Sources for replenishing the National Welfare Fund (NWF) – “the main treasure of Russia” – in 2021 were exhausted. This is stated in the report of the Accounts Chamber on the results of monitoring the use of NWF funds for January-November 2020, published on its website.
Additional oil and gas revenues can be used to replenish the fund in 2022.
Auditor of the Accounts Chamber Alexei Savatyugin recalled that additional oil and gas revenues are the source of replenishment of the NWF, and explained the situation. “Instead of additional, lost oil and gas revenues formed. At the same time, funds in foreign currency, acquired from additional oil and gas revenues in the first quarter of last year, were fully used in 2020,” he said.
According to the Ministry of Finance, indicated in the report, the estimated amount of additional oil and gas revenues for January-March 2020 amounted to 570 billion rubles, and the volume of foreign currency sold by August reached 646.194 billion rubles. As a result, by the end of the summer there were no funds left on the accounts of the Federal Treasury, while until February 1, 2024, income from the management of already formed funds of the NWF will be credited to the federal budget, and not to the fund.
“Thus, there are no more sources for replenishing the NWF in 2021, and additional oil and gas revenues in 2021 can be used to replenish the NWF only in 2022,” the department explained, adding that as of December 1, 2020, the share of liquid assets in the total volume of the NWF, compared with the beginning of the year, decreased from 79 to 65.3 percent.
Earlier in January, Russian President Vladimir Putin instructed the government to work out the issue of increasing the amount of funds from the National Wealth Fund (NWF), attracted by the Russian Direct Investment Fund (RDIF), to implement projects in the petrochemical industry.
Shortly before this, the head of state assured that the authorities would not throw money from the fund. He recalled that the funds of the NWF can be spent only if the volume of the fund exceeds 7 percent of GDP, and noted that the money of the NWF should be directed to projects on a repayable basis. It was reported that 20 percent of the NWF is already in the economy, having been invested in large infrastructure projects.