The Nigeria Sovereign Investment Authority (NSIA) – managers of the country’s Sovereign Wealth Fund (SWF) has announced a 1,122% surge in its total Comprehensive Income which closed at ₦1.18 trillion for 2023, relative to ₦96.96 billion reported in 2022.
This was contained in its 2023 audited financial results released Thursday night.
Total Comprehensive Income (excluding foreign exchange gains) rose from ₦21.39 billion in the previous year to ₦164.69 billion, marking a 670% increase which was attributed to the Authority’s robust strategic asset allocation and adherence to best-in-class enterprise risk management processes.
Net Assets grew 119% to ₦2.22 trillion as at Dec 2023 as against ₦1.02 trillion the corresponding period the previous year.
The NSIA also posted total operating income which surged from ₦101.1 billion in the previous year to ₦1.18 trillion, inclusive of foreign exchange gains during the period.
This significant rise was attributed to the positive performance of the equities and fixed-income portfolios, as well as the positive performance of NSIA’s infrastructure investments.
The impressive result shows eleven straight years of continuous positive earnings with a cumulative annual growth rate of 117.3% so far.
Commenting, Aminu Umar-Sadiq Managing Director & Chief Executive Officer, NSIA
noted that the financial performance underscores the resilience of the NSIA’s investment strategy and the quality of its earnings, despite the challenging global macro-economic, and geo-political landscape.
“Our excellent results in 2023 and consistent positive performance over a decade offer further proof of our robust strategic asset allocation, proficient execution of our infrastructure initiatives as well as effective risk management processes.
“We remain firmly committed to catalysing positive socio-economic outcomes through critical infrastructure investments; strategic partnerships that expand our impact across pivotal sectors; and solutions that not only deliver our mandate but simultaneously uphold environmental stewardship,” Umar-Sadiq remarked.
“Looking ahead, we re-affirm our focus on creating shared prosperity for current and future generations of Nigerians,” he added.
As contained in the breakdown of the financials seen by BusibessDay, several key highlights contributed to the Group’s (Authority and Subsidiaries) performance during the 2023 financial year.
The NSIA ensured capital growth and preservation through focus on risk-adjusted returns – involving optimising asset allocation and utilisation, retaining a significant portion of the assets under management in foreign-denominated investments, diversifying the portfolio to mitigate risk, and maintaining a defensive investment strategy.
Secondly , it was able to drive growth in core operating income through delivering increased yields from short to medium-term investments, growing third-party mandates and other fiduciary activities, and strengthening earnings resilience by diversifying revenue sources.
Also Infrastructure revenue grew by optimising existing impactful investment platforms to enhance efficiency and performance.
Again, it’s well-diversified asset allocation techniques helped the Authority improve risk-adjusted earnings from the Authority’s externally managed investments.
Another strategy was its cost optimisation which entailed m achieving operational efficiency, business process automation, budgetary and cost controls through technology enhancements and innovation.
With a $1bn seed capital, NSIA officially commenced operations in 2012 as an investment institution of the Federation set up to manage funds in excess of budgeted hydrocarbon revenues.
It operates three mandate funds – the Stabilisation Fund, the Future Generations Fund, and the Nigeria Infrastructure Fund (NIF).
As contained in the report, the NIF in 2023 pivoted to a thematic approach to investing, prioritising trends and long-term growth potential across five strategic thematic areas: Transport and Logistics; Industrialisation; Services; Technology and Innovation; as well as Climate and Sustainability.
This is just as it continued to maintain its status as the premier public sector institution that develops, executes and invests in complex infrastructure projects through its activities in NIF and other Governmental mandates.
In 2023, the Future Generations Fund (FGF) attained its highest annual return since its establishment.
“This was achieved through strict adherence to strategic asset allocation and a methodical increase in market exposure.” NSIA stated.
For the Stabilisation Fund which is largely invested in US sovereign debt instruments and Investment Grade Corporate Credit, its performance surpassed expectations, outperforming its benchmark by seven hundred basis points.
“ This translated to a benchmark beating return of 10.54%, significantly outpacing US CPI which was 3.3% over the same period.” NSIA explained.
It further assured to continue to drive direct investments across its 5 core thematic areas of Agriculture, Healthcare, Power, Toll Roads and Gas Industrialization, all implemented under the infrastructure fund.
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