Volatile oil price affects FG’s funding of NSIA

Volatile oil prices have prevented the Federal Government from contributing to the Nigerian Sovereign Investment Authority (NSIA) after the initial deposit, Uche Orji, Managing Director and CEO of the fund said on Wednesday.
Immediate past President Goodluck Jonathan led administration had kicked off
the NSIA in 2013 with an initial contribution of $1 billion in seed capital from the nation’s excess crude account, with a commitment of continuous funding from both the states and Federal Government.
The NSIA was set up to receive, manage and invest in a diversified portfolio of medium and long term revenue of the Federal Government, state government, Federal Capital Territory, local government and area councils in preparation for the eventual depletion of Nigeria’s hydrocarbon resources, as well as the development of critical infrastructure.
[socialpoll id=”[socialpoll id=”2293909″]”] However, oil prices have been unstable, stifling government’s resources as Nigeria currently almost solely depends on revenue from oil. It is still not clear if the Buhari led administration will be willing to continue with the fund.
Orji, who spoke with journalists at the Presidential Villa, Abuja, after briefing President Muhammadu Buhari on the activities and investments of the fund so far, said the fund was existing because it was created to go through tough times.
“Oil price is below benchmark and because we are supposed to be funded when the oil price is above benchmark, so it will not make any sense for the government to make any contribution now when the oil price is still low”, he said adding, “We haven’t gotten additional fund from the government but the fund is structured in a way that it can go through hard time. We all know that the oil price is volatile, it comes up and goes down but the fund is structured in such a way that it can remain continuously profitable”.
Orji, who told journalists that despite the lack of funding, the NSIA had so far made a turnover of N15.7 billion profit, saying that they had briefed the president on alternative ways of supporting the fund, which will be made known to the public when the time is right.
On efforts to attract more funds, he said the NSIA had successfully engaged the African Finance Cooperation, a multilateral development finance institution, as its lead financial adviser as well as about five or six lenders “so far and some of them have commitment”.
The NSIA also briefed the president on commitment 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”, he said.