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What Is a SWF (sovereign Wealth Fund)?
A SWF is a state-owned investment fund that invests in real and financial assets. Most SWFs are funded by surpluses generated from commodity export revenues. Some others are funded by other assets transferred to the SWF by the government.
The Nigeria Sovereign Investment Authority is an investment institution of the Federation set up to manage funds in excess of budgeted hydrocarbon revenues.

The NSIA was established by an act of the National Assembly in May 2011. The Act was signed into law by His Excellency, President Goodluck Jonathan on May 28, 2011.

The Board of the NSIA was inaugurated on October 9th, 2012.

Shareholders consist of the Federal Government of Nigeria, the 36 States Governments and the FCT and all the Local Governments and Area Councils in the federation through a sharing arrangement that is consistent with national revenue sharing formula. The current ownership structure is Federal Government: 46.4%, State Governments: 34.9%, and Local Governments / Local Council Development Areas: 18.2% and FCT: 0.5% respectively.
NSIA’s vision is to establish NSIA as a leading sovereign wealth fund globally; playing a role in promoting investments for Nigeria’seconomic development.

NSIA’s mission is to play a leading role in driving sustained economic development for the benefit of all Nigerians through:

  • Building a savings base for the Nigerian people
  • Enhancing the development of Nigeria’s infrastructure
  • Providing stabilisation support in times of economic stress.
At the highest level, the NSIA is overseen by a Governing Council. The Governing Council’s 55 statutory members consists of the President of the Federal Republic (The Chairman), Nigeria’s 36 state governors, the Minister of Finance and 12 other members representing civil society, Nigerian youths, the academia and the private sector. At the next level is the Board of Directors and the related board committees; and at the third level is the Executive Management team.

The NSIA operates three ring fenced funds:

  • The Stabilisation Fund (SF)
  • The Future Generations Fund (FGF)
  • The Nigeria Infrastructure Fund (NIF)

The Nigeria Infrastructure Fund also has a sub set which is “Social Infrastructure” to which 10% of the NIF is dedicated

NSIA’s funding comes from funds in excess of budgeted hydrocarbon revenues. The National Assembly approved the initial amount of US$1billion as seed funding. Additional capital contribution of US$250million was approved by the National Executive Council in late 2015.

There are a number of ways the NSIA will help to promote economic stability:

  • The first is that the Stabilisation Fund is designed to provide macroeconomic stabilisation in times of economic distress – that is, the Ministry of Finance can make a case for withdrawing from the Fund for economic stabilisation.
  • The SWF is a tool of fiscal discipline as it forces and enforces an investment and savings culture in a clearly defined manner.
  • Investments in infrastructure will help enhance development, which in the long run aids in overall economic growth.
The NSIA Act requires a minimum allocation of 20% to each of the three funds, with the outstanding 40% allocated at the Board’s discretion. In order to balance the infrastructure needs of the current Generations with the savings needs of the future Generations of Nigerians, the Board at its discretion, decided on the following allocation formula: 20% to Stabilisation Fund, 40% to Future Generations Fund and 40% to Nigeria Infrastructure Fund.

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