Amidst the challenging operating environment which has tested the resilience of institutions and businesses globally, the Nigerian Sovereign Investment Authority has continued to weather the storm by posting its nine consecutive year profit of N153.56bn in the 2021 financial period.
The positive result is coming as global economies continue to struggle with the recessionary forces and weak economic outlook.
In spite of a tough and volatile market, the NSIA’s investment strategy proved resilient and enabled the Authority to deliver favorable outcome as shown by the 2021 financial statement.
For instance, the Authority which was set up in 2012 to manage Nigeria’s Sovereign Wealth Fund achieved core income of N100.8bn in 2021 compared to N109.6bn in 2020.
This excludes foreign exchange gains of N45.8bn in 2021 and N51.2bn in 2020. The Authority recorded marginal decline of 8.17 per cent in Total Comprehensive Income from N160.06bn in 2020 to N146.98b in in 2021.
The NSIA also achieved a 19.02 per cent growth in Net Assets to N919.73bn in 2021 from the N772.75bn recorded in the preceding period of 2020.
The funds performed excellently on an individual basis with the Future Generation Fund (FGF) growing by 11.98 per cent to N976.868bn in 2021 while the Stabilization Fund (SF) and Nigeria Infrastructure Fund (NIF) grew by 1.60 per cent and N4.64 per cent to hit N278.827bn and N962.778bn respectively.
Nigeria Infrastructure Fund (NIF)
The NSIA reached major milestones across domestic infrastructure projects specifically in motorways, agriculture, healthcare, technology, gas industrialization among others.
Under the Presidential Fertiliser Initiative (PFI), the Authority produced over 12 million 50kg bags of NPK 20:10:10 equivalent in 2020, bringing total production since inception to over 30 million 50kg bags equivalent.
The number of participating blending plants increased to 44 from less than seven at inception in 2017.
Similarly, over 19 million bags of fertilizer have been delivered to farmers at 40 per cent below market prices, while the number of local blending plants that participated in the PFI program increased from 11 at the end of 2017, which is the first year of the program to 51.
The NSIA-UFF $200m Agriculture fund is engaged in the two-phase development of an animal feed processing business with backward integration through the farming of maize and soybean on about 3,500Ha of land in Panda, Nasarawa State (“Project Panda”).
Approximately 96 per cent (720ha) of the targeted 750ha of center pivot irrigation coverage has been achieved.
In line with the Fund’s objective, it successfully invested in a hyperscale cloud data company – Kasi Cloud Limited. The NSIA has invested about $12m in early stage, venture capital fund managers focused on the African technology space
- Gas Industrialization:
Under its gas industrialization initiative, the Authority made significant progress on developing the Ammonia and Di-Ammonium Phosphate production plants in partnership with OCP. Selected Ikot-Abasi in Akwa-Ibom as the project site after extensive review of several other locations.
- Toll Roads:
The three road projects being implemented by the NSIA under the Presidential Infrastructure Development Fund (PIDF) namely the Lagos-Ibadan Expressway, Second Niger Bridge and Abuja-Kaduna-Kano Highway have reached 66 per cent, 53 per cent and 66 per cent completion, respectively.
The target completion date for the first two projects is 2022 with 2025 set as the target date for the original scope on Abuja-Kaduna-Kano Highway.
The Authority also commenced operations at both the NSIA-Kano Diagnostic Centre and NSIA-Umuahia Diagnostic Centre in March and August of 2020 respectively.
It has also developed an Active Pharmaceutical Ingredient Manufacturing Plant (API) Company in Nigeria as well as commence the development, construction and operationalization 23 new modern medical diagnostic centers of excellence across all 6 geopolitical zones in the country, 2 Oncology centres in Enugu and Kaduna states and 6 Cath Labs.
This has helped to create access to quality healthcare for at least one million patients per annum.
The Authority has also expanded its footprint of diagnostic and single specialty centres and delivered $0.6m worth of Covid-19 relief equipment to Federal Tertiary Medical Institutions across all six geo-political zones in response to efforts to combat and prevent resurgence of Covid-19 virus.
Future Generations Fund (FGF)
The Future Generations Fund returned 11.98 per cent for the year, with Private Equity, Developed Equity and Hedge funds being the best performers in 2021.
The Hedge Funds: The hedge funds composite returned 12.75 per cent for the year. Returns ranged from -6.51 per cent (Palestra Capital) to 26.18 per cent (Naya fund).
The Naya fund has a 21.3% allocation within the Hedge Fund composite as at the end of December and was the top contributor to performance. Palestra was the only fund to have a negative year and accounts for an allocation of 5.92 per cent.
Equity Funds: The MSCI Developed Markets Index far outperformed the MSCI Emerging Markets Index in 2021, returning 21.82 per cent and -2.54 per cent respectively. The Emerging Markets Composite outperformed its benchmark, while the Developed Markets Composite underperformed its benchmarks.
Developed Market Equity: The Developed Equity Composite returned 17.46 per cent for the year, underperforming the MSCI World Index by 4.36 per cent.
The “Other ETFs” portfolio ended the year 13.93 per cent lower in USD terms and the US had the top passive ETF portfolio, returning 28.20 per cent. The top performing fund was the Cevian Capital Fund, returning 23.84 per cent for the year.
Private Equity: Private equity returned 32.14 per cent for the year. This composite return includes a diverse range of returns from the different private equity investments.
Stabilisation Fund (SF)
The Stabilisation Fund is invested in United States sovereign debt instruments and Investment Grade Corporate Credit. At the end of December 2021, 21 per cent of the fund was invested in a portfolio of US treasury bonds tracking the Bloomberg Barclays US Treasury bond 1–3-year index.
The fund returned 1.60 per cent for the year. The Nigeria treasury bills hedged to the US dollar was the best performing component, returning 3.69 per cent for the year.
The Nigeria Sovereign Investment Authority manages the Nigeria sovereign wealth fund into which the surplus income produced from Nigeria’s excess oil reserves is deposited.
This Fund was founded for the purpose of managing and investing these funds on behalf of the government of Nigeria, The fund was established by the Nigeria Sovereign Investment Authority Establishment Act 2011, signed in May 2011, and commenced operations in October 2012.
Mr. Uche Orji is the Managing Director & CEO of the Nigeria Sovereign Investment Authority (NSIA). He was the pioneer CEO from inception in 2012 and was reappointed in 2017 for a second and final 5-year term.
Uche led the operationalization of the NSIA and has been responsible for driving its growth strategy since 2012. Under his leadership, NSIA has become a highly regarded institution, serving as a vehicle for implementing key infrastructure projects and investing Nigeria’s savings.