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Sovereign Wealth Fund: Senate Summons Emefiele Over Differential in Exchange Rates For Projects

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The Senate Finance Committee on Sunday summoned the Governor of Central Bank of Nigeria, (CBN) Godwin Emefiele to explain the rationale behind the exchange rates it used for three key projects under the Presidential Infrastructure Development Fund(PIDF) being funded to the tune of billions of naira by the Nigeria Sovereign Investment Authority(NSIA) across the country.

The PIDF was earmarked from dollar denominated Sovereign Wealth Fund to partly fund the Lagos –Ibadan Expressway, Second Niger Bridge, Abuja –Kano Expressway, East-West Road and Mambilla Hydro Project with the first three projects already funded to the tune of N163.8 billion.

Senator Solomon Adeola (APC, Lagos West) the chairman of Senate Committee on Finance over the weekend invited the CBN during an interactive session with the Managing Director of NSIA, Mr. Uche Orji and his management team where Orji disclosed to the committee that the contracts for the projects were denominated in naira and CBN exchange rate for the disbursed fund was N325 to a dollar instead of the official rate of N305.

“This committee will like to see the contract documents for these projects and why the exchange rate for the dollar to naira was at N325 to a dollar instead of the official rate of N305 in a government to government transaction for these key infrastructure projects. We are not indicting NSIA or conducting an investigation or probe of CBN but we like to know the reason why this different rate was used.” Senator Adeola stated while inviting CBN to appear together with NSIA on Monday.

The senator commended the NSIA for what it has done so far in terms funding healthcare, education, infrastructure and investment in fertilizer production but urged for caution and more investment in diverse areas to grow the $1.5 billion Sovereign Wealth for its contributors namely the Federal Government, State Governments, Local Governments and FCT to reap the benefits of its establishment.

Senator Ayo Akinyelure( PDP, Ondo Central) while supporting the need for clarifications from CBN on the exchange rates of dollar to naira in these transactions stated that NSIA may have been shortchanged in these transactions adding that the rates may explain the seeming slow progress, delay and non completion of these key projects as some aspects will be based on import of materials which are denominated in dollars purchased at higher BDC rates.

Earlier Orji stated that NSIA, since operations in third quarter of 2013 with seed money of $1billion, have invested in critical sectors like healthcare, presidential fertilizer initiative, education, real estate, international financial instruments and in 2018 the Federal Government injected $650 million for the PIDF from which N163.8billion has so far been disbursed for the three projects from approved N672.4billion earmarked.

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