The Nation Newspaper

Tag: Sovereign Wealth

  • Sovereign Wealth Fund hits N358b

    Sovereign Wealth Fund hits N358b

    The Nigerian Sovereign Investment Authority (NSIA), which manages Nigeria’s sovereign wealth fund, has a total assets of about $1.8 billion (about N358 billion at current official exchange rate) under its management

    Its Managing Director, Mr. Uche Orji, during a visit to the Nigerian Stock Exchange (NSE) yesterday in Lagos, gave the breakdown of the assets to include seed capital of $1.25 billion and third party funds of about $550 million.

    Orji said the NSIA is shifting its focus from foreign investments to domestic investments, noting that the company led other investors in recent investments in a dairy farm and tomato paste firm in the Northern part of the country.

    He outlined that by its mandate, the NSIA is  to manage three funds, which include the Future Generations Fund,  meant to preserve and grow the value of assets transferred into it  by investing in a diversified portfolio of appropriate growth investments. There is also the Nigeria Infrastructure Fund, which aims to invest in domestic infrastructure projects that meet targeted financial returns and contribute to the development of essential infrastructure. This is to stimulate the growth and diversification of the Nigerian economy. There is equally the Stabilisation Fund, which acts as a buffer against short-term macro-economic instability.

    “We have five areas of immediate focus for infrastructure which are healthcare, agriculture, tolled roads, power and real estate. Our mandate is to manage the three funds by investment mostly in infrastructure,” Orji said.

    While noting that the activities of NSIA could impact on the performance of the Nigerian stock market, Orji, however, ruled out pthe ossibility of direct investment in the Nigerian equities market in the meantime, pointing out that direct investment in the stock market is not within the mandate of the company.

    He expressed optimism that some of the investments the company is making in private equities will lift such companies to the position they can list on the NSE.

  • Investment plans unaffected by weak oil – SWF chief

    Investment plans unaffected by weak oil – SWF chief

    Nigeria’s sovereign wealth fund said its investment programme over the next six months, including on infrastructure, will go ahead, even as revenues that provide its capital are hit by falling oil prices.

    Uche Orji, the Chief Executive of the Nigeria Investment Authority, highlighted one of the vehicle’s core aims is to manage oil export windfalls to cushion the economy in harder times.

    “The oil price, yes, it’s come down. But frankly, let’s not forget why this fund was set up. It was to prepare us for days like this,” he told Reuters on the sidelines of an African investment conference in London on Tuesday.

    Orji conceded that weakness in the international oil market would affect the fund but he remained focused on deploying existing assets to investment in infrastructure projects in sectors such as transport, power and healthcare.

    “Obviously we get funded from the oil price so if it’s lower, it will affect us. But our plan in the next six months is to fully deploy what we’ve been given. We still haven’t fully deployed our capital yet,” he said.

    Oil prices have dropped more than 25 percent since June on strong supply, signs of weak growth in demand and indications that key oil producers, particularly Saudi Arabia, have a limited appetite to cut output to bolster prices.

    Nigeria, Africa’s top oil producer and most populous nation, established the Sovereign Investment Authority (SIA) in 2011 with $1 billion of seed capital in an effort to manage oil export revenues.

    The fund is split into three components, a “Stabilisation Fund” to act as a buffer against economic turbulence, an Infrastructure Fund and a Future Generations fund.

  • Sovereign Wealth Fund begins in March, says CEO

    Sovereign Wealth Fund begins in March, says CEO

    NIGERIA’S Sovereign Wealth fund (SWF) will begin full operations by the end of next month, its Chief Executive Officer, Uche Orji, has said.

    He disclosed this to State House correspondents yesterday at the end of the National Economic Council (NEC) meeting presided over by Vice President Namadi Sambo at the Presidential Villa, Abuja.

    Orji, who briefed journalists alongside Governor Peter Obi of Anambra State; Minister of Finance, Dr. Ngozi Okonjo-Iweala; and the Minister of National Planning, Shamsudeen Usman, had ealier given a progress report of the fund at the NEC meeting

    He said the Fund was in the process of puting its full complement of staff in place by March, when limited security investment would begin.

    He said: “The strategies we are going to deploy is obviously hybrid. We will have some external managers managing some of the funds for us and some would be run in-house. JP Morgan has been selected as our custodian. We also have investment consultants.”

    Stressing that a lot of developments had been recorded since the appointment of the Fund’s CEO, the Finance Minister, Dr. Ngozi Okonjo-Iweala said that investment strategies have already been prepared for the Fund’s three windows, comprising the stabilisation window, infrastructure investment window and the future generation window.

    “The $1bn that has been put aside will be allocated into the three windows and investments can begin shortly according to the strategy,” she added

    She said NEC’s position on corruption is in tandem with that of President Goodluck Jonathan on the issue.

    “On the issue of corruption, the NEC is saying what can we do to ensure that in every sector, there is transparency and accountability. From the finance point of view, this is something the President wants. The fact that it was debated and it would further be debated is a good omen,” she stated

    Having achieved a level of success in stemming corruption in the administration of fuel subsidy, she said that the Federal Government has a lady cleaning up the pension sector.

    The minister said: “We have to clean up the system. The problem lies in the old pension system. We are building, according to the PENCOM law, a new department that will take over the management of those pension funds and make sure that people no longer have access to mismanage the fund.”

    “The contributory pension scheme under the PENCOM has nothing wrong with it. The old pension scheme is what we are tightening up.”

    Anambra Governor, Peter Obi said that the NEC expressed concern over the growing cases of corruption in the country.

    The issue, he said, was extensively discussed and a resolution reached that a session should be organised that would afford stakeholders to speak up against the scourge.

  • Sovereign Wealth Fund a necessity

    SIR: For nations such as Nigeria, Equatorial Guinea, Congo[Kinshasha] Gabon, Angola among others where natural resources endowed to those entities are explored and the revenue accruable from the export of those rare resources stolen by successive political administrations and diverted to private pockets, it would be imperative for such countries to consider establishing Sovereign Wealth Funds. There is therefore need for

    strong institutional and legal frameworks to be enforced for the national assets saved in form of sovereign wealth funds used to build functional infrastructure to promote better life for the greatest number of the citizenry.

    The decision by Dr. Ngozi Okonjo-Iweala to push for the establishment of the sovereign wealth fund is indeed a push for the fundamental human rights of Nigerians to be respected especially if the objectives of establishing the fund are strictly pursued.

    It is universally acknowledged that one of the sure ways that government ensures respect for the fundamental human rights of citizens is the promotion of measures that give rise to good governance, zero-tolerance to corruption, and respect for accountability and transparency.

    The primary purpose of establishing the sovereign wealth fund by most developed societies is the creation of quality infrastructure designed to make life meaningful. If members of the political entity are provided with qualitative infrastructure to better their lives as citizens, it is safe to say that the sovereign wealth funds are necessarily established for the promotion and protection of the fundamental human rights to life; dignity of the human person; freedom of association; freedom of movement and other basic freedoms and rights that are inherent, universal, and also the right to development.

    According to a publication on wikipedia.org, the very first SWF was the Kuwait Investment Authority, which was established in 1953 before Kuwait secured its independence from the United Kingdom. The Kuwaitis’ Fund was created from crude oil revenues and is reported to be currently valued at about $250 billion. Kuwait is one of the best places to live in the world due to the aggressive infrastructural development achieved with the sovereign wealth fund.

    I must however conclude by stating that the attempt to collect over $9 billion from some international creditors including China as contemplated by the Federal Government is retrogressive and will return us to position of a slave nation.

    • Emmanuel Onwubiko

    Abuja