NSIA weighs investment strategy to deliver on returns



The Authority continues to monitor market conditions




Despite the increasing uncertainty in the business environment occasioned by the Coronavirus (Covid-19) pandemic crisis, the Nigeria Sovereign Investment Authority (NSIA) has said that it is depending on its investment strategy to continue to deliver positive returns in the long term.


The Managing Director, NSIA, Mr. Uche Orji, stated this while speaking on the authority’s financial performance in 2019 at a session with journalists recently. According to him, despite headwinds, the outlook for the Authority, which manages Nigeria’s sovereign wealth fund, remains promising.


He said: “The onset of the Covid- 19 pandemic has caused an unprecedented human and health crisis with significant impact on global markets. As such, it may be difficult to predict the markets overall reaction to development.


“It is predictable that the volatility introduced by the onset of the pandemic may linger. However, the Authority continues to monitor the market conditions  with the view to leverage the upside risks that avail themselves in the market.


“We expect that our investment strategy will continue to deliver positive returns in the long term in 2020 as the markets normalise and new opportunities emerge.”


The NSIA boss said asset allocation strategy remained stable across its three mandate fundsthe Stabilisation Fund (SF), the Future Generations Fund, and the Nigeria Infrastructure Fund, adding that Future generations Fund remains 25 per cent public equities, 25 per cent private equity, 25 per cent Absolute Returns and 25 per cent


Other diversifiers. On the Stabilisation Fund, he said: “The period under review saw policy alignments across major economies which provided clear forward guidance to markets and reducing levels of volatility.


As such, the Fund’s strategy of investing in diversified products across the yield curve provided returns. At year-end 2019, the SF has been fully invested. In terms of return on investment, the Stabilisation Fund returned 5.81 per cent, outperforming its benchmark, the US CPI, by a 381 basis points.”


The areas of focus for the Nige  ria Infrastructure Fund, according to him, include agriculture, healthcare, power, toll roads and gas industrialisation.


Orji said the NSIA had closed key transactions and increased capital deployment on domestic infrastructure projects specifically in motorways, agriculture, healthcare, and power.


He stated: “Operationalising several subsidiaries of the NSIA will be a key focus especially in the healthcare sector where we have several projects in the pipeline.”


Specifically, he disclosed that the NSIA operationalised the cancer centre at the Lagos University Teaching Hospital in May 2019. Furthermore, he said the authority recorded significant progress on the civil and construction works at the Advanced Diagnostic Centres at both the Federal Medical Centre Umuahia and Aminu Kano Teaching Hospital.


These construction works, he said, were subsequently completed in 2020.


He also noted: “NSIA has invested in several financial companies that help develop the capital markets including Nigeria Mortgage Refinancing Company, InfraCredit, NG Clearing, Development Bank of Nigeria, and Family Homes Funds.


“We will continue to work on strengthening these entities and making new investments in companies that strengthen financial market infrastructure.”


The NSIA boss said the au  thority  would continue to deploy capital into vital sectors of the economy with increased focus on sectors that will engineer real growth. On the Presidential Fertiliser Initiative, he revealed that the NSIA delivered 6.5 million bags of 50kg bags of NPK 20:10:10 while accredited participating blending plants increased from 18 to 31 in 2019.


Commenting on the Presidential Infrastructure Development Fund, Orji said the authority received N90 billion from government and deployed capital across three of the major road projects under the PIDF.


The three major road projects, according to him, are the Second Niger Bridge, Lagos – Ibadan Expressway and Abuja-Zaria- Kaduna-Kano Road. As of the end of 2019, it said a total of N181.9 billion had been deployed across all the three projects.


New Telegraph’s analysis of the NSIA’s audited financial results for 2019 Financial Year shows that it recorded a five per cent growth in its total assets, from N617.7 billion in 2018, to N649.84 billion as of the end of 2019.


It also recorded a profit after tax of N34.4 6 billion in the 2019 financial period.


In addition, the Authority recorded total comprehensive income of N36.15 billion in 2019 as against the N44.34 billion it recorded in 2018.


Excluding foreign exchange gain of N18 billion in 2018 and N1.28 in 2019, the net income in 2019 was N34.87 billion compared to N26.28 billion in 2018.


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