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September 1, 2021

 

The Nigerian President, Muhammadu Buhari inaugurated a new board of Nigeria Sovereign Investment Authority (NSIA) on Wednesday, September 1st, 2021 and he gave them the mandate to make more investments that support economic diversification, in view of the forecasted drop in global oil prices to around $40 per barrel by 2030.

You would recall that Nigeria's economic performance is strongly connected to the international price of Oil, the country's GDP has a strong reliance on Crude Oil exportation. The direction of the global price of oil always determines how strong and healthy the economy of the supposed giant of Africa.

“The bar before you is very high and all of us are counting on you to deliver,” President Buhari was quoted as saying in a statement by his media adviser, Femi Adesina. “If you do, I assure you that the government and indeed all Nigerians will be unflinching in their support for you.”

  • The President reaffirmed his administration’s commitment to implementing long-term projects and programs that create jobs for Nigerians.
  • He noted that the full impact of most of the strategic projects started under his watch would only be felt long after he had left office.
  • President Buhari described the appointment of the nine-man board as a call to duty, action, and performance, stressing that they were eminently qualified for the job.

“This government operates on the agenda for long-term change which we all agree is inevitable. Change happens whether you are ready for it or not. As representatives of the federation, you are required to continue to drive the performance of the authority to deliver benefits to all Nigerians.

 


The President recounted that NSIA, as one of Nigeria’s premier economic institutions, was conceived to be a store of wealth that may be drawn upon at times of economic challenges, thereby encouraging external investors and lenders.

He expressed delight that so far the institution has discharged its mandate dutifully, and used the occasion to thank the last Board of Directors whose tenure ended in May.

President Buhari said the immediate past board “guided the organization through a critical stage of its existence and has left it standing as a credible world-class institution that turns out consistently good results.

  • “This administration took the very difficult decision to invest for the long term. We avoided taking shortcuts knowing very well that the full impact of most of the projects we started will only be felt long after we have left office.
  • “Accordingly, in the past four years, both the public and private sectors in Nigeria have partnered on strategic projects with the NSIA.”

The new board members are Farouk Gumel (North West), Non-Executive Chairman; Babatunde Sobamowo (South West), Non-Executive Director; Isiekwena Louis (South-South), Non-Executive Director; Ali Kadugum (North East), Non-Executive Director; Oniyangi Sulaiman (North Central), Non-Executive Director; and Ike Chioke (South East), Non-Executive Director.

In her remarks, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, said from the base position of $1 billion when the administration assumed office in 2015, NSIA now has around $3.5 billion in assets under management.

Analyst View

#The Nigeria Sovereign Investment Authority (NSIA) has the mandate of Nigeria people to manage the surplus income produced from Nigeria's excess oil reserves i.e difference between the budgeted and excess income on a yearly basis. 

#Petroleum exports account for approximately 90 percent of Nigeria's foreign revenue and 80 percent of government revenue. Given Nigeria's dependence on oil, the economy is significantly susceptible to the volatility of oil prices.