Why govt can’t contribute to SWF now, by Orji
UNTIL crude oil price is above the benchmark again, it will not make any sense for the government to make more contribution to the Sovereign Wealth Fund (SWF), the Managing Director, Uche Orji, has said.
Orji made the comment yesterday at the Presidential Villa, Abuja after he led other management staff to a briefing session with President Muhammadu Buhari.
Speaking to State House correspondents, he said: “Oil price is below benchmark, and because we are supposed to be funded when the oil price is above benchmark, it will not make any sense for the government to make any contribution now when the oil price is still low.”
Three years ago, the Federal Government provided a take off grant of about $1billion to the funds. Orji confirmed that the SWF generated close to N16 billion as interest last year.
According to him, from the take off grant, the management has been able to invest the funds into profit yielding ventures which have since been paying off. Orji said that last year alone, the Nigeria Sovereign Investment Authority (NSIA), operators of the fund, recorded a turnover of about N15.77billion for its 2014 operating year. The Fund’s records show the 2013 business year reported a turnover of N525 million.
The managing director explained: “We met with the President to brief him on the activities and the investments of the NSIA. We also discussed the commitment of the NSIA on the Second Niger Bridge, health care, agriculture and power. We also sought his support where his intervention is required and it was a successful meeting with the President.
“We have hired African Finance Cooperation as our lead financial adviser and engaged successfully with about five or six lenders so far and some of them have commitment.”
It was learnt that there are currently 84 SWFs managing assets worth over $7 trillion globally. African SWFs account for around 2.3% of all SWF assets globally (Algeria and Libya account for more than 80% of African SWFs). In the last four years, Nigeria, Ghana and Angola have established SWFs, managing $1 billion, $480 million and $5 billion respectively.
Asked to explain the role of the Fund in the second River Niger Bridge, Orji said through its wholly-owned subsidiary, NSIA Motorways Investment Company (NMIC), the NSIA is collaborating with the Federal Ministry of Works and Julius Berger Investments (JBI) as joint sponsors on the financing, development and construction of the Second Niger Bridge.