By Adedapo Adesanya
The balance in Nigeria’s stabilisation fund has now dropped to $201 million following the withdrawal of $150 million, the Nigeria Sovereign Investment Authority (NSIA) has disclosed.
Last week, President Muhammadu Buhari directed that the sum of $150 million be withdrawn from the NSIA stabilisation fund to augment disbursements by the Federation Accounts Allocation Committee (FAAC) to the three tiers of government for June 2020.
Business Post had earlier reported that FAAC disbursements dropped in previous months from N716 billion in January to N647 billion in February and the Minister of Finance, Mrs Zainab Ahmed, noted that it further dropped to N581 billion in March 2020.
According to the Minister, the withdrawal would be used to augment the June 2020 federation accounts and allocation committee (FAAC) planned disbursements to the three tiers of government.
This aligns with directives established in the act which states that – “Section 47(2) of the NSIA (Establishment etc.) Act 2011 provides that the authority shall have the right to utilize capital and assets in the Stabilisation Fund to supplement resources available to stabilize the national economy, subject to a formal request from the honourable minister of finance of Nigeria.”
The Fund is a special account held by the Central Bank of Nigeria (CBN) and managed by the NSIA on behalf of the Federation as a pool of funds the government can draw from to cushion serious economic challenges facing it, like recently, fall in oil prices and the COVID-19 pandemic.
The finance minister further said the money would henceforth augment FAAC allocations until the end of the current economic crisis caused by the deadly global coronavirus pandemic.
Speaking on the development, the NSIA Chief Executive Officer, Mr Uche Orji, in an interview with Premium Times said, “So, even after the $150 million is disbursed to government in June, about $201 million would still be left for us to continue to invest and generate more earnings. What we are giving to the government is actually $100 million of capital they gave us and another $50 million of the returns we earned.”
Speaking on the withdrawal, Mr Orji said, “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 Stabilisation Fund.
“Beyond the withdrawal, we are also exploring other avenues to support the country through various social investment initiatives.”
The NSIA is owned by the federal government (45.83 percent), state governments (36.25 percent), local governments (17.76 percent) and the Federal Capital Territory (0.16 percent).
