The Nigeria Sovereign Investment Authority (NSIA), has announced a 19% increase in net assets in 2021 to N919.73 billion from N772.75 billion recorded in 2020.
This shows the 9th year of continuous earnings amid volatility and cyclical risks across markets, according to a statement issued after the NSIA announced its audited results for 2021 on Monday.
According to the statement, the strong financial performance underscores the resilience of the NSIA’s investment strategy and the quality of its earnings given the challenging macro environment.
However, the NSIA, managers of Nigeria’s sovereign wealth fund, recorded a Total Comprehensive Income of N147.0 billion in 2021, an 8.2% fall compared to 2020 at N160.1 billion; inclusive of FX gains of N45.8 billion in 2021, and N51.2 billion in 2020 respectively.
Also, Total operating income – Core income (exclusive of FX gains) of N100.8 billion in 2021, an 8% decline compared to N109.6 billion in 2020.
The Authority is committed to strengthening the Authority’s performance by strengthening our risk management teams.
Strong performance
Commenting on the result, the Managing Director/Chief Executive Officer, Uche Orji, said the Authority delivered a strong performance and that the results are in line with expectations.
He said the NSIA’s 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.”
Going forward, Orji noted that inflationary pressures will persist for much of this year, and would affect the performance of all asset classes, but reiterated the Authority’s commitment “to strengthening the Authority’s performance by strengthening our risk management teams.”
He continued: “In addition to expanding our direct investment footprint in innovation and technology in Nigeria, we have also designated ESG as an investment focus area. We will remain unrelenting in our quest to deliver the Authority’s clear 3-fold mandate. I am confident that the actions we are taking will create value for all our stakeholders in the medium to long term.
“NSIA will continue to drive direct investments in its core areas of healthcare, toll roads, gas industrialisation, technology, ESG, financial markets infrastructure, toll roads, power and agriculture.
“Asset transfer will be an important component of our growth strategy in the medium to long term as we see significant opportunities in the power and real estate in the Federal Government portfolio of assets.”
NSIA will continue to drive direct investments in its core areas of healthcare, toll roads, gas industrialisation, technology, ESG, financial markets infrastructure, toll roads, power and agriculture.
Infrastructure development
Further highlights revealed the NSIA reached major milestones across domestic infrastructure projects specifically in motorways, agriculture, healthcare, technology, and gas industrialization among others.
Agriculture – the Presidential Fertiliser Infrastructure (PFI) was listed as one of the Authority’s most successful intervention programmes. As of year-end 2021, 51 blending plans were included in the programme up from 11 in 2017.
“The operating entity of the programme NAIC-NPK (now PFI-NPK) has been divested to the Ministry of Finance Incorporated (MOFI) and is being managed by the Authority as a third-party asset. The restructured entity also turned a profit for the first time which is remarkable for what has been perennially a subsidized programme,” the statement said.
Also, the NSIA expects to inaugurate Panda Agric in mid-to-late 2022. Panda Agric is an investee company under the NSIA-UFF $200 million Agriculture Fund set up in 2016.
Panda farm 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 Nasarawa State.
Technology – In line with the Fund’s objective, it successfully invested in a hyper-scale cloud data company – Kasi Cloud Limited. Kasi Cloud is the next-generation interconnection and data centre platform for hyper-scale 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.
Gas Industrialization – Under its gas industrialization initiative, the Authority made significant progress in conceptualizing the development of the Ammonia and Di-Ammonium Phosphate production plants in partnership with OCP.
It has also secured a site for the plant and studies are ongoing including the early stages of selecting an EPC company.
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 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.
Healthcare – the Authority’s pilot healthcare centres continue to deliver value as expected. Having operationalized all three centres, over 60,000 patients have received care. Both NSIA-Kano Diagnostic Centre and NSIA-Umuahia Diagnostic Centre have provided services to over 50,000 patients while the Cancer Centre has attended to over 10,000 patients.
Investment performance
Among its investments, NSAI identified the Private Equity, Developed Equity, and Hedge Funds as the best performers in 2021.
The Future Generations Fund (FGF) returned 12% in dollar terms for the year, while the Hedge Funds returned higher at 12.75%, and Long Only Equity: the Developed Equity assets returned even more with 17.46% for the year.
Private Equity, venture capital and other diversifiers had a strong showing for the year at a combined +23%.
But the Emerging market equities posted a decline in the year of -1.92%.
Stabilisation Fund (SF): The Stabilisation Fund is invested in the United States sovereign debt instruments and Investment Grade Corporate Credit. At the end of December 2021, 21% 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% for the year, with the structured products sub-set returning 3.69% for the year.
