Abuja—Positive returns have been reported by the Nigeria Sovereign Investment Authority, or NSIA, with net assets growing by 19% to N919.73 billion in 2021 from N772.75 billion in 2020.
Despite market risks in previous years, the authority reported consistent earnings for the ninth year.
According to a report issued yesterday by Uche Orji, Managing Director and Chief Executive Officer, NSIA’s 2021 comprehensive income was N147.0 billion, which included N45.8 billion in foreign exchange profits.
He also disclosed that, excluding foreign exchange gains, the authority’s overall operating income (core income) for 2021 was N100.8 billion.
The NSIA “delivered a strong performance” last year, according to Orji, and “the results are in line with the Authority’s expectations.”
He said that difficulties in our emerging market asset allocation, especially in China equities, where technology company stocks suffered notable underperformance, “were offset by the performance of the authority’s developed market investments.”
“Looking ahead to 2022 and beyond, we believe inflationary pressures will persist for much of this year, affecting the performance of all asset classes,” he stated when asked what to anticipate this year and in the years to come.
However, he stated that the NSIA is still “committed to strengthening our risk management teams in order to strengthen the Authority’s performance.”
The Scheme
Regarding the strategy, he stated: “We have identified ESG as an investment target area in addition to growing our direct investment footprint in innovation and technology in Nigeria. We shall not give up on fulfilling the authority’s unambiguous three-pronged mandate. In the medium to long term, I have no doubt that the steps we are taking will benefit all of our stakeholders.
“NSIA achieved significant milestones across domestic infrastructure projects, specifically in motorways, agriculture, healthcare, technology, and gas industrialization among others,” he stated, breaking down the performance in terms of the Nigeria Infrastructure Fund (NIF).
Regarding farming, he stated that 51 mixing plants have been included in the programme, starting from 11 in 2017.
The Ministry of Finance Incorporated (MOFI) now owns the operating entity of the program NAIC-NPK (now PFI-NPK), which is run by the Authority as a third-party asset. For the first time, the reorganized organization also made money, which is noteworthy considering that it has always been a funded program, he added.
According to Orji, NSIA anticipates commissioning Panda Agric, “an investee company under the NSIA-UFF US$200m Agriculture Fund set up in 2016,” around the middle to late 2022. Panda Farm is cultivating maize and soybeans on over 3,500 hectares of land in Nasarawa State as part of a two-phase backward integration animal feed production enterprise.
Technology
Regarding technology, the NSA MD stated that “the Fund successfully invested in a hyperscale cloud data company – Kasi Cloud Limited – in line with the Fund’s objective.” The next-generation data center and connectivity platform for enterprise and hyperscale cloud applications is called Kasi Cloud. Based in Lagos, Nigeria, the company specializes in facilitating cloud and digital transformation in Africa. In Lagos, Kasi has started building a “Tier IV” data center that would cost $250 million.
According to him, the NSIA made “significant progress in conceptualizing the development of the Ammonia and Di-Ammonium Phosphate production plants in partnership with OCP” as part of its gas industrialization effort. We have found a location for the facility, and research is still being done, including the first steps of choosing an EPC firm.
According to Orji, NSIA is carrying out three road projects that have advanced in construction under the Presidential Infrastructure Development Fund (PIDF). These projects are the Abuja-Kaduna-Kano Highway, the Lagos-Ibadan Expressway, and the Second Niger Bridge.
“The first two projects are expected to be completed in 2022/2023, and the revised scope on the Abuja-Kaduna-Kano Highway is scheduled for delivery in 2025,” he stated.
Regarding its healthcare intervention, he stated that pilot healthcare centers are still providing the anticipated benefit.
After all three centers were operationalized, more than 60,000 patients were treated. Over 50,000 patients have received services from the NSIA-Kano Diagnostic Center and NSIA-Umuahia Diagnostic Center, while over 10,000 patients have received care from the Cancer Center.
An Active Pharmaceutical Ingredient Manufacturing Plant (API) Company is being developed in Nigeria by the authority. The development plans for the construction and operationalization of 23 new, state-of-the-art medical diagnostic centers of excellence, spanning all six geopolitical zones of the nation, have been approved by NSIA, he added. Two oncology centers are to be built in the states of Enugu and Kaduna, and six cath labs.
Fund for Future Generations
“Private equity, developed equity, and hedge funds were the best performers in 2021,” he added, adding that the Future Generations Fund returned 12% in USD terms for the year.
“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,” he said of the Stabilization Fund, adding that HSIA “invested in the United States sovereign debt instruments and Investment Grade Corporate Credit.”
2022 will be the most difficult time to invest in the last 15 years, according to the NSIA MD, “because of the combined impact of inflation, Russia-Ukraine, and COVID related supply chain challenges, which create a tough environment for most asset classes.”
“Asset transfers will be an important component of our growth strategy in the medium to long term as we see significant opportunities in power and real estate in the Federal Government portfolio of assets,” he said, adding that NSIA will continue to drive direct investments in its core areas of healthcare, toll roads, gas industrialization, technology, ESG, Financial markets infrastructure, toll-roads, power, and agriculture.
