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Nigeria’s Sovereign Wealth Fund safe, profitable says Uche Orji   

Nigeria’s Sovereign Wealth Fund safe, profitable says Uche Orji   
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It’s been seven whole years since Nigeria set up its $1.5bn Sovereign Wealth Fund in search of better ways to manage its oil earnings. Uche Orji, CEO of Nigeria’s Investment Sovereign Authority (NSIA) – managers the fund – says those have been straight years of hard work and profitability, as he tells Onyinye Nwachukwu, BusinessDay’s Abuja Bureau Chief of the journey so far and prospects, in this exclusive and insightful interview.

How far has NSIA come in 7 years?

NSIA has gradually evolved and I would say in seven years, I am broadly satisfied with the execution of its strategy; of course there are many things I think we can do better and could be done better for and by the NSIA. But I think in all, we had steady progress over the last seven years. All the three funds – Stabilization, Future Generations and Infrastructure funds have had seven years of straight profit. The three funds have been largely invested or committed to their various mandates – the infrastructure fund in particular which is what people want to see. We have built trust with the stakeholders, particularly at the federal level which is supported by the fact that fresh funds for other projects owned by the government are now being managed by us for example the Presidential Infrastructure Development Facility (PIDF) Fund. We have transitioned from one board to another which is always a very good sign that our organization is sizzling.

We are grateful for the fact that successive administrations have kept the NSIA largely intact at least at the management level. So I think all of these things make me feel like the NSIA has continued to grow and mature, internationally it continues to be a respected member of the international community of asset managers particularly the Forum of Sovereign Wealth Funds. It is rated for transparency and accountability – one of the few that actually provide quarterly audited accounts to the public, and also seeing us moving to striking that balance between social impact and commercial investments on infrastructure side. So all in all, I think the last seven years for me has been quite humbling also because there are unforeseen challenges that one has had to deal with. Every day brings its new challenge but this has been, first of all an honour and also a humbling experience. I also see how things sometimes don’t work so well in Nigeria because in our infrastructure investment – be it in agriculture, power, gas, roads, fertilizer I have come face to face with challenges. I’ve seen some of the real challenges that investors and business men in Nigeria are faced with. In all of those though, I see investment opportunities will you will not know exist until you have to deal with them.

In the 7th year of NSIA, I also now have to think that another area we have been very proud is in our role in filling out institutional voids by creating many other entities. Most Nigerians are not aware that the NSIA seeded and helped incubate the Nigerian Mortgage Refinancing Company, Fund for Agriculture Finance In Nigeria, Infra Credit which is 100 percent owned by the NSIA and is NSIA brain child, that business now is doing extremely well, it’s based in Lagos, we are attracting new investors and we are underwriting many infrastructure bonds that are issued. The NSIA was an anchor investor and actually helped incubate the Development Bank of Nigeria, Family Homes Fund and also more recently the Nigeria Infrastructure Development Fund, NIDF which is run by Chapel Hill Denham. So these entities are filling out institutional voids as they call it, and will enable investment infrastructure ecosystem to thrive. The NSIA has either sponsored, anchored, incubated, or invested in all these entities. And now that we have started to make our foray in health care, so far so good, we are feeling the impact of what NSIA can do in that sector. We’ve deliberately slowed down a little bit programs in Kano and Umuahia cancer centres but they will be up and running before the end of this year. LUTH is running very well after the initial period of hiccup, now it’s gradually ramping. And the more I see those, the more I see more to do in healthcare. In Agriculture, we’ve created our first co-investment fund with UFF and Old Mutual Fund and they’ve made their first investment, they acquired a farm in Nasarawa state and they are turning it around. They made some initial investment of over $30million to actually revive that farm, grow maize and soy and do feed mill and there are many more projects in the pipeline.

The Presidential Infrastructure Development Fund which is run by the NSIA has taken over Lagos-Ibadan Expressway, Second Niger Bridge, Abuja Kano Highway and we are in the active phase of developing Mambilla power plant as well as working with Ministry of Niger Delta Affairs regarding the East West Road. It’s a long list of things that I can talk to, but the last seven years has been interesting, it’s been seven years of growth, consolidation, tackling problems in the country and in our key areas of focus, seasoning the organization, preparing it to withstand what has been a volatile investment environment internationally. So both domestically and internationally we are working assiduously to execute our mandate.

How are the Future Generation and Stabilization funds doing at the moment?

The stabilization fund has done very well, it has exceeded its benchmark performance. What we have invested altogether in that fund is $300m, as you know the returns vacillate depending on the market environment but initial investment was $200m and subsequently an additional $100m. The asset is doing well, don’t forget the Stabilization Fund was designed to preserve its value in dollars, so the returns benchmark is lower than what we expect for Future Generations Fund which is more risky asset and the infrastructure fund which is even more risky as well. The stabilization fund is such that we can liquidate at short notice and provide money to the government in times of economic stress, which is the philosophy behind it. The investment here is short term, liquid instruments, meaning things that we can call up fairly quickly and it is everything from the US treasuries, corporate fixed income, investment grade fixed income, 25 percent of it is in cash. So that has had a stable steady performance over the last seven years, it is not designed to be the best in terms of earnings for us. Future generations fund is designed to be the most earning asset so we take a bit more risk, for example we will not invest in private equity with stabilization fund because it will take some time before you get your money back, we will rather invest in things we can sell immediately. The idea is that we are able to liquidate the asset and put it back in cash in seven days.

How do developments in the global market affect the stabilization fund?

Stabilization fund has a lot more fixed income investment, and you have a world today where in most developed markets, interest rate is negative, in Europe – Germany, Switzerland – interest rates are negative. So it’s a little bit tricky to make money these days in the global fixed income market, pretty difficult. The US is one of the lowest yielding environments we have seen as well, so the quantitative easing by global central banks has depressed earnings and interest income in those funds. But the idea is not for this fund to double but to be preserved. So you are right, part of the challenge in earning good returns in this fund is the challenge of the global environment where rates are really challenged. Whereas ten, fifteenth years ago, you were earning low, mid-single digits but these days, if you are making low single digits, that’s not a bad outcome. In fact I feel sorry for those who trade government bonds in the global market. If you are someone whose responsibility is to trade Swiss versus European bonds, every day you are buying things that are going to lose you money. But that’s the challenge with quantitative easing. We’ve gone through that now since 2008, the most injection of liquidity in the market place by all the major central banks – ECB, Japan, the US Federal Reserve just been pumping cash into the system. The ECB is a particular case in point and the fascinating thing is that the more you pump cash into the system, the more difficult it is for you to come at full growth, it’s almost as if it’s not enough. So today, the single biggest capital providers in Europe is the government and it is strange. What we have today is a very volatile market environment where interest rates have been depressed because of more and more capital being pumped into the market by the global central banks. The concern is that if you are investing in fixed income, yields are low because of excess liquidity. So if you look at the interest rate on US treasuries, it’s been as high as 3.5 percent in the last five years, now we are talking about 2 percent, 1.95 percent. So we have had a high volatile market, and probably the scariest thing is the direction of the yield now which just dropped.

 Is it a deep concern for us?

It’s a deep concern, because you do better in a high yield environment, because these are the safest instruments, the treasury bills, treasury bonds, it’s investment grade bonds, and if you are not able to get the high yields that you use to get before, then your returns will suffer. I think it’s important that people realize that this is the world we are in now and this is the world we will be playing in for some time. So the era where you invest in those things and get reasonably high yields are gone. But the question is why do we still have to invest in those things? The truth is because our intervention currency is the US dollar, so we have to keep these investments in US dollar and in markets that are safe to make sure we avoid a situation where you look for the money, you can’t get it as quickly. It’s a world where you are looking for safety and also yield. However, it’s been seven years of straight profit for this fund, so I’m not trying to create any reason for worries, I’m just saying that with the market environment right now, yields are generally low, markets are volatile because of everything from trade war to nationalism to all kinds of things. But I’m happy with where we are, we have consistently been profitable with these funds, it’s run conservatively and it’s not designed to blow the lights out but at the same time, it’s not designed for the money to disappear, we minimize the risks in this fund, because this is our stabilization fund and it has to be available in times of economic stress.

How about the Future Generations Fund?

That is a little bit different, whereas 75 percent of the stabilization fund is in Treasury bonds, corporate fixed income, mostly in dollars and international, the same thing with future generations fund, but here, 20 percent is in equities and 25 percent is in private equity. The private equity funds, you commit and invest in them, they start yielding returns, and the idea is between 5-7 years, they return all your money with sometimes multiples of all the money you gave them. So for the early investments we made say in 2014/2015 in private equity, we are looking that any time from next year some of those funds will start returning. We also have absolute returns on what we call hedge funds, which have so far done pretty well, one or two of them have done around 12-13 percent. The public equity market has done well but we are not heavy in any particular market, two tiers of the fund are in emerging market and one third in the developed market, and is split between US, Europe and Japan. The US has done superbly well, we didn’t put as much in the US, and that is because our private equity exposure is a lot in the US, Japan has been okay and Europe, so so. Equity market this year has been better than last year which was difficult, as most of the markets ended negative, remember, last year was the beginning of the real trade war issues. This year has been better, even though it’s been volatile. It’s all about the trade war between China and USA, that’s what’s driving most of these markets. In the last few months, say July was a terrible month, but if you look at September, October, it’s been better, especially October when they are now making reconciliation tones, so emerging markets are rallying and we are looking better.

For Private equity, you invest in a fund, the fund then invests in private opportunities and many of them would only make returns as time goes on. Generally, if the markets are good, the value of investments made by private equity generally tend to be better, not always though, because they mirror the market. I think so far so good, this year with the Future Generations Fund, it’s been better unlike last year which was very difficult because most markets were down.

We also have what we call diversifiers, where we invest in funds and they invest in health care, aircraft leasing, commodities and all that. This is designed to be a diversified pool of assets, so that no one asset takes you down, we have had seven straight years of solid performance with the Future Generations Fund. We are not designing this fund for best returns because that also means we are going to take a lot of risks, meaning in a bad year it could just be destroyed, we are not yet at the point where we can take those kinds of crazy risks. We are designing it to have stable, steady returns from performance standpoint. Risk management for us is a very core principle that we adhere to ensure we don’t make any mistakes. Any major misstep will be a problem, so we are trying to be diversified, manage our risks appropriately, going to these markets with a little bit of care just to make sure that returns are stable and steady. But it has been okay, the third quarter audit just started, the first two quarters were okay. I think in terms of earnings so far, it’s about N25bn in the first six months of the year, but again markets are volatile.

I think the half year audit will be completed shortly, and it will be published, but like I said, from what I have seen, it was a good first half of the year but that doesn’t mean the second half will be okay, it doesn’t always work like that. Like I said July was a bad month, we made money, we were profitable but most markets were down in July. The one message that bothers me as we look into the second half of the year is that our infrastructure fund has made many commitments, and if you don’t have replenishment of capital, earnings will go down because it will take a long time for the infrastructure projects to start making returns. We are responsible and we will run a business that is consistently profitable, however, without replenishment of capital, it will mean we will slow down investments in infrastructure to ensure that we run a stable, profitable business. It also means we will go through a phase where we don’t have enough liquid assets to invest in markets to earn a return and we may see a decline, so if by some miracle the budget is favorable and we are able to get fresh funds, that will be fine because we really do need fresh funds.

Are you hopeful of fresh funds?

I’m realistic about things, but you know the oil sector is not what it used to be. We have got some funds into PIDF, that is tied to the roads project and we are looking to NSIA’s own capital, we’ll go into those projects as well and we are also looking to raise third party capital into those road projects. I’m hopeful that at least we can conclude the Lagos/Ibadan, Second Niger bridge, Abuja/Kano, these are going to be toll roads. But on whether we are going to get a general pool of funds that will come into the broad NSIA, I’m hopeful, but realistically, I think the environment is challenging. We will continue to work very closely with the minister of finance to look for opportunities to continue to shore up the capital of the NSIA. If there is no fresh capital coming into the NSIA, it will be difficult for the business to really fulfill its mandate.

However, in 2020, you will see us create more of these co-investment funds, because part of what we are trying to do is to attract other people to co-invest with us. Look at Infra Credit, it has been able to attract $65 million of fresh capital from other institutions, this is a business that NSIA owns 100 percent. We are looking to use that kind of fund, in agriculture we are going to raise significant capital to bolster our agriculture co-investment fund with UFF to do many more things in the pipeline. So I’m hoping that, that becomes a strategy where we create co-investment funds with other entities, corporates, asset managers who want to invest in same area with us, that is a key strategy that we run. It’s a very challenging environment today that government has to look at all its priorities, it will be good if fresh funds come, but we are also very realistic about the environment and preparing ourselves to look for other ways to bolster our ability to invest through all these co-investment platforms.

Are there other plans to expand NSIA capital without necessarily looking to government considering low revenues amid in face of many priorities?

There are discussions we have muted, though not in a much more formal setting, like at the National Economic Council, where we said one other way to grow the NSIA – unfortunately that is going put us at the cross heads of the privatization program –will be to grow the organization through asset transfer. There are assets that are owned by the federation that government is looking to improve performance, the federation can choose to contribute those assets to the NSIA. The NSIA then owns the asset, takes the value as agreed between the federal government and the NSIA, and then it can then raise capital and bring managers to make the assets work, that formula has been used by Singapore. There is always an alternative, and that alternative is to look at assets, as a way to grow the fund. However, considering our federal structure, this is not an easy discussion to have but it will be worthwhile. The organization might choose to fix the assets, sell it in the public market and then raise capital or find a trade buyer to buy the asset and raise capital, all of those things are options that the entity can get back to. Getting fresh capital, if cash is impossible, assets is a very possible discussion to have. I can’t mention any assets but it’s everything from real estate to industrial assets that as a federation, trying to fix it from your budget is a problem. A transfer of that asset to the NSIA is a viable option because NSIA, by its Act is allowed to operate it more freely and independently, can then decide to bring co-investors and external managers to fix and then sell it and realize capital. The country is littered with a countless of those assets, you can choose to sell them through privatization which is fine but you can choose to fix it up first before you sell them. There are many things that can be done. So my sense is, that is a clear and viable option for putting fresh capital into the NSIA is asset transfer, because it has been done in other places. Singapore has done it successfully, China to some extent has done it successfully, the Chinese government decided to transfer all their stakes in banks, industrial bank, agriculture bank into one of their sovereign wealth funds, and the fund now takes a sit on the board, changed management, forced the funds to improve and they were able to grow the asset and whatever dividend or equity sale that they make, they use that to capitalize the fund. So there are many things that can be done here and we need to find our own part but the NSIA will not survive for too long if there is no consistent injection of capital. Many people that work here are ex-bankers, so if we have the liberty to go and raise deposits like other places, we will do that but that’s not what we do, we are not allowed to do that, we have only one client which is the federation of Nigeria.

How do you think that’s going to happen, considering controversies that can it throw up?

It’s not going to be easy, nothing worthwhile is easy. It’s a difficult conversation but we’ve not started yet. It’s still an idea that says look other people have done it before; let’s look at how it can be done here. It’s a complex idea in our environment, in other places, seems not so complex, but it’s worth working on, and I think we are working on it.

You did mention recalibrating how NSIA assets will be allocated, how far have you gone with that?

What we said was that going forward, any fresh capital given to us by the government will now have 50 percent in Nigeria and 50 percent international, or more like 20 percent in stabilization fund, 30 percent in future generations fund and 50 percent in infrastructure fund. It used to be 20, 40, 40, now it’s 20, 30, 50. But since we made that statement, we have not received any fresh capital apart from the PIDF. So any fresh capital that comes now gets allocated because each of these funds is ring fenced meaning we don’t pull money from one fund to the other, once it’s there, it’s locked up, so that we can have clean accounting of each of them. The NSIA Act specifically says it must be ring fenced. The PIDF is a separate PPP arrangement between ourselves and the federal government to deliver these three key road projects. It will receive some money from the federal government, some money from NSIA, and NSIA will raise capital from other parties to complete the projects.

Uche Orji, CEO of Nigeria’s Investment Sovereign Authority (NSIA)

What’s NSIA approach to hedging itself against shocks and volatility?

First of all, very rare do you have what we had in 2008 or 2001 when it was a synchronized melt down in the markets with every asset class rate on the decline. It was a global financial crisis. That happens once in a while and the board’s strategy is to ensure we are fully diversified as much as possible, and the major part of what we need to do is to ensure we are investing in the right assets. We need the right assets to get the right securities, the right instruments, so that has helped us. We have invested across 17 countries in our equity exposures. We cannot afford not to be diversified, it’s the number one hedge in a volatile market. The other strategy for us is to be as close to assets that we know as possible so we are not taking crazy, random risks of things we cannot explain. Where we see the most risks in our portfolio, to be honest with you are even some of our domestic investments, which at the same time make an impact and provide us growth opportunities in the future. And I say that because Nigeria is frontier market and frontier and emerging markets have been under pressure. Look at the Nigeria stock market, we have not invested in our stock exchange, but if we were, it would have been difficult, especially this year. Look at Nigeria in the context of the global market, so when I say a lot of risks are closer home, I’m actually referring to, for instance, if you look at the performance of the Nigeria stock exchange and that’s because in the wider context of what is affecting frontier and emerging markets, that asset class has particularly underperformed in the last 12 months because of all these trade wars issues that are happening globally.

So the way we hedge ourselves is through being diversified, picking the right securities and making sure that on a regular basis we are monitoring our portfolio and avoiding any major pitfall. The fact that we are not overly exposed to any one is a major protection for us. Imagine if we had put all our eggs in the US equity last year, it would have been a disaster but this year has been spectacular, so it’s not fair on the Nigerian people that I put you through that level of volatility. Bear with us, we are going to be diversified which means we might not be the best in terms of returns, but we are never going to be in a position where we lose money, it’s going to be a solid steady performance. I feel confident, unless we have a situation like in 2008 where there was no place to hide, then that is difficult but also we need to understand that this only happens once in a while and when it does, the world recovers a little bit quickly as well. Outside of those major crashes, for us, is by being well diversified in our portfolio and monitoring it daily to making sure we are picking the right managers and right advise. We changed our advisers last year from Cambridge associates to UBS, part of it was just because we have worked with Cambridge for five years, we needed to work with somebody else to see whether we can get a degree of edge in our returns. This is one of the dynamic decisions we make to ensure we are doing the right things and we do have a lot of advisers working with us.

How are you able to gauge what to invest in and when?

It starts by hiring the right people, and we have them. The other thing is that we have good advisers working for us and we are working very hard, our people are always on the road going to visit our investments, on the phone, video conferencing daily, checking on every portfolio. I get the report on every single position at least every week, that’s my main job. That way, we are able to pick out issues early enough and solve them. We have three ways of making an investment, first of all is the process, the people and the performance. It’s the three Ps that we use in managing. Performance is the first gauge, if performance is not so good, we ask ourselves have they changed their investment process and have they changed the people. Sometimes if somebody you know has been doing well in the past and something is wrong, you sit down and understand his logic, if you believe it, you stay with him, but if the process is changed and they are now doing things they don’t understand or there’s a new person who doesn’t know what he is doing, we sell that investment on the spot. So these are guiding principles surrounding how we select investments that we make, and this is on future generations and stabilization fund. For infrastructure fund, we define clearly where we want to invest, whether it is gas industrialization, agriculture, power, roads, healthcare, those are the areas we are investing at the moment. Anything outside of that, we don’t have capital, we don’t have the energy and we don’t have the expertise. Gas industrialization for us is very big area, the pipeline is growing and we are quite excited about the possibilities in that sector.

What’s NSIA role in the agriculture sector?

First of all, you have seen our role in fertilizer – the investments, it’s been very successful three years. NSIA and OCP of Morocco have formed a joint venture to produce one of the most important elements of fertilizer which is ammonia. OCP is the biggest buyers of ammonia in the world, so we are now creating a plant, we are going site it in River state – Bonny -to produce ammonia for off take for OCP, and we expect that the project will pay back in six years. It’s is a big project, it’s over $1billion investment, 50-50 jointly owned by NSIA.

In the last three years of Presidential Fertilizer Initiative, PFI, 2017, 2018, 2019, we have blended almost a million metric tons which is 20 million bags of fertilizer, blended and sold, it’s never been done in the country. When we started there were hardly any blending plants operating in Nigeria, there were four that were okay, but were operating in less than 30 percent utilization. We are now have 24 blending plants across the country who have joined the program and now operating in 60, 70, 80 percent utilization. It’s creating tens of thousands of jobs. Just to give you an idea, every year, the truck movement alone for fertilizer is more than 70, 000 trucks, and that is just to get raw material up and down the country, not to talk about those that are buying finished fertilizer and distributing to different parts of the country. We have saved the country a lot of foreign exchange because before now the country used to buy fully blended fertilizer and import it, meanwhile we have limestone, and we have urea here. The only thing we don’t have is phosphate which we buy from morocco as part of the deal struck by the president and potash which we buy from international market. By the way there is potash in Yobe, but has not been developed although I saw in papers recently the presidential solid mineral development fund just signed a deal with OCP to develop phosphate in kaduna. On ammonia, we have identified the site, finished the early stage of feasibility, moving into concept stage, we are now talking about design and construction could start by late next year, and for finishing in 2023. That would be fantastic for the country, don’t forget that this gas that we are selling as LNG or just flaring could make us more money if we add value. PFI has been successful, fertilizer prices came down when PFI started, fertilizer prices was between N11,000 to N13,000 a bag, in the first year it was down to N5,000, and we are selling at N5,000, there has been challenges in some places within Kaduna, Kano, Abuja where we have blending plants, you can get for N5,000. But I want to admit that because of high cost of transportation from far places like Borno, Yobe, Zamfara, most people have not been able to buy it for N5,000 but a little bit ore, it’s still better than where it was before because of what just a three-man team in NSIA has done working with all the blending plants, logistics companies, importing and ship-loading, transporting to the blending plants, following through with them, auditing their books. It’s been fun.

Also in agriculture, we created a $200 million fund, with UFF which is a company backed by Old Mutual South Africa, and they have acquired a farm in Nasarawa state called Panda farm. We are now at the early phases of investing in the farm, it’s going to be a big investment and from what I have seen, it’s going to be somewhere between $25 to $30 million to make the farm for soy and maize, irrigation and all kinds of things that we can grow all year round. We will expand it to 3,500 hectares and there is a feed mill there that is being refurbished. There is already a whole lot of farm designs and architecture going on and the partners are based in Holland. We are almost about to conclude our discussion on 2,000 hectares in Kaduna- Gurara, for avocado for export. We are almost about to conclude our signature with Edo state for cassava, and then we are also looking at indoor farming, I know this sounds crazy but this is probably one of the amazing things I have seen in a long time. There is a US partner we are working with on that to produce high quality vegetables for both local consumption and for export, there are a lot of things in the pipeline.

What are your projections with these farms?

The expectation is that, for example the farms will pay back in 3-5 years, if we invested about $25 million, we would have generated that in cash in less than say 3-5 years, so we are very hopeful. We sponsored Fund for agriculture Finance in Nigeria, fafin, which is also currently investing in so many things. We also invested $5 million in banangona which is a scheme that aggregates small holder Farmers, it has about 40,000 farmers now, and it’s in Kano. But fafin has a lot of assets that we have invested in, and we have about 6 investments. Obviously we have been in discussions with commodity exchange for a long time, we have not reached a landing, though it’s been ongoing for a long time and we are working well with BPE on that.

How about the health sector?

For the health sector, we are happy it’s still early days. Our Luth Cancer center has stabilized, we are not yet fully wrapped, every time I go there, I still so many patients and it’s sad because it just tells you how many people are still sick in this country. It’s a world class cancer center, our people are still being trained, in the next couple of weeks we will have a new board in charge of that place and that will be announced once the NSIA board approves it. We’ve hired a few new oncologists, physicists, a team just joined from Egypt and we are going to have more people. We need many more people to make at least 2 shifts a day working 18 hours a day, then we will be in a position to actually not be overwhelmed, we get over 100 patients a day. Some of the equipment there are so new, our high energy equipment is second submission in Africa, so one of the challenge is actually getting people trained, it’s slow but we have to be careful when we dealing with people’s lives, it’s a long way to go, but it’s been active. Our diagnosis center in Kano should be up and running before the end of the year, like 95 percent completed, Umuahia is little bit farther behind, and I’m still hopeful we will finish before the end of this year or early next year. Unlike LUTH, we have hired 60 people already for both Kano and Umuahia, they have been fully trained and ready to start work. We have a pipeline of 13 projects we plan to do in healthcare next year, subject to capital availability. When it’s fully invested, LUTH will be over $10 million, Kano and Umuahia will be $5million each.

Is the NSIA is positioning its healthcare investments to tackle huge brain drain challenge in the country?

We are building a training center next to LUTH, and we are hoping that it becomes the finishing school for oncologists, therapists, physicists and those who actually work in cancer, so that people can stay back and practice after their studies. I think maybe it will finish by the end of this year. The other area we are looking at is pharmaceuticals, one of the things that has come out in our health care investments, especially our oncology center is that some of the medicines are not even available and they are expensive. We are in advanced discussions with the University College London, and I’m hoping that once we get the approval they will be helping us in consultation around how we make pharmaceutical products in Nigeria. So we are working hard to see how we can invest in pharmaceuticals for oncology medicine in the country. So let’s see how that goes, I think that will be very interesting.

There was a sad case recently that got my attention, about a woman that got her prescription but could not find the medicine in the country, the doctor started calling the manufacturer to see if they could get it but sadly she passed away. That’s another thing, in Nigeria, more than 80 percent of the patients are already terminal, so one of the big investments we need to make is in early detection of cancer. One of the investments that is worth making and I think state governments should consider is maybe mobile cancer diagnostic centers because early detection of cancer is something I think the country should focus on. One of my heart breaks in our cancer treatment center is how many people that turn up, I look at the data and many of them are already at the late stage. So early detection is important and pharmaceutical investment is important as a way to make sure we have a healthy society.

 Are you in talks with the state governors on this?

We have our annual meetings with the governors once a year, hopefully I will raise it with them, but the ministry of health is there and is aware of all these issues. There are cancer treatment centers in the teaching hospitals that need refurbishment and equipment and all that, we are working closely with ministry of health. But I’m just saying that primary health care is a state and the local government problem and should not just be about malaria, cholera and typhoid. Health care issue is a problem, but for cancer which we have dipped our hands into, we need more centers, early detection systems, pharmaceuticals, they are expensive to bring them into the country, so there’s need to invest in them locally.

Can you speak to NSIA’s involvement in the power sector? 

We have not really done much apart from the work we are doing on Mambilla right now and it’s ongoing, albeit, at an early stage. Mambilla as it is designed is over US$5 billion investment and a project of over 65 miles square, it’s a whole state. You are moving water to build a dam, to build four hydro dams, two power lines, and 700 kilometers of transmission cable. It’s a big project, you are going to build air strip, roads, before we get into it, and there is a lot of planning required. Mambilla has been in the works in this country for over 40 years. The president has put it under PIDF, and a lot of work is going on, but there’s a long way to go to actually get this done. It’s a big project and you don’t start it until you are sure of the money. The counterpart funding needed for this project alone is $850million, then the Chinese will bring their own over US$4 billion to finish the project and we’ve been in serious discussions with them. Hydro dams of that scale is not a joke, the cost of the project is over $5 billion. We also need to be careful and efficient and ensure this is really what we need, this is why we now bring in experts. After you build the dam and put power units, you now have to do 700 kilometers of transmission lines.

We are working on solar plant panel in Kano with the federal government, it’s a PPP, 10 megawatts of solar, we are hoping that once we finish that we can do many more, there are many other things in our pipeline now on power. Clean energy for me is very important, there is a project we have been working on with two other parties to take one of the gas flare sites and recover the gas for cooking and then power. There are so many gas flare sites in Nigeria, we can turn the gas around for cooking and some for power plants, that way we address climate change, pollution and all those stuff.

Can you speak to your investments under the PIDF?

A lot has been going on, the Second Niger Bridge is something that by the end of this year you all be very proud of the work done by this administration. The first tranche of the PIDF fund has been deployed, the next tranche strand is commencing next year. The PIDF funding structure is $650 million from the government, plus N90 billion, plus $300 million from NSIA plus third party capital we are going to raise which will depend on the project we are talking to. This is across all five projects but now the projects that are ongoing are Lagos/Ibadan, Abuja/Kano and Second Niger Bridge. Mambilla will start soon, we are still in early discussion on the East West Road and it is a bit more complicated because it has four contractors. There is a lot going on the Lagos/Shagamu side, you will see a lot more progress between now and Christmas

 

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