(Bloomberg) – Nigeria plans to increase wealth under the control of a state fund manager by more than five times to 100 trillion naira ($217 billion) within a decade and wants it to generate income to fund the treasury support. according to the government.
Ministry of Finance Inc. was founded in 1959 and was intended to serve as a special purpose vehicle to invest in commercial ventures in various industries, but has been largely inactive.
The law establishing MOFI empowers it to “conclude commercial transactions of any kind on behalf of the federal government,” President Muhammadu Buhari said Wednesday as he installed a new board to oversee the agency’s activities. The fund manager currently oversees assets worth 18 trillion naira, he said, without giving details.
MOFI will act as the clearinghouse for managing the government’s investments and assets, ensuring they deliver “superior risk-adjusted returns” to the government, the president added. He directed the MOFI to set up a consolidated register of government assets that will help turn them “into cash-generating units to support government revenue.” The West African nation has consistently missed revenue targets set in its annual spending plans since 2015.
With debt service payments eating up about 80% of government revenue over the past year, Africa’s largest economy is looking for alternative ways to boost its income. Nigeria is also struggling with slow growth and a dollar squeeze after a collapse in oil production squeezed its foreign exchange reserves.
Buhari will head MOFI’s new governing council, while former finance minister Shamsudeen Usman will head the new board.
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