Sovereign Wealth Fund: Senate invites CBN to explain differential exchange rates for projects
The Senate Committee on Finance has invited the Central Bank of Nigeria (CBN) to explain the rationale behind the exchange rates it used for three key projects under the Presidential Infrastructure Development Fund (PIDF) being funded by the Nigeria Sovereign Investment Authority (NSIA) across the country.
The PIDF is 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.
Chairman of the Senate Committee on Finance, Senator Solomon Adeola (APC/Lagos West) over the weekend invited the CBN during an interactive session with the Managing Director of NSIA, Mr. Uche Orji and his management team.
During the session, Orji had 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 would 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 of 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 Fund for its contributors to reap the benefits.
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Senator Ayo Akinyelure (PDP/ Ondo Central) while supporting the need for clarification from the CBN on the exchange rate of dollar to naira in the mentioned transactions, stated that the NSIA may have been short-changed in the transactions.
He added that the rates may explain the seeming slow progress, delay and non-completion of the key projects as some aspects will be based on import of materials which are denominated in dollars purchased at higher bureau de change rates.
Earlier, Orji stated that the NSIA since it began operations in the third quarter of 2013 with seed money of $1billion has 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 N163.8 billion has so far been disbursed for the three projects from the approved N672.4 billion earmarked.
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