NISA – FG Joins 50 Nations With Investment Plan

May 19, 2011 57 Views Comment Off

Minister of finance Mr. Olusegun Aganga has applauded yesterday’s passage of the bill for the establishment of Nigerian Sovereign Investment Authority (NSIA), saying that it will pave the way for appropriate investment and utilization of the nation’s oil revenues.

The House of Representatives’ approval of the bill for the establishment of NSIA yesterday followed the earlier passage of the bill by the Senate last week, thereby giving requisite legislative backing to the bill introduced by the executive arm of the government.

With this, Nigeria has joined 50 other resource-rich nations with investment and savings plan.

Aganga maintained that when established, the NSIA will enable Nigeria to shoulder the risks associated with high oil revenues.

According to the minister, “Our oil wealth is a tremendous blessing. But while high oil prices can bring much needed revenue to Nigeria to finance growth and development, it also brings many risks, especially due to its inherent volatility and the impact that boom and bust revenue cycles can have on inflation, fiscal planning, and budgetary prudence.

” The NSIA will help Nigeria mitigate these risks in the same way that sovereign wealth funds are now a fundamental component of macroeconomic wealth management by natural-resource-rich countries around the world.

” Nigeria now joins the other OPEC states and more than 50 other natural-resource-rich countries in having a national savings plan for managing and augmenting its natural resource wealth over time for the benefit of all Nigerian citizens.”

He assured that the NSIA will be owned by all Nigerians and its benefits will be shared by all Nigerians, in this generation and for generations of Nigerians to come, according to a release by the Minister’s Special Assistant on media, Mr. Okwudili Ojukwu.

While speaking further on the Bill, Aganga, said: “As a nation, we need a strategy to transform this finite wealth into an investment in the growth and development of our country, so that we can achieve ever-growing wealth for our generation and for generations of Nigerians to come.

“The Nigerian Sovereign Investment Authority is that strategy. I salute the President and our leadership for their vision, extensive consultation and evaluation in drafting the NSIA legislation and their foresight in approving the creation of the NSIA.”

He explained that in addition to the existing US$1 billion already approved as seed capital, going forward the government of Nigeria will set aside excess oil revenues every month – those over and above the amount needed to fund national budget – and invest those revenues in the NSIA.

He said NSIA will then allocate those revenues to three separate ring-fenced funds: the Nigeria Infrastructure Fund; the Future Generations Fund and the Stabilization Fund.

Giving details of the categories of savings, he said a minimum amount of the total fund will be allocated to each of the three funds to ensure that each of these goals were met over time.

“The Nigeria Infrastructure Fund will work towards bridging the national infrastructure gap, acting as a lead investor for domestic and international partners seeking to make investments in the development of critical infrastructure across Nigeria.

“The Future Generations Fund will build an intergenerational savings base by investing in longer term assets that generate a rate of return to accumulate wealth for the next generations of Nigerians. The Stabilisation Fund will act as a last-resort source of finance during periods of fiscal deficit to protect the integrity of budget.This stabilisation function will ensure the smooth functioning of government and delivery of key services during periods where revenues from petroleum sales are less than the level anticipated and approved by the National Assembly.

” With the NSIA, Nigeria will be able to reduce its longer term dependency on oil by investing its oil revenues on an ongoing basis in infrastructure and other economic development projects that will help transform Nigeria into a vibrant and diversified economy”, he assured.