By Umar Muhammad Puma & Patrick Andrew
Concerned by the drop in the price of crude oil globally, the House of Representatives said it will collaborate with the Nigeria Sovereign Investment Authority (NSIA) to ensure stability
of the economy.
Chairman of the committee on Finance, Rep Abdulmumini Jibrin (APC Kano), stated this when the committee visit NSIA in an oversight function, he said the global threat as a result of the emerging reality of the new oil price regime, the House is considering returning the Medium Term Expenditure Framework (MTEF) to the executive arm of government for review.
“The House is returning the MTEF to the executive arm of government so that the federal government will re-present it properly with attention to be paid to more savings so that agencies like the NSIA can be better supported,” the chairman said.
He said, “everything was good when crude was selling at $110, not now when it is free falling. We want to see how the situation can be mitigated.
“We are aware that you are faced with two critical challenges of the legal instrument setting you up and your need for more funding,” he noted, pledging that his committee will mobilize the leadership an members of the lower chamber to smoothen out the fine points of the legal issue.”
According to him, more funds needs to be injected into the authority so that there will be no panic when the price of crude oil again slide down in the international market.
The Managing Director of the NSIA, Mr. Uche Orji, appealed for more funds for the authority, saying there nothing the authority will do about oil price fluctuations. Adding that the survival of the authority depends largely on how much resources have.
“The effect of oil price risk is not for the NSIA alone but for the whole country. Oil price will be volatile at, say $100 per barrel, but it will also get to a point where new contracts will get out. This reduction will discourage others and at a point it will go away,” He explained.
The NSIA began operations two years ago with $1 billion which it invested as follows: $200m in its Stabilisation Fund, representing 20 per cent of the total. The Futures Generation Fund and the Nigeria Infrastructure Fund received forty per cent each.
Out of the 18 areas it listed for investment, it has so far sunk funds into six: power, gas processing, motorways, healthcare, agriculture and real estate.