Agric: FG Parleys Govs on SWF, Seeks World Bank’s N82.5bn

28 Sep 2011

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Minister of Agriculture

By  Kunle Aderinokun

The Federal Government has said  it had negotiated  with  the World Bank for an investment of  $500 million (N75 billion)  in  agriculture and  another $50 million (N7.5 billion) to support the environment sector .

Apart from the fund,  which totaled  $550 million  (N82.5 billion), the  government also said it was establishing  a  public private  arrangement with  the International Finance Corporation (IFC), and a group of investors to finance the Second Nigeria Bridge.
IFC is the private sector  arm of the World Bank.

It also emerged that the disagreement between the Federal  Government and  the 36 state governors on the establishment of the Nigeria Sovereign Investment Authority (NSIA) Act 2011 would be soon resolved as the Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, acting on the directive of  President Goodluck Jonathan, would meet with the governors    to iron things out. The NSIA Act 2011 is otherwise called the SWF law.

These facts emerged at a press  briefing on the outcome of the 2011 IMF/World Bank  Annual  Meetings by Okonjo-Iweala   in Washington DC.

Okonjo-Iweala noted that while the discussions on the World Bank financing in the aforementioned two sectors of the economy was not conclusive, it looked “quite positive.”

According to her, “ we had discussion with them to see if they  can advanced about $500 million to support the sector and also environment  because they see agriculture and environment sectors linked and the minister of agriculture  is desirous of having support. So we entered into discussion for $50 million to support  the work of environment and $500 million for agriculture. It’s not concluded but it’s looking quite positive. We will  conclude it as soon as we get to Nigeria and the new country director arrives.”

Okonjo-Iweala  said there was also a very important and interesting meeting with both the IFC the World Bank treasury and representatives of a group of investors, who are interested in public private partnership projects in Nigeria.

The group, she revealed, were specifically  interested in investing and financing the second Niger Bridge.

“ This is very promising and we had discussed with them on what are the next steps. If the IFC comes in  to try and  help manage this project, it could turn out to be one of the best public private partnership ventures that Nigeria   will do and it will set an example that Nigeria is capable of delivering a clean approach to PPPs and that will unlock investment in other PPP.

“ We need to get home and discuss with the minister of trade and investment and other  colleagues in the Economic Management and of course present to Mr. President what we have done and then  take it from  there. We had discussions with Minister of Works  before coming and we reconvene and take it from there,” she enthused.

On the Sovereign Wealth Fund, the finance minister the Federal Government was  in dialogue with the governors   and would meet with them in a couple of days and let them realise the importance of  SWF to the economy  .

She said: “ We’ve been talking to the governors and the President has been talking to them.  We strongly believe that we all have one objective, which is to make Nigerian economy work well for the benefit of everybody.

“ We are meeting in a couple of days and to interact with them  bit more and explain. Following that at the next Economic Council taking place on Sep 29. The President had asked me to make presentation formally. All these dialogues are a good thing so that we can understand each other.”

Okonjo-Iweala further revealed that, the government had been working on the implementation guidelines for the sovereign wealth fund  through a working group led by Mr. Fola Adeola .

She added that  there was another group  working with the former Minister of Finance and Executive Director of the World Bank,  Dr. Mansur Muhtar and the Ministry of Planning as well as international experts on the SWF.

The implementation guidelines, according to her, would be launched  soon.
The 36 state governors had asked for the stoppage of SWF law, which they argued was  illegal and unconstitutional .

The governors contended that the Constitution in Section 162 stipulates that all revenues accruing to the Federal Government must be paid into the consolidated revenue fund (CRF) domiciled at the Central Bank of Nigeria (CBN) and shared to the three tiers of government and  as such  they declared, null and void,  the SWF law.

The Nigeria Sovereign Investment Authority (NSIA) Act 2011 passed into law  in May this year, is aimed at building a savings base for Nigerian citizens. It also seeks to  enhance the development of Nigerian infrastructure and provide stabilization support in times of economic stress .

Tags: Business, CBN, CRF, Featured, Nigeria, NSIA, SWF

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