The three tiers of government will have to wait till next year for dividend from the Nigeria Sovereign Investment Authority (NSIA) as a result of a drop in 2017 profit.
Managing Director, NSIA, Mr. Uche Orji, disclosed this while addressing a press briefing on the financial performance of the agency in Lagos.
According to Punch Newspaper, under the investment plan of the NSIA, dividends were to be declared and paid to the three tiers of government only after a five-year continuous operational period which was 2017.
According to Orji, the total comprehensive income plummeted from N149.83 billion in 2016 to N27.93 billion in 2017 this represents an 81% decline in income. The agency also recorded an 82% decline in profit from N130.37 billion in 2016 to N22.55bn in 2017.
In his words:
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“The dividend policy was considered by the board but we decided to step it down and consider it again next year. But it is our keen desire to come up with a policy that will be approved by the Economic Council of the NSIA such that people will begin to actually see returns.”
Why the drop in Profit
Orji described 2017 as a challenging year for the agency, noted that the decline in profitability during the year was as a result of the currency management policy of the Federal Government which were aimed at stabilising the Naira in 2016.
According to him, this further weakened the Naira in value from N196 per dollar to N305 per dollar in 2016. While about 80 percent of the Authority’s assets were denominated in the United States Dollars, the devaluation impacted in significant exchange gains in the agency’s books.
He also said that the delay in inaugurating the NSIA board led to a lag in re-investment of matured funds, which affected profitability. Recall that the Vice President, Prof. Yemi Osinbajo, inaugurated the NSIA board in May last year.
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The plans to restructure its portfolio
He revealed plans by the agency to restructure its portfolio to focus more on domestic investment, noting that 50 percent of contribution will be dedicated to infrastructure as against the previous arrangement where 40 percent of the fund was allocated.
The new areas of priority for the agency are agriculture, healthcare, motorways, real estate and power.
The Nigeria Sovereign Investment Authority is an agency set up to manage the Sovereign Wealth Fund.
The agency derives its mandate from the NSIA Act which was signed into law in May 2011 that empowers the Authority to receive, manage and invest funds in a diversified portfolio of medium and long-term assets on behalf of the Federal Government, State Governments, Federal Capital Territory, and Local Governments Area Councils.
The agency commenced operations in 2013 with $1.55 billion, it also established three main investment portfolios, this includes the stabilisation fund, the Future Generations Fund, and the Nigeria Infrastructure Fund.