ESTABLISHMENT OF THE NIGERIAN SOVEREIGN INVESTMENT AUTHORITY (NSIA)

Section 2 of the Act establishes the NSIA as an independent body of full legal status with the objective of building a savings base for Nigerians; enhancing Nigerian infrastructure base and also providing support in terms of economic stress amidst other connected objectives.
Part III of the Act allows for the injection of the sum of One(1) Billion US Dollars drawn from the share of the Federation revenue of the Federal, States, the  Federal Capital Territory ,Local
Governments and Area Councils from the Federation Account for the initial take-off of the Fund.
FUNDS TO BE ADMINISTERED BY THE NSIA UNDER THE ACT:
Section 4(1) of the Act empowers the NSIA to manage three (3) classes of Funds. These are:

1. To manage the ‘Future Generations Fund”-Section 4(1) a of the Act defines the Future Generations Fund as a diversified portfolio of appropriate investments for the benefit of future generations of Nigerian citizens. The Fund is essentially of ensuring the legacy of future generations of Nigerians is not squandered by the present generations.
2. To manage the “Nigeria Infrastructure Fund’- Section 4(1) b defines this Fund as a portfolio of investments specifically related to and with the object of assisting the development of critical infrastructure in Nigeria that would attract and support foreign investment, economic diversification and growth.
3. To manage the ‘Stabilization Fund”-Section 4(1) c describes the Stabilization Fund as a portfolio of investments to provide supplemental funding for stabilization of the Federation.

GUIDELINES FOR ADMINISTERING EACH FUND:

1. FUTURE GENERATIONS FUND: Part IV of the Act confers the NSIA  with the power to develop a rolling five (5) year development plan incorporating the means of achieving the objective of providing for future generations of Nigeria. The NSIA can thus invest and reinvest proceeds, interest and dividends on portfolio investments in new or existing assets of the Future Generation Fund. The purpose of this reinvestment is to build a solid savings base for such time as when the oil and gas reserves of the country is exhausted.

As a means of ensuring transparency, Part IV furthers mandates the NSIA to publish its investment plans, policies and procedures in a manner as may be prescribed by its Board from time to time.

1. NIGERIA INFRASTRUCTURE FUND: Part V of the Act empowers the NSIA to develop a rolling five ( 5) year development plan with the aim of engendering the development of basic and essential infrastructure  such as power , agriculture , water roads et cetera through investment.

However, unlike the requirement under the Future Generations Fund, the NSIA may not disclose the details of their financial investments or co- investments with Companies prior to such investment until such a time as is considered appropriate by the Board. It is pertinent to state the following as regards the Nigerian Investment Fund:

1. The NSIA may make 10% investment in any fiscal year  of the funds in the Nigeria Investment Fund in such undeveloped sectors of the economy or regions of the country (tagged ‘development projects”)as a means of promoting economic development.
2. The NSIA may such rules and regulations guiding the submission and evaluation parameters of such development projects.
3. The Act permits the NSIA to engage the services of professionals and advisors as it may deem fit to ensure the viability of each potential infrastructure investment.
4. Funds under the Nigerian Infrastructure Fund may only be deployed as a security instrument in favor of a subsidiary or affiliate of the NSIA and not any other person, company or entity.

1. STABILIZATION FUND: Part VI of the Act designates the NSIA with the power to ensure make such investments and sell such assets for the purpose of stabilizing the national economy. In essence, the NSIA is to ensure that this Fund is available as a last-resort source of finance during periods of budgetary deficits. This stabilization function will thus ensure the smooth functioning of government and delivery of key services during periods where revenues from petroleum sales are less than the level anticipated and approved by the Legislature for any fiscal year.

OWNERSHIP OF THE FUNDS:
Section 32 (1) of the Act vests the ownership of the Funds in the Nigerian people represented by the governments of the federating units. The Act further forbids any of the tier of government as owners of the Sovereign Wealth Fund, from transferring, redeeming, assigning, disposing, selling, mortgaging, pledging or otherwise encumbering any of their interest in the SWF. This is ultimately aimed at preserving the exclusive ownership of the Funds in the Nigerian people.

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