The Nigeria Sovereign Investment Authority (NSIA), managers of Nigeria’s Sovereign Wealth Fund, penultimate week, released its audited results for the 2021 financial year with strong earnings amid a challenging global economic environment.
Speaking at a virtual press conference, NSIA’s Managing Director and Chief Executive, Mr Uche Orji, explained that 2021 marked NSIA’s ninth year of continuous earnings in the mid of volatile and cyclical shocks witnessed across the global marketplace last year.
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Details of the fund’s performance showed it made a Total Comprehensive Income of N147.0 billion in 2021, a decline of 8.2 per cent relative to 2020 at N160.1 billion; inclusive of FX gains of (N45.8 billion in 2021 and N51.2 billion in 2020).
Similarly, NSIA’s Total Operating Income – core income (exclusive of FX gains) of N100.8 billion in 2021, down 8.0 per cent compared to N109.6 billion in 2020.
But its Net Assets grew 19.0 per cent to N919.73 billion in 2021 from N772.75 billion in 2020.
The authority, set up in 2012 to manage Nigeria’s Sovereign Wealth Fund, amid the global headwinds in its trading activities last year, returned positive trends across its three managed fund classes.
Orji said, “While the results are in line with the authority’s expectations, strong performance of our developed market investments were offset by challenges in our emerging market asset allocation, particularly in China equities, which saw significant underperformance by technology company stocks.
“Looking ahead to 2022 and beyond, we believe inflationary pressures will persist for much of this year, affecting the performance of all asset classes. We remain committed to strengthening the authority’s performance by upgrading our risk management teams. In addition to expanding our direct investment footprint in innovation and technology in Nigeria, we have also designated an ESG as an investment focus area. We will remain unrelenting in our quest to deliver the Authority’s clear three-fold mandate. I am confident that the actions we are taking will create value for all our stakeholders in the medium to long-term.”
It is imperative to realise that much of improvements recorded during the year were seen in the various funds under management.
In the agriculture space, its Presidential Fertiliser Infrastructure (PFI) turned out to be one of the authority’s most successful intervention programmes.
As at the end of 2021, for instance, NSIA had upgraded its fertiliser blending plants from 11 in 2017 to 51 included in the programme.
The operating entity of the programme NAIC-NPK (now PFI-NPK) was divested to the Ministry of Finance Incorporated (MOFI) and now being managed by the authority as a third-party asset.
This restructured entity has indeed turned a profit for the first time in a development considered remarkable for an asset class that had been a subsidised programme.
To further entrench its agricultural footprints across the country, the Uche Orji-led NSIA management said it would be commissioning its Panda Agric initiative in mid-to-late 2022. Panda Agric is an investee company under the NSIA-UFF $200 million Agriculture Fund set up in 2016.
According to Orji, approximately 96 per cent (720ha) of the targeted 750ha of centre pivot irrigation coverage has been achieved in the year under review, thus setting the stage for replication of the project in other pilot locations across the country.
The fund successfully invested in a hyperscale cloud data company – Kasi Cloud Limited. Kasi Cloud is the next-generation interconnection and data center platform for hyperscale and enterprise cloud solutions. The company focuses on enabling cloud and digital transformation in Africa starting in Lagos, Nigeria. Kasi has commenced the construction of a “Tier IV” data centre worth $250 million in Lagos.
Under its gas industrialisation initiative, the Authority made significant progress in conceptualising the development of the Ammonia and Di-Ammonium Phosphate production plants in partnership with OCP.
It had since secured a site for the plant with studies on-going, including the early stages of selecting an EPC company.
Similarly, 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 advanced stages of construction.
The target completion date for the first two projects is 2022/2023 with 2025 set as the delivery date for the revised scope on Abuja-Kaduna-Kano Highway.
The funds Future Generation Fund (FGF) grew by 11.98 per cent to N976.868 billion in 2021 while the Stabilisation Fund (SF) and Nigeria Infrastructure Fund (NIF) grew by 1.60 per cent and N4.64 per cent to hit N278.827billion and N962.778 billion respectively.
Commenting on the Nigeria Infrastructure Fund, Orji said NSIA reached major milestones across domestic infrastructure projects especially in motorways, agriculture, healthcare, technology, gas industrialisation among others.
He also revealed that the Second Niger Bridge was now 94 per cent completed, as the facility would become usable by December, 2022, even as ancillary works continued on other phases of the project.
Under the Presidential Fertiliser Initiative (PFI), Orji said it 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.
In the healthcare sub sector, NSIA’s management reported that its pilot healthcare centres had continued to deliver value. With the operationalisation of all its three centres in Lagos, Umuahia and Kano, it reported a record 60,000 patients that had received care in the year being reviewed.
According to Orji, NSIA-Kano Diagnostic Centre and NSIA-Umuahia Diagnostic Centre have provided services to over 50,000 patients, while the cancer centre attended to over 10,000 patients.
He said the authority was in the process of developing an Active Pharmaceutical Ingredient Manufacturing Plant (API) in Nigeria having secured approval for the development, construction and operationalisation of 23 new modern medical diagnostic centres of excellence covering all the six geopolitical zones in the country.
This is even as it is working towards the building of two oncology centres in Enugu and Kaduna states, in addition to six Cath Labs.
NSIA’s healthcare investments will further help to create access to quality healthcare for at least one million patients per annum.
Commenting on the outlook for the future, the NSIA boss said, “We believe 2022 will be the most challenging investment environment in the last 15 years as a combined effects of inflation, Russia-Ukraine and COVID-related supply chain challenges combine to create a tough environment for most asset classes.
NSIA will continue to drive direct investments in its core areas of: healthcare, toll roads, gas industralisation, technology, ESG, financial markets infrastructure, power and agriculture.”
He further stated that asset transfers would be an important component of the authority’s growth strategy in the medium to long term as it sees significant opportunities in power and real estate in the federal government’s portfolio of assets.
He said, “We are hoping to engage with the government to look at certain assets that we can manage on their behalf, and we believe that we have shown a lot of competence in asset management because that is some of the things we have done with some of the presidential programmes that we have run.”
The NSIA boss also stated that abandoned power plants would be looked into so that more profit can be maximised for the government.
He said the NSIA is being positioned as an assets management company in line with one of Singaporean Sovereign Wealth Fund Temasek Holdings, which manages about $405 billion worth of assets.
Nigeria has unproductive assets scattered across various parts of the country, which the government can leverage to grow its revenue stream and fulfil its financial obligations.