NSIA eyes sustainable income growth despite global market headwinds

…says impressive 2024 financials driven by cost efficiency, strategic risk management

The Nigeria Sovereign Investment Authority (NSIA) is charting a course for sustainable income growth in 2025, even as persistent global market volatility, geopolitical tensions, and inflationary pressures continue to weigh on institutional portfolios worldwide.

Nigeria’s sovereign wealth manager which posted a record N408 billion in core income for 2024, says it is deploying a cautious but growth-oriented strategy that prioritizes long-term value creation, diversification, and resilience across asset classes.

“The goal is stable income growth, consistent with our savings mandate”, Aminu Umar-Sadiq, Managing Director and CEO of NSIA told journalists on Wednesday in Abuja while presenting the Authority’s 2024 financial earnings and outlook.

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NSIA posted a record ₦1.86 trillion profit for 2024 fiscal year, marking its 12th consecutive year of profitability.

This growth from ₦1.17 trillion in 2023 was driven by a strong portfolio performance, including infrastructure assets and favorable foreign exchange movements.

Total Comprehensive Income (TCI) rose 59% to ₦1.89 trillion, while core TCI, excluding foreign exchange and derivative gains, surged 148% to ₦407.9 billion. NSIA’s net assets grew by 96%, reaching ₦4.35 trillion, reinforcing its key role in Nigeria’s economic transformation.

Aminu noted that the impressive financial results, especially net returns were driven by efficient balance sheet management, focus on sustainable earnings, pioneering infrastructure investment, as well as cost efficiency.

He said such strategy led to capital preservation, core operating income growth, infrastructure revenue as well as cost optimisation.

The 148% jump in TCI was driven by improved performance on fair value gains from externally managed investments due to market recoveries; increased earnings from Eurobonds, fixed deposits, commercial papers due to commitment to boosting sustainable earnings in 2024; increased returns from associates and joint venture entities; net gains on collaterised securiies, as well as net FX gains due to naira depreciation.

Moreso, the Authority’s three-ring portfolio structure — comprising the stabilisation fund – which gets 20% of total allocation; future generations fund, 30%; and Nigeria infrastructure fund, 50% — continues to anchor its income-generating strategy.

While the stabilisation fund acts as a liquidity buffer against macroeconomic shocks, the future generations fund is increasingly tilted toward high-quality global alternatives, private equity, and growth-oriented equities.

Infrastructure, a major priority under NSIA’s mandate, is also set to play a larger role in income generation. Strategic investments in toll roads, renewable energy, healthcare, and agro-industrial hubs are being structured to deliver stable, inflation-hedged cash flows over the long term.

During his presentation, Umar-Sadiq said despite local and global headwinds — including ongoing inflationary and fx pressures, declining oil prices, monetary policy adjustments, heightened concerns over global trade war and tighter global financial conditions — NSIA remains bullish on targeted opportunities.

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“Our strategic asset allocation on the stabilization and the future generations fund side, remain defensive,” he explained.

“We have allocations to private equity, hedge funds, real estate, inflation linked bonds. Whilst on the upside, where the markets are roaring, we may not be fully optimized, it protects us on the downside, which is very important because the mandate of our sovereign wealth fund, is largely its savings aspect.”

On the infrastructure front, the CEO acknowledged the scale of deficit in Nigeria, noting however that despite NSIA modest capital base, it has focused on capital mobilization, developing, structuring, and attracting external funding to scale up impact.

This model has enabled it to deliver landmark projects such as the Second Niger Bridge, Lagos-Ibadan Expressway, and portions of the Abuja-Kano road.

“With the right strategy, we have acted more as project sponsors, conceptualizing and positioning projects to attract bigger capital flows,” the executive explained.

Looking Ahead Umar-Sadiq, outlined eight strategic objectives that will guide the authority’s next phase of growth, while reinforcing its position as a continental leader in sovereign wealth management.

At the top of the agenda is the expansion of Assets Under Management (AUM). He emphasised the need to grow the size of the over $2.8billion sovereign wealth fund in proportion to Nigeria’s infrastructure deficit and large population.

“We must continue to augment the size of the NSIA—not just through the quality of our investments, but also through consistent capital injections, whether in cash or assets,” he said.

Another key priority is maintaining world-class governance. The NSIA boss stressed the importance of transparency, high standards of reporting, and institutional discipline in how the authority operates.

On infrastructure, Umar-Sadiq revealed that while NSIA has largely operated through platform-based investments, there is an increasing appetite to support large-scale infrastructure projects directly, especially as assets under management grow.

In 2025, NSIA also aims to improve operational efficiency. “We want to do more with less by optimizing our cost-to-income ratio and embedding audit, risk, and compliance frameworks into our investment evaluation process,” he said.

The authority will also focus on strengthening its subsidiaries. Notably, two new subsidiaries one in the financial guarantees space and another in venture capital are set to launch soon through strategic partnerships.

The CEO further highlighted the goal of generating sustainable income growth, regardless of external disruptions—be it political, economic, or health-related. “Whether it’s COVID, elections, or geopolitical instability, our investments must continue to deliver steady income,” he stated.

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According to him, NSIA’s 2025 roadmap also includes three primary action points: scaling implementation of key investment platforms such as Ripple (renewable energy), Medserve (healthcare), and CarbonVista (carbon markets); ensuring consistent capital growth in both Naira and USD; and driving core income growth.

Umar-Sadiq reiterated the importance of accountability through the Authority’s five-year rolling plan and expressed gratitude to stakeholders for their support during what he described as a landmark year for the organization.

He also emphasized a long-term investment philosophy of thinking big but starting small which remains central to its expansion efforts across infrastructure, healthcare, and renewable energy, all while preparing Nigeria for future economic realities.

Addressing questions about sustainability and project maintenance, he emphasized long-term thinking. For example, no medical equipment is procured without a 10-year operations and maintenance (O&M) contract to ensure near-perfect uptime.

Victor Sesere, NSIA’s Chief Financial Officer (CFO) announced that every revenue stream recorded above single-digit growth, with some showing triple-digit increases in 2024.

Highlighting the core performance, the CFO explained that total assets which nearly doubled to ₦4.4 trillion in 2024 was fueled by strong returns from investment securities and strategic placements across hedge funds, private equity, fixed deposits, and collateralized securities.

According to him, a $175 million capital injection from the government and FX gains played a role in the asset expansion.

The CFO also noted improvements in the institution’s operational efficiency. Cost-to-income ratio dropped by 100 basis points, down to 3.7%, indicating a leaner approach to generating revenue.

“We only spent 3.7% of our income to achieve these results. That’s very efficient,” he said.

In dollar terms, NSIA reported a core TCI of nearly $400 million and a total asset base of $2.88 billion, with net assets (shareholders’ equity) also standing at $2.8 billion. Since crossing the ₦1 trillion asset mark in 2022, the Authority has maintained an upward trajectory.

NSIA’s Chief Operating Officer and Executive Director, Ijeoma Taylaur, acknowledged the tough operating environment, noting that inflation, FX volatility, and a retreat of global funding initiatives like USAID and Power Africa have created major headwinds for infrastructure development.

“Inflation is terrible for infrastructure. When FX devalues, you can’t easily pass that on to customers, so we absorb it,” she noted in her presentation. “Also, there’s been a shift away from climate-focused financing, which has affected some of our green projects.”

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Despite these hurdles, Taylaur underscored the Authority’s resilience and adaptability. “What makes our infrastructure program special is that we always find ways to pivot,” she said, pointing to consistent results in 2023 and 2024 and optimism for 2025.

Among the forward-looking initiatives, she highlighted a pending non-binding collaboration agreement with Africa50 and UN Energy to set up a distributed renewable energy plan in 2025, building on the NSIA’s learnings from its RIPO and NSP transactions.

To scale its impact, Taylaur emphasized the need to grow the Authority’s Assets Under Management (AUM), describing it as a key priority for playing at a global level.

She explained that NSIA’s equity base also grew significantly in 2023, rising by $365 million. Of this, $175 million came from government contributions, while $190 million was generated organically from business operations.

Taylaur noted that even during years when no government funds were received (2020–2022), the Authority still managed to grow its assets and equity base.

“We are conservative investors, but we build for the long term”, she said, reinforcing the Authority’s strategic vision to create sustainable impact, backed by capital and operational discipline.