NSIA 2017 outlook to focus on social infrastructure investment

Hauwa Noroh Ali , Abuja

The Nigeria Sovereign Investment Authority (NSIA) says in order to fast track economic growth in 2017, the agency will focus on driving foreign investments through social infrastructure.

The Managing Director Mr Uche Orji at a media parley  on Wednesday in Abuja, said that projects with capabilities to make nationwide impacts had been chosen.

He said the priority areas were agriculture, healthcare, motorways, real estate and power.

According to him, others include communications, aviation, rail, waste and sewage, gas pipeline, ports, industrial parks, mining and refining.

He said: The organisation planned to increase its domestic infrastructure investment, adding: “There are compelling opportunities in today’s environment. We have to focus on social infrastructure, such as affordable housing”.

He said NSIA had $255 million in the stabilisation account which the government is at the liberty to borrow whenever it deems fit. Of the amount, 20 % is always in liquid as required by law so that the equity holding governments can draw from it.

“The way stabilisation fund is structured, we make sure the fund is not put in a long term investment  which take years to mature.  Right now, we have $255 million in Stabilisation Fund, so if the government needs it will go through the National Economic Council.  That money is available.”

Orji added: “We are required by law to keep 20% of our fund in stabilisation  account. Obviously, we are not there yet because government is injecting capital into NSIA. The option is left for the government to take. The law requires the Minister of finance to put it into writing, “we need x y z amount” and take it to NEC for approval and we are under mandate to honour it.”

Orji also spoke on the financial involvement of NSIA in the Nigeria Mortgage Refinancing Company and the Family Homes Fund in collaboration with the Ministry of Finance to lower cost and improve access to mortgage.

He said the additional funding of the agency beyond the 1.25 billion assets under its management would be critical to set the pace for higher levels of infrastructure investment, providing buffers against macro-economic shocks.

Over $300 million FDI

He said that The Nigerian Sovereign Investment Authority ( NSIA) had secured Foreign Direct Investment commitments (FDIs) in excess of $305 million adding that these Foreign Direct Investments (FDIs) had been sealed to provide financial investment in agriculture, infrastructure credit financing (infracredit) and estate development.

Orji said the NSIA secured $105m for agriculture. “These are commitments people have signed, most of  them were signed and the money still held offshore. As we close transactions, the money will come in. For real estate, $100m has been secured; for  infra-credit another $100m of contingent credit secured. These are the ones that are handy today. There are still ones that would come but when they come, they come,” he said.

“NSIA will invest 760 million dollars in the second Niger Bridge project being built in conjunction with Julius Berger.

“The privatisation of the Nigeria Commodity Exchange between Bureau of Public Enterprises (BPE) and NSIA is expected to be concluded this year at a cost of 10 million dollars.

“We will also directly invest in Customs National Single Window project to improve the technology platform of customs to increase revenue collection and enhance efficiency.

“Also, NSIA and Old Mutual will commit 500 million dollars for investment in commercial and retail assets. We will also invest in the middle market industralisation projects to stimulate the economy,’’ he said.

On Agriculture, he said that NSIA had also pledged to partly fund 100 million dollars Agricultural Finance in Nigeria (FAFIN) initiative, in collaboration with German Development Bank and the Ministry of Agriculture.

He said another 25 million dollars had been invested in a 200 million dollars Nigeria Agriculture Fund in partnership with a South African firm which had already committed 25 million dollars.

“The NSIA has also invested 286.4 million dollars in a fertilizer blending project in partnership with FEPSAN.

“The objective is to deliver fertilizer to farmers on time and at a reasonable price of N5,500 per 50kg bag of NPK 20:10:10 down from 30 to 40 per cent from current price.

“Our strategy is to import only the ingredients that cannot be sourced locally and blend it with other available ingredients that makes up a fertiliser.

“For the wet season, we are targeting one million metric tons in five batches of 200,000 tons each starting in February this year.’’

According to him, our target is to eliminate subsidy on fertilizer.

To this effect, Orji said that there were presently 10 blending plants with the total capacity of 1.94 million metric tons with the hope of establishing more plants.

Orji noted that the NSIA was in the process of allocating  $10 million to revamping the moribund Nigeria Commodity Exchange (NCX) for optimum operation  before its sale.

On Commodity Exchange, Orji  noted that the injection of capital should not be misconstrued for halting privatisation, noting that the Exchange was being revived to attract value as against selling it as scrap.

2nd Niger Bridge

On the much talked about Second Niger Bridge, Orji said it was abandoned because of paucity of funds, and the change of government. Some of the grey areas have been settled and the contractors have been mobilised back to site, he said.

He was optimistic that the project would be completed in 2020 as scheduled but he would have better information on that after the National Economic Council (NEC) approves a new financing arrangement for it.

“There was a pause, we went through a phase and we have resolved some of the issues; we are now working together.The contractors have been mobilised  to go back to work. There is a new financing strategy we are going to be discussing with the Ministry of Works. If that is achieved, you see progress. There was a bit of time lost , but we are back  on track but the financing structure will  change. Once it is approved, it will move faster. Are we still looking up to completion date of 2020?  I think so . I will be able to give a definitive answer in another three months as soon as our financing plan is approved.”

According to Orji, “the agency recently submitted its report to the governing Council at the 74th session of the National Economic Council which approved $250 million additional capital to it (second Niger Bridge)”

To Orji, 2017 will be a year of harvests.