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.
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.
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