Nigeria sovereign wealth fund doubles in Q3

Uche Orji, Managing Director, Nigeria Sovereign Wealth Fund
Uche Orji, Managing Director, Nigeria Sovereign Wealth Fund

Assets held by Nigeria’s sovereign wealth fund almost doubled to 413.63 billion naira ($1.36 billion) by the end of the third quarter of 2016 from the beginning of the year, it said on Wednesday.

The Nigeria Sovereign Investment Authority’s (NSIA’s) assets rose 93.6 percent from 213.67 billion naira at the end of 2015, according to a presentation shown at a press briefing in Abuja.

The boost in a “fairly solid year” came after the NSIA deployed more capital, while “equity markets were very strong,” said Managing Director Uche Orji.

The Nigeria Sovereign Investment Authority is a Nigerian establishment which manages the Nigeria sovereign wealth fund, into which the surplus income produced from Nigeria’s excess oil reserves is deposited.

The sovereign wealth fund was founded for the purpose of managing and investing these funds on behalf of the government of Nigeria.

The wealth fund commenced operations in October 2012 and was set up by the Nigeria Sovereign Investment Authority Act, which was signed in May 2011.

It is intended to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians.

The fund was allocated an initial $1 billion USD in seed capital.

The Sovereign Wealth Fund is composed of three distinct funds or windows, each with specific investment and development objectives.

Of the initial $1bn, 85 percent of the funds will be distributed among the three windows with an initial 15 percent or $150 million remaining unallocated, to be assigned to either of the three funds as needed in the future.

According to Wikipedia, the funds will be invested in various securities.

The Stabilisation Fund was allocated an initial 20 per cent, while 32.5 per cent each went to the Future Generation and the Nigeria Infrastructure funds.

Stabilisation Fund – The Stabilisation Fund is intended to safeguard against budgetary deficits. It would be a last resort from which government may withdraw annually to meet shortfalls in the budget brought about by falls in oil prices or other budgetary constraints.

Future Generations Fund – The Future Generation Fund is a savings fund that will seek investment in long-term investments and assets to provide savings for future generations of Nigerians.

Nigeria Infrastructure Fund – The Nigeria Infrastructure Fund is expected to secure investments in the infrastructural development of the country in areas such as agriculture and other government directed projects.

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