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..set to crash fertiliser price to N5,500/bag
…to make $10m pre-privatisation investment in Commodity Exchange
Authorities at the Nigeria Sovereign Investment Authority (NSIA) say they are rebalancing investment structure of the country’s $1.25bn Sovereign Wealth Fund to now favour more domestic commitments following huge opportunities they have seen within the local market.
Uche Orji NSIA Managing Director said on Wednesday that those investments would include massive commitments in the country’s poorly funded infrastructure, agriculture, real estate, power, health care system, water resources, mainstream oil and gas, among very many other key sectors of the economy.
The NSIA, as today invests less than 10 percent of its portfolio in the local market and the remaining foreign.
Briefing journalists in Abuja on the Authority’s progress and outlook for 2017, Orji said “We are balancing social and commercial returns. We want the investments to be opportunity driven,. The reality is that currently, we are less than 10 percent in domestic market and we plan to increase that significantly.
“We have this broad area of possible investments but we focused on agriculture, health care, real estate and power. Of late we are adding a few new sectors that were not in the initial focus. So you are going to see us add mainstream oil and gas – gas pipeline and storage and processing and potential refining.
“These are new areas we are beginning to get ourselves involved in. You will also see us in some water resources projects soon. The areas of investment is expanding, so communications and even governance process automation is also becoming an area of interest because we see opportunities to improve efficiency in the country.
“So we are driven by the huge local investment opportunities and not the volatility in the currency market which is not peculiar to the naira,” he stated.
The NSIA is presently focusing on ensuring farmers receive fertilisers on time and at a resonate price without subsidy “We are Working to deliver one metric tonnes of fertiliser for this wet season and deliver it 30-40 percent below market price.
“Today the famers pay about N8, 000 to N9,000 per bag of fertiliser but we intend to sell at N5,500 per bag around May, June at the peak of rainy season,” Orji told journalists.
Meanwhile the NSIA has so far attracted over $375m investments into the country between the 2012 that it full became operational and September 2016 and earned Nigeria over N180bn from its Sovereign Wealth Investments.
Orji confirmed that for agriculture fund, the NSIA has attracted some $175 million Foreign Direct Investments, most of which, according to him are agreements that have been signed but the monies are still held offshore. “As we now close transactions, the money will come in,” he stated. “For real estate, Orji announced that though they are “there yet”, but have got about $100 m commitments. He further announced that for the Infrastructure credit, the NSIA has got $100m for contingent capital contribution.
Recall that NSIA earlier in the year announced the establishment of a $200 million infrastructure credit enhancement facility in Nigeria (“InfraCredit”) conceptualized since 2014.
Incorporated as Infrastructure Credit Guarantee Company Ltd, InfraCredit was established by NSIA and GuarantCo to provide guarantees to enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure related assets
in Nigeria.
It will act as a catalyst to attract the investment interest from pension funds, insurance firms and other long term investors, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis and benefits from private sector governance. Orji also mentioned that the NSIA has re- commenced implementation ofthe second Niger Bridge which President Buhari’s administration halted at some point but said the government is reworking the financing structure.
He also assured that the NSIA will support government funding with its $256m stabilisation fund whenever it is called for as allowed by law but that it does not appear the government is in presently in need of the funds considering the fresh $250m capital that was approved for the Authority by the National Economic Council just on early in the week.
He also disclosed that the government is currently looking at the possibility of funding the NSIA not just with cash but assets, saying “all kinds of funding modules are being discussed for the NSIA but are still at the early stage.” Orji further disclosed that the NSIA has three strategic pillars with which it invests in infrastructure -The first is direct investment in projects, the second is a Co investment strategy and third is creating institutions that support infrastructure investments in Nigeria.
The NSIA in direct intervention has invested in the second Niger Bridge, commodity exchange, working the LUTH to create a centre for advanced medicine, as well as the Nigeria customs and Nigeria Ports Authority to create a single window to ease processes at the country’s ports.
