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The NIF option

April 20, 2014

Abstract: The creation of the National Investment Fund (NIF) was first proposed by the government in 2004 with the aim of pooling disinvestment proceeds and re-investing them in social priorities. This proposal never came to fruition. It is contended that the idea of an NIF still holds merit, although its focus should be only on infrastructure investment. Further, a framework should be designed in recognition of two lessons from the past, namely: (a) investments must be synchronized and balanced across sectors; and (b) the current PPP framework has failed to deliver.

Three factors are essential for NIF’s success: (i) a cohesive investment strategy; (ii) expanded source of financing (well beyond disinvestment proceeds); and (iii) transparent and accountable governance. A well-designed and well-governed NIF framework can help address the issues currently ailing infrastructure investment.

Keywords: National Investment Fund (NIF); disinvestment; PPP; governance; infrastructure; sectoral investment

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