Second Niger Bridge
Construction work at the Second Niger Bridge will commence before the end of the year, The Managing Director/Chief Executive Officer, the Nigeria Sovereign Investment Authority (NSIA) Mr. Uche Orji, has said.
Orji dismissed reports that the project, whose foundation was laid by President Goodluck Jonathan in March this year, has been abandoned.
The chief executive of NSIA assured Nigerians that the project would not be abandoned.
He spoke at the launch of the 2014 Nigerian banking sector report by Afrinvest Securities Limited.
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Orji revealed that the NSIA recently completed the payment of compensation to the landlords, adding that the main work would soon commence.
The NSIA boss explained: “The first thing we had to do was to pay compensation. This bridge is not a small bridge. It is a 12-kilometre bridge plus another 28 kilometres of access road, so 40 kilometres construction is significant.
“So most of the year was spent in paying compensation to people who own the land and before the end of the year, you will start to see serious construction. It is going to cost $700 million and will be funded over the next four years.”
The NSIA boss added that the NSIA was considering investing in the Lagos-Ibadan Expressway, which according to him is a significant infrastructure for the country.
He said that the agency would not invest in the oil and gas sector at the moment, “because we are here to provide stabilisation support to oil and gas, which is the main source of revenue to the economy.”
He disclosed also that with 22 per cent stake in the Nigerian Mortgage Refinancing Company, the NSIA is the biggest investor in the mortgage company.
“We have not made any investment in power and there is a reason for that. But we are investing in gas and in the next few weeks.
“Also, we are setting up a new fund called the Nigeria credit enhancement facility. At NSIA, we can’t provide guarantees, however, we can invest in few areas that can provide guarantee,” he said.
He reiterated that the NSIA has the responsibility to invest in three funds namely the stabilisation, the future generation and infrastructure funds.
The first is the stabilisation fund which was designed to provide stabilisation support to the government in times of economic stress.
The stabilisation fund currently holds 20 per cent of NSIA’s assets and is fully invested and allocated to three managers, he explained.
“The returns on the stabilisation fund are not high because it can be withdrawn at short notice to provide support for government. The performance of that fund is just under two per cent, which is really good, given the way the fund is designed,” Orji said.
He however said that for the future generation fund, about 40 per cent of the assets had been allocated to five major asset classes.
He said, “We have 25 per cent of it in equities which is split 10 per cent in developed market and 15 per cent in emerging markets. Our fundamental view is that there is more growth to be derived from emerging markets, to the extent that we have seen in developed markets.
“Part of the stabilisation fund is in hedge fund, some in private equity. 30 per cent of the assets, across various asset classes are in Nigerian banks.
“We must remember that the essence of the NSIA is to provide a hedge to the Nigerian environment and so we cannot put everything here. You cannot intervene in what you have internally; it has to be what we have externally.”
According to Orji, under the infrastructure fund, the NSIA has invested in motorways, agriculture, healthcare, real estate and gas-to-power would be the fifth sector.
The NSIA was established to manage the Nigeria sovereign wealth fund, into which the surplus income produced from Nigeria’s excess oil reserves is deposited.
This sovereign wealth fund was founded for the purpose of managing and investing these funds on behalf of the government of Nigeria. The wealth fund commenced operations in October 2012 and was set up by the Nigeria Sovereign Investment Authority Act, which was signed in May 2011. It is intended to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians.
