Nigerian local government chairmen raises alarm over exclusion from operation of sovereign wealth fund

The Association of Local Government of Nigeria (ALGON) has accused the National Sovereign Investment Authority (NSIA) of sidelining the association from the operation of the Nigeria Sovereign Wealth despite owning 17.8 per cent

Penpushing reports that President of the body Alabi Kolade made the complaint on Tuesday before an ad hoc committee of the House of Representatives investigating the National Sovereign Investment Authority (NSIA)

The Association of Local Government of Nigeria (ALGON) pointed out that local governments have not been carried along in its operation, stressing that the management of the National Sovereign Investment Authority (NSIA) had refused to consult the association on the operation of the funds.

Penpushing further reports that Kolade, stated that most of the investments of the funds in healthcare and education are at the tertiary level, pointing out that the activities of the National Sovereign Investment Authority (NSIA) are done in secrecy to the exclusion of the local governments

“Your activities are done in secrecy to the exclusion of the local governments. And I have facts before me. They should let us have insight and speak more into what they have submitted’, the association boss said.

Penpushing also reports that he lamented that most of the projects by the National Sovereign Investment Authority (NSIA) are benefiting states and the federal government while local governments are left out.

‘None of this project, to the best of our knowledge, can be seen or felt at the local government. You have spoken well about partnership with the communities but my question is how can you partner with the communities without local governments? he stated

‘They have spoken well about health delivery, but the one that is within the remit of the local government is primary healthcare. Your investment is to state government hospitals and not local government hospitals’, Kolade said.

“You have spoken well about schools but our own jurisdiction is primary schools, but we have not seen a single school. You have talked about 13500 affordable houses but to who? Who would be the beneficiary,” he added

Penpushing further reports that Kolade pleaded that the local government should be involved since they are a major part of the ownership of the National Sovereign Investment Authority (NSIA)

The representative of the Nigeria Governors’ Forum (NGF), Shittu Lateef, however, challenged the position of Association of Local Government of Nigeria (ALGON), stating that National Sovereign Investment Authority (NSIA) had already briefed the Governors and they have no problem with the association.

Penpushing also reports that Lateef, representing the Director General of the Nigerian Governors Forum (NGF), Asishana Okauru, explained that the local governments remain an appendage of the states, hence, the state governments were briefed on behalf of the local governments.

The Director General while speaking on the location of the projects, said the projects are located in local governments, therefore, the Association of Local Government of Nigeria (ALGON) cannot make the argument of beneficiaries.”

‘Nigeria runs a federal system and we have two federating units in this country, the federal and the states which the constitution has made very clear. The local government is not a federating unit as of today, it could be tomorrow if the constitution is amended. But as of today, the local government is an appendage of the states’, he declared.

‘As far as the NGF is concerned—let me start with ownership and I think he alluded to that earlier. The states and the local governments own 54 per cent. If you look at the structure, you will see that the states and the local governments are the real owners of the NSIA because we are the majority shareholders.

“Sometimes last year, we requested the NSIA to make a presentation to the states and the minister of finance at that time led the delegation and they made a presentation. I can tell you that we are satisfied with the presentation and we have no problem whatsoever with the NSIA,” he said.

Penpushing reports that the Managing Director/Chief Executive Officer of National Sovereign Investment Authority (NSIA), Aminu Sodiq-Umar, in his presentation told the committee that the organisation has increased its assets by over $600 million in the past 10 years of operation, adding that the assets increased from $1.760 billion to over $2.27 billion.

The Managing Director explained that the authority has been able to manage the margin by ensuring that it makes more profits than losses, stating that if you are managing a portfolio of growth investment, one must have what will lose and those will gain

“If you are managing a portfolio of growth investment, of course, you will have those you will lose and those you will gain. I think the point is for you to manage your volatility, and your correlation and you are substantially managing your gain to your loss. That is the nature of the investment business.”

Penpushing further reports that he added that National Sovereign Investment Authority (NSIA) law mandates that the fund cannot afford to be short-term but to think long-term when making investments.

The Chairman of the Committee, Ademorin Kuye (representing All Progressives Congress, Lagos State), raised questions on the number of investments that the National Sovereign Investment Authority (NSIA) made but returned losses.

Penpushing also reports that Kuye in the course of the session moved a motion that the committee should go into an executive session with the National Sovereign Investment Authority (NSIA) to discuss the authority’s strategies.

The National Sovereign Investment Authority (NSIA) was created by an Act of the National Assembly signed into law by President Goodluck Jonathan in 2011. The federal government has 45.8 per cent of the share of NSIA while states own 38.2 per cent, local governments own 17.8% and FCT has 0.16 per cent.

Penpushing further reports that, while in the last 10 years, the federation has invested over $1.75 billion for the National Sovereign Investment Authority (NSIA) to manage as an investment manager.

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