Nigeria, Africa’s most populous country, is aiming to create a sovereign wealth fund that will facilitate private investment in its infrastructure, the Nigerian government said in a statement issued Tuesday.
Newly installed Nigerian President Goodluck Jonathan has forwarded a bill to Nigeria’s National Assembly to create a “National Sovereign Wealth Fund”. The wealth fund “would act as a vehicle for attracting and channeling capital flows to critical infrastructure”, according to the statement.
The wealth fund would be funded with $1 billion in seed capital already set aside by federal and state governments, Nigeria said.
Money for the fund will come from Nigeria’s crude oil-revenues, Nigerian Finance Minister Olusegun Aganga said during a recent interview with Bloomberg Television. After taking a hit due to violence in the oil-rich Niger Delta region, the Organisation for Petroleum Exporting Countries-member country is again reaping profits from its oil and gas sector.
“There’s peace in that region,” Aganga said, and “our revenue from oil production, from oil only, is up by 60 percent”, Aganga told Bloomberg.
The proposal is one of several initiatives Jonathan has unveiled as part of his seven-point agenda to promote economic growth in the oil-rich but infrastructure-starved country. Nigeria aims to rank among the largest 20 economies in the world by the year 2020. Getting there will require about $200 billion of investment, according to the statement.
Other initiatives under way by Jonathan include opening up the country’s power sector to private investment. Jonathan recently unveiled a roadmap for increasing Nigeria’s power capacity by having the private sector finance more of the country’s power generation needs.
“We intend to privatize generation of power and privatize distribution of power,” Aganga told Bloomberg.