Oil Revenue Seriously Challenged – NSIA Boss Warns
- Rakes in N68bn in 18 months
BY COBHAM NSA, ABUJA – The Managing Director of the Nigeria Sovereign Investment Authority (NSIA) Mr. Uche Orji has warned that with oil revenue no longer sustainable, Nigeria must make efforts at creating alternative income streams for its economic development.
Orji said given that the future of oil which the country currently depends is seriously challenged, governments at all levels and Nigerians cannot continue paying lip service to issues concerning diversifying the economy for sustainable growth and development.
He said on its part, the NSIA is investing hugely in infrastructure and even more than ready to collaborate with international investors to invest in Mambilla Hydro- Electric Power Project.
Speaking at the 2019 Leadership Forum of Pilot Newspaper in Abuja, Orji however charged the Federal Government to exploit as much crude oil as it can and sell as much as possible before things go awry.
“My view is that the outlook for oil is challenged, giving the growing interest in electric cars and the diversification from hydro-carbon. I will advise the government to bring out as much as it can and sell as much as it can”, he said
Mr Orji, who also disclosed that the NSIA raked in about N44 billion as profit in 2018 and N24 billion in the first six months of 2019, assured that cash from the Sovereign Wealth Fund (SWF) is safe and securely kept for the nation’s overall well-being.
According to him; “The essence of having NSIA is to prepare the country for when hydro-carbon resources are no longer pre-eminent”, adding that the SWF has started hedging against crude oil price volatility because of the future of oil.
Assuring that the SWF cash is quite safe, Orji said NSIA “relates with reputable organizations”, adding; “risk management is something we take seriously. We keep our funds with JP Morgan in the United Kingdom. So, in terms of custody, they are safe.
“To us in NSIA, safety is more important, profitability is second. We relate with reputable retail organisations. Since the global market is volatile, we are very careful on our investment in equities in the United States and Europe.”
He however stated that; “We have to be careful about how far we stretch these funds. I would have loved that we have more than what we have now.”
On the Agency’s Investment in infrastructure, the NSIA Chief Orji said profit making from infrastructure does not yield quick returns as most people would normally expect.
Explaining that investment in infrastructure usually takes a while to mature and yield the desired profit, Orji said; “For instance, $10million was invested in the Cancer Centre at the University of Lagos Teaching Hospital (LUTH). It took us six months to get to where revenue is now feasible. It will take the next six months before profit is made.
“Some of the infrastructure that the NSIA is investing in are the Lagos-Ibadan expressway, Abuja-Kano expressway, Second Niger Bridge, East-West road and the Mambilla power project.”
