Investment opportunities presented by the Covid-19 pandemic in the global equities market helped the Nigeria Sovereign Investment Authority (NSIA) to more than double its profit for the 2020 financial year, according to preliminary numbers which auditors are working on.
NSIA Chief Executive Officer, Uche Orji calls the 2020 financials which are expected to be released in coming weeks “quite impressive” and will show how the Authority sustained its positive performance trajectory despite the global health crisis.
“On the headlines, our profit last year was more than double the previous year, much more than double, perhaps, pushing up to triple the previous year. But we will see what the auditors come up with,” Orji told BusinessDay, though he did not disclose the actual figures since they are yet to go through the board for final approval.
But in 2019, NSIA – manager of Nigeria’s sovereign wealth fund, reported a net income of N34.87bn and a total comprehensive income of N36.15 billion.
The Authority equally reported a 5% growth in Total Assets to N649.84bn from N617.70 billion the previous year.
Interest income, a key component of its Total Income, was reported at N27.02 billion.
Orji said “the reason behind the 2020 performance was simple. One is the global equity markets. We were very confident that regardless of Covid, it was a buying opportunity like none other.
“We were aggressive somewhat, not as much as we would want to be, but we were able to push the limit of our risk management and we were able to get invested in the market.
“That’s big one for us. Developed markets equities, emerging markets equities did well. Our hedge fund investments did well, private equity investments all did well last year.
“So we are very happy, and I think across most of our investments, we totaled almost 60 investments in the international markets, the majority of them had good returns,” Orji added.
NSIA’s core capital as at today stands US$1.6 billion managed under three mandate funds: the Infrastructure Fund, the Future Generation Fund and Stabilisation Fund. In April last year, the federal government recalled some $150m from the total capital to enable it deal with the negative impact of the Covid-19 pandemic on the economy.
Asset allocation strategy remains stable across the various funds: Future generations fund remains 25% public equities, 25% private equity, 25% Absolute Returns and 25% Other diversifiers.
For the Infrastructure Fund areas of focus are Agriculture, Healthcare, Power, Toll Roads and Gas Industrialization.
NSIA has invested in several financial companies that help develop the capital markets including Nigerian Mortgage Refinance Company (NMRC), InfraCredit, NG Clearing, Development Bank of Nigeria, and Family Homes Funds.
At the onset of the Covid-19 pandemic, Orji had raised concerns about the unprecedented human and health crisis with significant impact on global markets – and could not predict the markets overall reaction to development.
But Orji is hopeful that 2021 will be a better year as certainty returns in the global markets.
“We are hoping our strong performance will continue through 2021,” Orji said.
Last week, NSIA sealed a $1.4bn deal with the OCP of Morocco to produce Ammonia and Diammonium Phosphate – 70 percent which is meant for export to Morocco and the remaining for local production of fertilizer.
