The Nigerian Sovereign Investment Authority (NSIA) is a Nigerian establishment that manages the Nigeria sovereign wealth fund, into which the surplus income produced from Nigeria's excess oil reserves is deposited. This sovereign wealth fund was founded for the purpose of managing and investing these funds on behalf of the government of Nigeria.
Flag of Nigeria
Establishment and Objectives
The fund was established by the Nigeria Sovereign Investment Authority (Establishment, etc.) Act 2011, signed in May 2011, and commenced operations in October 2012. 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 3 funds which were created by the NSIA have the shared goal of building a savings base for the Nigerian people, enhancing the development of Nigerian infrastructure and providing stabilisation support in times of economic stress:
- Stabilisation Fund (SF) - The objective of the Stabilisation Fund (SF) is to provide stabilisation support to the Federation revenue in times of economic stress.
- Future Generations (Savings) Fund (FGF) - The objective of the Future Generation Fund (FGF) is to invest in a diversified portfolio of appropriate growth investments in order to provide future generation of Nigerians a solid savings base for such a time as the hydrocarbon reserves in Nigeria are exhausted.
Financial Overview
The fund was allocated an initial US$1 billion in seed capital, and an additional $0.60 billion has been contributed to date by the current administration. Nigeria's SWF was brought into law in 2011 via the Nigeria Sovereign Investment Authority Act and is expected to replace the ECA. The act authorized the establishment of the Nigeria Sovereign Investment Authority, giving it jurisdiction over the country's excess petroleum reserves.
Read also: Atlanta Nigerian Passport Services
Leadership
Mr. Aminu Umar-Sadiq was appointed managing director and chief executive officer of the NSIA on Friday, 30 September 2022. He replaces Mr. Uche Orji, the pioneer managing director and chief executive officer who served out two terms in office, leading the NSIA for a decade. The new managing director will be supported by Mrs. Olubisi Makoju who was appointed executive director, Operations and Corporate Service and Mr. Kolawole Owodunni, appointed executive director, Investments. Prior to the current Management team, Uche Orji was appointed as the pioneer managing director and chief executive officer of the NSIA on 2 October 2012. He was appointed alongside Alhaji Mahey Rasheed who served as the chairman of the inaugural board of directors, Mrs Stella Ojekwe Onyeji as executive director and Chief Risk Officer (later expanded to Chief Operating Officer) and Mr.
The second board of the Authority led by Mr. Jide Zeitlin as its Chairman operated from 12 May 2017 to 11 May 2021 while the current Board is led by Mr.
International Collaboration
The NSIA was invited to request observer status at the International Forum of Sovereign Wealth Funds (IFSWF), with the intention of eventual membership.
Investment in Real Estate and Infrastructure
The Nigerian real estate sector is set to receive a share of the country’s abundant oil revenue through the recently established Nigerian Sovereign Investment Authority (NSIA). The influx of capital into the real estate sector will be received from the Nigerian Infrastructure Fund and invested in Affordable Housing and the Nigerian Mortgage Refinance Company. The Nigerian Infrastructure Fund, one of three funds created by the NSIA aims to invest in infrastructure projects in Nigeria that meet targeted financial returns and contribute to the development of essential infrastructure in Nigeria.
The Nigerian Sovereign Investment Authority has established a $1bn fund to invest in real estate, including affordable housing. The fund aims to address Nigeria's chronic under-supply of affordable housing by investing millions of units and achieving a reasonable return. It will also support the Nigerian Mortgage Refinance Company, which will promote affordable housing and create jobs.
Read also: Experience Fad's Fine African Cuisine
Affordable Housing - The fund is currently is in negotiation for several pieces of land that will allow them to build much needed affordable housing. High construction costs and land prices in Nigeria have continually put developers off affordable housing and pushed them towards the more lucrative luxury/high end residential sector. This often act as a barrier to the construction of affordable housing all over the country.
Nigerian Mortgage Refinance Company - The Nigerian Infrastructure Fund is one of the lead investors in the Nigeria Mortgage Refinance Company. It has been reported that the investment will be $10m.
NSIA Plans Investment Vehicles For Infrastructure Funding
Global Trends in SWF Investments
Other SWFs across the globe are also following the real estate investment trend. Sovereign wealth funds around the world allocate more than $180bn to the asset class, and therefore represent a significant source of potential capital for private real estate fund managers. The world’s largest SWF, Norway’s Government Pension Fund Global (GPFG) -which notably owns 1.3% of the world’s listed companies and invests in 8000 companies in 82 countries (including Nigeria!)- has also been given permission to invest in real estate. It was reported that it will continue to build its North American direct property portfolio as it slowly works towards its 5% target allocation.
The Nigerian Sovereign Investment Authority release their 2013 Annual Report in June this year.
The Stabilisation Fund is intended to safeguard against budgetary deficits.
Read also: Philadelphia Food Truck
The NSIA is governed by a Board of Directors that manages the business of the Authority.
| Fund Name | Objective |
|---|---|
| Stabilisation Fund (SF) | Provide stabilisation support to the Federation revenue in times of economic stress. |
| Future Generations (Savings) Fund (FGF) | Invest in a diversified portfolio to provide future generations of Nigerians with a solid savings base. |
| Nigerian Infrastructure Fund | Invest in infrastructure projects in Nigeria that meet targeted financial returns and contribute to the development of essential infrastructure. |
