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Case Study—Nigeria Sovereign Investment Authority–Nigeria Infrastructure Fund*
BACKGROUND AND MISSION The Nigeria Infrastructure Fund (NIF) is a fund established by the Nigeria Sovereign Investment Authority (NSIA), an investment entity set up at the federal level, to boost the development of the country’s infrastructure, with the double bottom line goal of realizing a commercial return and investing in infrastructure that might otherwise not be financed and developed. NIF has a longterm investment horizon, exceeding 20 years, and acts exclusively as a provider of new funding, investing across the capital structure, from senior secured debt to equity. The fund size was US$650 million as of June 2018. NSIA’s mission is to play a leading role in driving sustained economic development for the benefit of all Nigerians by enhancing the development of Nigeria’s infrastructure, building a savings base for future generations, and providing stabilization support in times of economic stress. This mandate is carried out via three separate funds: NIF, the Future Generations Fund, and the Stabilization Fund. This case study focuses on NIF. NSIA is funded with hydrocarbon revenues in excess of Nigeria’s budgetary requirements, allocated to central and local governments and then partially channeled to NSIA. Nigeria’s federal constitution allocates oil revenues to central and subnational governments in predetermined ratios. In turn, these recipients allocate funds to NSIA according to the same ratios, which are reflected in their ownership stakes in NSIA. NSIA’s ownership structure is as follows: federal government, 45.8 percent; state governments, 36.2 percent; local governments, 17.8 percent; and federal capital territory, 0.2 percent. NSIA commenced operations in 2012 and began investment activities in the third quarter of 2013, with seed capital of US$1 billion. An additional US$250 million was committed by the National Executive Council in November 2015 and received in 2016. Another capital injection of US$250 million was approved in 2016 and received in 2017. Capital injections reflect oil prices: in years when the
* Research for this case study was completed between 2018 and 2019. The text reflects the circumstances at that time. 255
