ABUJA, June 22 (Reuters) - Nigeria is considering the set up of a private equity fund as part of its effort to fight poverty in Africa’s most populous nation and has asked a team of top government officials to work on the plan, the presidency said on Tuesday.
The proposed fund, the Nigeria Investment and Growth Fund (NIG-Fund) will lead resource mobilization and also manage the resources, the presidency said in a statement. It said the plan was part of the country’s poverty reduction and growth strategy.
Nigeria has announced several funding raising initiatives in the past with several others still on the drawing board.
The West African nation’s economy, the biggest on the continent, has been hammered by the fall in oil prices following disruption caused by COVID-19 pandemic. The country relies on crude exports for around 70% of government revenues.
Growth in Nigeria resumed in the fourth quarter after a COVID-19 induced recession but it lags the rest of sub-Saharan Africa, with food inflation, heightened insecurity and stalled reforms slowing the economy and increasing poverty, the World Bank has said.
In February, President Muhammadu Buhari approved the creation of a new company with a seed capital of 1 trillion naira ($2.43 billion), that will focus on infrastructure development.
Nigeria has considered tapping its sovereign wealth fund and domestic pensions to set up a $25 billion infrastructure fund to invest in the transport and energy sectors.
Poor transport and power networks in Nigeria have stymied economic growth for decades, holding back the distribution of wealth in the country which has Africa’s biggest economy but 40% of people live below the national poverty line of 137,430 naira ($334.48) per year.