The Nigeria Sovereign Investment Authority (NSIA) has committed $100 million to the development of the power sector, as part of its focus on the infrastructure development in the country.
Making the disclosure at a lecture he presented at the Founders day of the University of Port Harcourt, Managing Director and Chief Executive Officer of NSIA, Mr. Uche Orji, said the NSIA was committed to the development of key infrastructure in the country.
He also disclosed while delivering the lecture titled: ‘The Role of Sovereign Wealth Funds (SWF’s) as a Tool for Economic Development’, that the NSIA had narrowed its immediate focus to five key subsectors out of 18 subsectors of infrastructure, namely power, motorways, agriculture, healthcare and real estate, adding that as capital grows, the authority would expand to other subsectors of infrastructure.
“We have incorporated NSIA Power Investment Company with a commitment from a large foreign-based private equity fund to match every dollar of NSIA investment with $2 of its own. We have since capitalised this business with an NSIA commitment of $100 million and are in advanced conversations to invest in both generation and distribution businesses,” Orji said.
He also said the authority had incorporated the NSIA Healthcare Investment Company aimed at diagnostic centres, specialist medical centres and co-location PPP in federal medical centres and teaching hospitals.
“To that extent we have signed memorandum of collaboration with a few hospitals including the University of Port Harcourt Teaching hospital and are scoping out areas of investment. We have signed about three other such agreements with a total of 18 in the works. We have also signed an MoU with General Electric to work together on healthcare investments,” he said.
He expressed optimism that the investment in healthcare would stem the tide of medical tourism and improve basic medical care.
“Our last checks show that at least 30,000 Nigerians spend over $900m on medical tourism with most of the areas of focus being Cardiology and Orthopaedic,” he noted.
The NSIA boss also said that the mandate of the agency was to manage three funds: the Stabilisation Fund, the Future Generation Fund and the Nigeria Infrastructure Fund.
He said, “The Act mandates a minimum of 20 per cent in each of the three fund buckets and 40 per cent at the discretion of management.
“The Board has decided to allocate 20 per cent to the Stabilisation Fund: 40 per cent each to the Infrastructure and the Future Generation Fund. We chose to balance the Future Generation Fund and the Infrastructure Fund as a way to recognise and balance the need of the current generation where the demand is for infrastructure and future generations which is about savings.”
He noted that the establishment of the Sovereign Wealth Fund (SWF) in the country had generated a lot of controversy, but said the other nations that established the same fund faced similar controversies especially at the beginning.
He also noted that the stabilisation mandate of SWFs was more important now in the era of globalisation and the rising incidence of synchronised economic slowdown.
“SWFs serve as a hedge in times of economic crises – we have several examples such as Abu Dhabi and more recently Norway during the European crises. These countries weathered the global economic crises without much pressure.
“Nigeria scaled the economic crises because we had saved up $22 billion in the Excess Crude Account. Today, I cannot believe that some people are asking why we need to save when we have so many similar issues. The answer is you do – otherwise by the next synchronised economic crises, it will be hard to find someone to borrow from – Ireland, Greece, Portugal, Spain and Italy crowded out sources of borrowing.”