- NSIA: Governors Backed Investment of $250m NLNG Dividend
The Nigerian Sovereign Investment Authority (NSIA) has said that it invested $250 million of the dividend that accrued to the 36 states of the Federation in 2016 from the operations of the Nigeria Liquefied Natural Gas Limited (NLNG) with the support of the state governors.
This revelation is a strong indication that the governors have stopped their opposition to the creation of the NSIA.
NSIA’s Managing Director, Dr. Uche Orji, told the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Waziri Adio, that the sovereign wealth fund (SWF) agency has a diversified portfolio of medium and long term revenue yielding projects where it invested the funds.
A statement from NEITI in Abuja explained that Adio visited the NSIA to work out partnership modalities on management of revenues Nigeria gets from extractive industries operations but often given to the SWF.
The NEITI also stated it got the National Orientation Agency (NOA) involved in the partnership framework to promote transparent and accountable management of funds in the SWF.
Similarly, it said that it took the decision to seek the partnerships after it published a recent Occasional Paper, which underlined the need for Nigeria to have a robust savings from the revenue it gets from her extractive industries.
In the publication, NEITI drew public attention to the fact that Nigeria failed to save enough oil revenues to sustain economic activities when oil prices were quite high.
“Also problematic is the level of consumption relative to non-oil exports. Nigeria typically responds to high oil prices with equally high but manifestly unsustainable level of consumption. The absence of sufficient savings left Nigeria severely exposed when the price of oil, Nigeria’s main source of government revenues and foreign exchange, started to plunge in 2014,” said the publication.
Adio equally added that its publication of the paper was within its legitimate mandate as an agency charged with the responsibility of ensuring prudent management of revenues derived from natural resources.
He clarified that in carrying out this function, NEITI focused mainly on Nigeria’s strategic interest and not necessarily on the work of any agency including the NSIA.
In his response, Orji explained that the NSIA now enjoys the backing of the governors, and has equally established frameworks for good corporate governance, risk management, transparency, and accountability, as well as a solid governance structure that has attracted credible partners, notable investors, and private equity funds to it.
“NEITI has a voice that resonates with policy makers and its other stakeholders. We found the publication exceptional and commendable. We are here to ask for closer collaboration between the NSIA and NEITI in the discharge of our individual mandates while working together for the common good of our country,” he said.
“The Authority was set up to receive, manage and invest in a diversified portfolio of medium and long term revenue yielding projects. NSIA only invests on projects with huge potentials for direct positive impacts to the development of critical infrastructure in Nigeria, inflow of foreign investment, economic diversification, growth and job creation,” Orji explained.
He further revealed that that the Nigeria Governors’ Forum that was initially opposed to its mandate, is one of its greatest supporters at the moment, adding that “the $250 million we invested in 2016 came from the state governments’ share of the NLNG dividend.”