five-year investment plan meant to provide future generations with a solid savings base even once its hydrocarbon reserves are exhausted.
* The Nigeria Infrastructure Fund - to generate returns on investment in basic infrastructure such as power generation, agriculture, roads, ports and railways.
* The Stabilisation Fund - a last-resource source of financing for budget deficits caused by weaker-than-expected commodity prices. The government can request funds at the end of a financial quarter if actual oil and gas revenues fell below the revenues forecast in the budget.
It is hoped these three funds will reduce Nigeria's long-term economic reliance on oil revenues, insulate it from commodity price shocks and serve as an investment catalyst to draw in other infrastructure investors.
A Governing Council will oversee the NSIA but will not have any direct fund management responsibility.
The Council will consist of the president (who may be represented by the vice president), the 36 state governors, the finance minister, attorney general, national planning minister, central bank governor and president's chief economic adviser.
Four private sector representatives, two civil society representatives, two youth representatives and four academics will also sit on the Council.
The management board will consist of nine directors to be identified by an independent committee made up of the finance minister and "distinguished, professional" Nigerians.
The NSIA will report on a quarterly basis to the Governing Council while an annual report will be published in newspapers.
Seed funding of $1 billion has been authorised by Nigeria's National Economic Council and has already been set aside from the Excess Crude Account.
The fund will receive monthly funding of a "large proportion" of oil and gas revenue above the budgeted revenue and approved by parliament.
The NSIA will have to power to invest in, purchase, maintain and sell assets and investments of any kind and open branches in Nigeria and abroad to achieve its objectives.
Its affiliates will be able to issue bonds or other debt instruments and borrow or raise money in any currency.
Sources: Bill to create the Nigeria Sovereign Investment Authority, Finance Ministry, Central Bank memorandum to parliamentary public hearing.
(Editing by Ron Askew)
For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ Additional reporting by Camillus Eboh and Joe Brock in Abuja; Writing by Nick Tattersall; editing by xxxx