Nigeria plans to boost capital of Sovereign Wealth Fund
Nigerian Finance Minister Ngozi Okonjo-Iweala said the federal government wants to increase the capital of its $1 billion sovereign wealth fund this year even as state governors protest allocations before 2015 elections.
“We want to look at what we can do however small to ensure a steady streaming of income into the sovereign wealth fund,” Okonjo-Iweala, 59, said in an interview Sunday in the commercial capital, Lagos, declining to comment on the possible amount. “This is a very political year, so how we do it and what we do, we need to watch and see what the best moment is.”
The Nigerian Sovereign Investment Authority was signed into law in May 2011 by Nigerian President Goodluck Jonathan.
While the fund managed by Chief Executive Officer Uche Orji, a former Goldman Sachs Group Inc., JPMorgan Chase & Co. and UBS AG banker, has started making investments, it is battling to increase in size from its initial capital.
Nigeria is targeting $5 billion for the wealth fund in the “medium term,” Okonjo-Iweala said last year.
Governors from Nigeria’s 36 states, including Lagos’ Babatunde Fashola, have said the fund is unconstitutional as all oil revenue must go to the federation account and be distributed between state, local and federal governments.
Jonathan’s ruling People’s Democratic Party is facing its biggest test since the end of military rule in 1999 after a series of defections to the main opposition party before the vote next year.
Okonjo-Iweala said she is also looking to replenish the Excess Crude Account, which holds the savings the nation makes when the oil price is above the benchmark price estimated in the budget. The account has dwindled to $2.28 billion at the end of last year from $8.65 billion a year earlier, according to a Jan. 16 finance ministry statement sent to the House of Representatives Committee on Finance.
“A couple of hundred million dollars” was added to the account in December and nothing this month, Okonjo-Iweala said. “A lot will depend on what happens with the leakages and theft in the oil sector and how we’re able to close that up.”