Barely seven months after the inauguration of the board of the Nigerian Sovereign Investment Authority (NSIA), the organisation has said it would commence investment of the $1 billion Sovereign Wealth Fund with initial $200 million from next month.
The managing director the NSIA, Dr Uche Orji, stated yesterday in Abuja that the NSIA is now fully operational and that the board has already met three times to approve the Investment Policy Statement as well as make allocation to the three different funds, namely the Stabilisation Fund, the Future Generation Fund and the Nigerian Infrastructure Fund.
Speaking during a maiden interactive session with the media, Orji said a total of $200 million has been allocated to the Stabilisation Fund, $325 million to the Future Generation Fund, while $325 million has been allocated to the Nigerian Infrastructure Fund.
According to him, the remaining $150 million has been left unallocated to allow the board the flexibility to top up each of the funds as it sees opportunities.
“We have balanced the Infrastructure and the Future Generation funds with a view to recognising the need of the current generation, which is infrastructure, and the need of the future generation, which is savings. That is the idea of the initial allocation of the funds,” he said, adding that the allocation formula would be revisited by the board periodically.
NSIA is a savings fund established by the Nigeria Sovereign Investment Authority (Establishment) Act 2011 and financed by the federal government to build a savings and investments base from the country’s hydrocarbon wealth.
While the Stabilisation Fund will start early June, Orji said, the Future Generation Fund will commence towards the end of 2013 considering its diversified portfolio and complicated processes. He added that the detailed review of the possible investment areas to benefit from the Infrastructure Fund was ongoing.
He identified priority areas being considered under the Infrastructure Fund portfolio to include health care, transportation, water resources, power and housing, pointing out that the interest of the agency would be on commercially viable projects that help it earn good returns on investment for Nigerians.
He noted that the SWF has started well, considering that it has a seed fund of $1billion which is higher than what many other countries started with. For instance, Norway which started with a seed fund of $300 million in 1996 has grown to $665.3 billion and United Arab Emirates which started with less than $100 million in 1976 has a size of $627 billion currently.
“Our focus is on investments that are both relevant to the current needs of Nigerians and profitable and sustainable,” Orji said. “We are ready to go anywhere to get the best deals for Nigeria.”