The Federal Government has revealed that the planned withdrawal of $150m from the stabilisation fund of the Sovereign Wealth Fund will reduce the fund to $201m thereafter.
This is be the first time the government would be making any withdrawals from the fund since inception.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, while speaking to journalists on Monday in Abuja, had disclosed the need to cushion the negative impact of the coronavirus crisis due to sharp decline in oil prices.
Allocations to the various tiers of government have been on a decline since January 2020, and the minister said the withdrawal was necessary to help various governments meet up obligations.
The Nigeria Sovereign Investment Authority, on Thursday, expressed support for the government’s decision, stating that it was in line with the objectives of establishing the fund, while also corroborating that “the planned withdrawal is to assist the government in addressing the emerging fiscal risks due to coronavirus pandemic and the recent decline in government revenue.”
It also stated that Sections 47 and 48 of the NSIA Establishment Act 2011 supported the withdrawal and also empowers the minister of finance to call on the sovereign fund managed by it.
“The withdrawal reduces the value of funds under management in the SF to $201m from $351m as at December 31, 2019. The $351m comprised core contributions of $300m and $51m of returns earned. The Stabilisation Fund allocation is 20 per cent of NSIA overall funds under management,” it added.
The Managing Director/Chief Executive Officer of the NSIA, Uche Orji, said of the planned withdrawal, “The NSIA (Establishment etc.) Act 2011 is clear on our role. The NSIA is, in part, to serve as a stabilisation mechanism for the country through the SF. Beyond the withdrawal, we are also exploring other avenues to support the country through various social investment initiatives.”
NSIA restated its commitment to serve as an enabler to the nation’s economic sustenance and growth.