FG to Increase Sovereign Wealth Fund to $5bn by 2016
Ngozi Okonjo Iweala, Finance Minister
Obinna Chima with agency report
The Federal Government Tuesday disclosed plans to increase the seed capital of the Sovereign Wealth Fund (SWF) from $1 billion to $5 billion in the next three years.
Minister of State for Finance, Mr. Yerima Ngama, said this in an interview with Bloomberg in London.
According to Ngama, the differences between the Federal Government and state governors, which have delayed additional transfers to the fund, may soon be resolved by expanding the representation of states on the Board of the Nigerian Sovereign Investment Authority (NSIA).
“Once we look at the board and say, okay, state governors, bring your own representatives on the board, I think it will solve it,” he added.
The SWF, which at the moment operates side by side the Excess Crude Account (ECA), has three ring-fenced windows.
These are the Future Generations Fund, Nigerian Infrastructure Fund and Stabilisation Fund, which would each get 20 per cent of the total sum, while the allocation of the outstanding 40 per cent would be determined by the board and management based on macroeconomic variables.
Following the approval of its strategy document and the progress made with its investment policy guidelines, the Ministry of Finance had last December, announced that the SWF was expected to commence investment in a variety of instruments by March 2013.
Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had said that the strategy document was ratified by the board of the NSIA chaired by Alhaji Mahey Rasheed.
Managing Director of the NSIA, Mr. Uche Orji, had also said that spending on local infrastructure would be a key aim of the fund.
According to him, giving priority attention to the funding of infrastructure is expected to revamp the nation’s infrastructure base and stimulate economic growth.
Quoting the International Monetary Fund (IMF), Ngama declared that the country’s economic output is forecast to expand more than 6.7 per cent this year.
He also said that the budget, yet to be signed by President Goodluck Jonathan, is based on a 6.5 per cent GDP outlook for this year.
He also reiterated plans by the Federal Government to issue a $1 billion Eurobond and a $500 Diaspora Bond after the National Assembly works out the details.
“The parliament has already approved the borrowing plan, though it still needs to streamline certain areas,” he said.