Managing Director of the Nigerian Sovereign Investment Authority (NSIA), Mr. Uche Orji
By Obinna Chima (with agency reports)
The Managing Director of the Nigerian Sovereign Investment Authority (NSIA), Mr. Uche Orji, Tuesday unfolded plans to make spending on local infrastructure a key aim of the Sovereign Wealth Fund (SWF).
Orji, in a telephone interview with Bloomberg, also sought support for the fund whose take-off was stymied by opposition from the Nigeria Governors’ Forum (NGF).
According to him, giving priority attention to the funding of infrastructure is expected to revamp the nation’s infrastructural base and stimulate economic growth.
“It (infrastructure) is a crucial cornerstone of the mandate of the Fund. This is not saving money for saving sake; this is about impacting the lives of people in a way that will be very fundamental for the future of Nigeria,” he said without giving more details on the plans.
With a take-off capital of $1 billion, the SWF, which will for now operate side by side the Excess Crude Account (ECA), which currently has $7.3 billion in its till, has three ring-fenced windows.
These are Future Generations Fund, Nigerian Infrastructure Fund and Stabilisation Fund, that would each get 20 per cent of the total sum, while the allocation of the remaining 40 per cent would be determined by the board and management based on macroeconomic variables.
Apparently reacting to the opposition to the SWF that delayed the constitution of its board and management team, Orji said: “It is a crucial institution for the country and I think it’s important that it went through a robust debate. Our country is making progress, it might not be visible to people, but we’re building foundations and institutions.”
On how prepared he is for the job, Orji said: “I’ve run money and been part of a portfolio management team and this isn’t any different.
“All Nigerians must support it because the signal it sends to the international community is huge.”
Nigeria is among the last members of the Organisation of Petroleum Exporting Countries (OPEC) to set up a wealth fund, as it battles to reduce corruption and safeguard cash generated from crude production.
The fund, signed into law by President Goodluck Jonathan in May 2011, aims to replicate the long-term growth of funds such as the Abu Dhabi Investment Authority, Orji said.
“I am actually very close to many of the sovereign wealth funds in the Middle East; I have known many of them for many years and I have watched them grow. It takes time for a fund to build and get invested and contribute to growth, but you have to start somewhere,” he added.
Abu Dhabi, capital of the United Arab Emirates (UAE) and home to about seven per cent of the world’s proven oil reserves, set up its wealth fund in 1976 to diversify its sources of income by investing globally.
The wealth fund, known as ADIA, does not invest in the UAE or typically in the Gulf Arab region, and it had assets valued at $328 billion at the end of 2008, according to the New York-based Council on Foreign Relations.
Sovereign wealth funds such as the Qatar Investment Authority are boosting overseas acquisitions as oil prices hover near $100 a barrel. The country has taken a 12-per cent stake in Swiss miner Xstrata Plc and last month, bought a 22-per cent stake in a Chinese private equity firm, Citic Capital Holdings Limited.
The board and management team of the NSIA were constituted on August 28, about 10 months after the Federal Government announced the commencement of the SWF with $1 billion as seed capital.
The board of the NSIA has Alhaji Mahey Rasheed as chairman and Orji as its pioneer managing director.
Other members of the board include Arnold Ekpe, Jide Zeitlin, Mrs. Bili Awosika, Bisi Soyebo (SAN), Mr. Hassan Usman and Mrs. Stella Ojekwe-Onyejeli, who will serve as the fund’s chief risk officer.
Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in unveiling the team, had said that the constitution of the board was the product of a rigorous and transparent process that lasted almost a year.
The board was given a first term of five years.
Savings through the fund will enable the country to build its infrastructure and provide a buffer against volatility in oil prices, Okonjo-Iweala had said.