New Opportunities Are Coming, NSIA Says

*Completion of second Niger bridge, Lagos—Ibadan expressway, Abuja—Zaria—Kaduna—Kano road likely in 2022

The IMF projects that low oil prices and the impact of covid-19 will plunge the Nigerian economy into its worst recession in 30 years, but the Nigeria Sovereign Investment Authority (NSIA) assures that significant monetary and fiscal adjustments being made would be able to ameliorate the downturn now facing every nation’s economy.

Speaking at a virtual press conference to present the intervention agency’s audited financial statements for 2019, on Friday, the managing director/CEO of NSIA, Mr Uche Orji, acknowledged that the economy may feel discomforts, but “we expect that at some point markets will settle and new opportunities will present themselves as the world comes to terms with the new normal”. 

“The Authority will continue to deploy capital into vital sectors of the economy with increased focus on sectors that will engineer real growth,” he said at the press conference addressed by the top management of NSIA. 

The 2019 financial statements audited by PricewaterhouseCoopers boast mainly positive performances: N36.15bn was the total income generated in 2019, an 18% reduction relative to the 2018 income of N44.37bn. But interest income earned in 2019 was N27.02bn, a 13% increase over the N23.82bn recorded in 2018. Real performance on core activities of the Authority was better than 2018 by 35% when currency revaluation income earned in 2018 is excluded, Orji stated.

Other highlights of the 2019 financial statements include:

  • a 5% growth in total assets to N649.84bn from N617.70bn in 2018, an increase of N32.15bn
  • 5.81% return from the Stabilisation Fund, outperforming its benchmark, the US CPI, by a 381 basis points: third-party funds managed by NSIA increased: DMO’s from US$122.60m in 2018 to US$124.03m; Stabilisation Fund (for Ministry of Finance) from N20.814bn in 2018 to N33.365bn
  • deployment of over 90% of capital in the Future Generations Fund — the fund returned 6.45%, outperforming its benchmark of 6.43% (US CPI + 4)

At the end of 2019, “NSIA’s core capital remained at US$1.5 billion,” executive director/COO Stella Ojekwe-Onyejeli stated. “However, the National Economic Council voted for an additional capital contribution of US$250 million in 2019 which was received on the 8th of April 2020.”

The NSIA projects include all those under the Presidential Infrastructure Development Fund (PIDF): the second Niger bridge, Lagos–Ibadan expressway and Abuja—Zaria–Kaduna–Kano road which, as of December 2019, had been funded with N181.9bn. “All three projects are on course for completion in 2022 as construction milestones are outpacing the project calendar despite the impact of covid-19,” said executive director Aminu Umar-Sadiq.

Among other projects in which the Authority invested in 2019 were:

  • the Cancer Centre at Lagos University Teaching Hospital 
    • the Advanced Diagnostic Centre located in Aminu Kano University Teaching Hospital
    • the Advanced Diagnostic Centre in Federal Medical Centre, Umuahia
    • Panda Farms, a fully integrated farm located in Nasarawa State
    • Kano Solar, a 10MW solar power plant in Kumbotso LGA, Kano State
    • development of Basic Chemicals platform with OCP of Morocco to produce Ammonia and other fertilizer products
    • the Presidential Fertiliser Initiative (PFI), which delivered 6.5million 50kg bags of NPK 20:10:10
    • accredited participating blending plants increased to 31 from 18 plants in 2018

The Authority hopes to deliver between 10 million and 12 million bags of fertilizer to farmers in 2020, even as it strives to enable the creation of significant direct and indirect jobs across the agriculture value chain including in logistics, ports, bagging, rail, industrial warehousing, and haulage.

NSIA’s performance in 2019, Orji stated, reflects the strength of its strategy across all the funds: “We deployed our diversified asset strategy and secured positive returns from the international markets across all asset classes. All asset classes including equities, hedge funds and private equity outperformed. In the period, we also judiciously deployed capital toward key infrastructure projects and recorded significant progress.”  

Yet, the outlook for 2020 appears grim, he admitted, due to covid-19 and the instability it has introduced in global markets.

NSIA was created via the NSIA (establishment) Act 2011 by the Goodluck Jonathan administration to receive, manage and invest some surplus income from the excess crude reserves.

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