Right investment decisions, particuarly in equities and hedge funds, helped Nigeria Sovereign Investment Authority (NSIA) push up net profit 3028% in FY2014 to N15.8 billion from N505 million in FY2013. Figures from the NSIA, the official manager of the country’s Sovereign Wealth Fund, indicate that FY2014 saw the authority report total revenue of N7.2 billion and change in fair value of assets of N10.5 billion.
Total operating and administrative expenses remained moderately steady at N1.6 billion. In the first quarter of 2014 alone, the authority had announced a profit of N1.2 billion almost double what it realised in the entire 2013.Uche Orji, NSIA CEO, noted, “Key drivers of performance included investments in secondary interests in private equity, developed market along only equities, absolute return hedge fund investments complemented by a long dollar currency position versus other currencies,” in a note to BusinessDay.
Orji had said earlier that the Nigeria’s sovereign wealth fund (SWF) had a “good year” after weighting its investments toward dollar assets last year. The financial statements were approved by the authority’s board on March 24, 2015 and signed off by the chairman, Mahey Rasheed; managing director, Uche Orji, as well as the authority’s financial controller, Olubisi Majoku. Total assets was recorded at about N177.838 billion, growing from N157.6 billion as total liabilities at N6.3 billion equally expanded from about N1.8 billion.
The NSIA manages the Nigeria’s Sovereign Wealth Fund which took off in 2012 with $1 billion seed capital. $200 million was allocated to the stabilisation fund, $400 million to infrastructure fund and $400 million to future generations fund. Last year, the Federal Government approved a $550 million fresh allocation for the investment body to manage on its behalf. $350 million of this amount is being managed on behalf of the Nigerian Bulk Electricity Trader (NBET). Of this amount, “$350 million would be managed under the stabilisation fund and $250 million under the Nigeria infrastructure fund”, Orji, NSIA CEO, said at the time.
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Major investments so far include $10 million in the Nigerian Mortgage Refinancing Company (NMRC) to improve its market position. For infrastructure fund, investments would focus on five key sectors, including agriculture, real estate, motorways, power and health out of 12-13 areas it has painstakingly founded. On motorways project, NSIA is investing in the second Niger Bridge, working with Julius Berger alongside equity partners. The project is the first federally public private partnership (PPP) in motorways in Nigeria.
The Federal Government is unlikely to make withdrawals from the fund to shore up revenue in the face of low oil prices as Orji sees the fund not yet large enough to make withdrawals worthwhile.
