The falling prices of crude oil in the international market has compelled the Federal Government to stop the funding of the Sovereign Wealth Fund (SWF).
Managing Director of Nigeria Sovereign Investment Authority (NSIA), Uche Orji, said on Wednesday in Abuja after he led other management staff to a meeting with President Muhammadu Buhari that it made little economic sense to be saving when the price of oil had even fallen below the benchmark set for the 2015 budget.
The SWF took off three years ago with a $1 billion grant provided by the Federal Government.
Orji told State House correspondents that with the current crude oil prices, it would be unrealistic for the government to make additional contribution to the fund.
“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.”
According to Orji, from the takeoff grant, the SWF management has been able to invest the funds in profityielding ventures. He said last year, the NSIA, operators of the fund, recorded a turnover of about N15.77 billion during its 2014 operating year.
The fund records show in the 2013 business year also reported a turnover of N525 million. On their discussion with Buhari, he said: “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 to 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 Corporation as our lead financial adviser and engaged successfully with about five or six lenders so far and some of them have commitment.”
Speaking on the Second River Niger Bridge, Orji said through its wholly owned subsidiary, NSIA Motorways Investment Company (NMIC), the NSIA was collaborating with the Federal Ministry of Works and Julius Berger Investments (JBI) as joint sponsors on the financing, development and construction of the bridge.
“The progress we have made so far is in preparation of the project, making sure that the environmental impact assessment is made, the bridge properly designed and funded through our financial structuring. It is the project preparatory state that we are going into and that has caused us $2.2 million.
“This is a big project; the project we are looking at is 11.9km, the current Niger Bridge is one lane going and one lane coming and what we are building is three lane coming and going, so it a big project. It is a four-year construction period and we are looking at 2020 for the completion of the project.”
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