The Nigeria Sovereign Investment Authority (NSIA), manager of Nigeria’s sovereign wealth fund, has recorded a Total Comprehensive Income of N147 billion in 2021, a decline of 8.2% from the N160 billion recorded in 2020.
This was disclosed by NSIA via a statement issued after it announced its audited results for 2021 on Monday.
According to the statement, the strong financial performance underscores the resilience of the NSIA’s investment strategy and the quality of its earnings given the challenging macro environment.
Highlights of NSIA’s activities and performance:
Financials
- Recorded 9th year of continuous earnings despite volatility and cyclical risks across markets.
- Total Comprehensive Income of N147.0 billion in 2021 a decline of 8.2% relative to 2020 at N160.1 billion; inclusive of FX gains of (N45.8 billion in 2021 and N51.2 billion in 2020).
- Total operating income – Core income (exclusive of FX gains) of N100.8 billion in 2021, down 8.0% compared to 109.6 billion in 2020.
- Net Assets grew 19.0% to N919.73 billion in 2021 (2020: N772.75 billion).
- Positive returns across the three funds.
Fund Performance
Nigeria Infrastructure Fund (NIF)
The NSIA reached major milestones across domestic infrastructure projects specifically in motorways, agriculture, healthcare, technology, and gas industrialization among others.
- Agriculture:
PFI: The Presidential Fertiliser Infrastructure is one of the Authority’s most successful intervention programmes. As of year-end 2021, 51 blending plans have been included in the programme starting from 11 in 2017. The operating entity of the programme NAIC-NPK (now PFI-NPK) has been divested to the Ministry of Finance Incorporated (MOFI) and is being managed by the Authority as a third-party asset. The restructured entity also turned a profit for the first time which is remarkable for what has been perenially a subsidized program. - PandaAgric – NSIA expects to commission Panda Agric in mid-to-late 2022. Panda Agric is an investee company under the NSIA-UFF US$200m Agriculture Fund set up in 2016. Panda farm is engaged in the two-phase development of an animal feed processing business with backward integration through the farming of maize and soybean on about 3,500Ha of land in Nasarawa State (“Project Panda”). Approximately 96 per cent (720ha) of the targeted 750ha of centre pivot irrigation coverage has been achieved.
- Technology: In line with the Fund’s objective, it successfully invested in a hyper-scale cloud data company – Kasi Cloud Limited. Kasi Cloud is the next-generation interconnection and data centre platform for hyper-scale and enterprise cloud solutions. The company focuses on enabling cloud and digital transformation in Africa starting in Lagos, Nigeria. Kasi has commenced the construction of a “Tier IV” data centre worth US$250 million in Lagos.
- Gas Industrialization: Under its gas industrialization initiative, the Authority made significant progress in conceptualizing the development of the Ammonia and Di-Ammonium Phosphate production plants in partnership with OCP. We have secured a site for the plant and studies are ongoing including the early stages of selecting an EPC company.
- Toll Roads: The three road projects being implemented by the NSIA under the Presidential Infrastructure Development Fund (PIDF) namely the Lagos-Ibadan Expressway, Second Niger Bridge, and Abuja-Kaduna-Kano Highway have reached advanced stages of construction. The target completion date for the first two projects is 2022/2023 with 2025 set as the delivery date for the revised scope on Abuja-Kaduna-Kano Highway.
- Healthcare: The Authority’s pilot healthcare centres continue to deliver value as expected. Having operationalized all 3 Centres, over 60,000 patients have received care. Both NSIA-Kano Diagnostic Centre and NSIA-Umuahia Diagnostic Centre have provided services to over 50,000 patients while the Cancer Centre has attended to over 10,000 patients.
Future Generations Fund (FGF)
The Future Generations Fund returned 12% in USD terms for the year, with Private Equity, Developed Equity, and Hedge funds being the best performers in 2021.
- The Hedge Funds: The hedge funds composite returned 12.75% for the year.
- Long Only Equity: The Developed Equity assets returned 17.46% for the year. Emerging market equities posted a decline in the year of -1.92%.
- Private Equity: Private equity, venture capital and other diversifiers had a strong showing for the year at a combined +23%.
- Stabilisation Fund (SF): The Stabilisation Fund is invested in the United States sovereign debt instruments and Investment Grade Corporate Credit. At the end of December 2021, 21% of the fund was invested in a portfolio of US treasury bonds tracking the Bloomberg Barclays US Treasury bond 1–3-year index. The fund returned 1.60% for the year, with the structured products sub-set returning 3.69 per cent for the year.
Outlook
- We believe 2022 will be the most challenging investment environment in the last 15 years as a combined effect of Inflation, Russia-Ukraine and covid related supply chain challenges combine to create a tough environment for most asset classes.
- NSIA will continue to drive direct investments in its core areas of healthcare, toll roads, gas industrialisation, technology, ESG, Financial markets infrastructure, toll roads, power and agriculture.
Asset transfer will be an important component of our growth strategy in the medium to long term as we see significant opportunities in the power and real estate in the Federal Government portfolio of assets.
What NSIA’s CEO is saying
The MD & CEO, Mr Uche Orji, said, “2021 marked the end of another solid fiscal year at NSIA. In the period, the Authority delivered a strong performance. While the results are in line with the Authority’s expectations, the strong performance of our developed market investments was offset by challenges in our emerging market asset allocation, particularly in China equities, which saw significant underperformance by technology company stocks.
“Looking ahead to 2022 and beyond, we believe inflationary pressures will persist for much of this year, affecting the performance of all asset classes. We remain committed to strengthening the Authority’s performance by strengthening our risk management teams. In addition to expanding our direct investment footprint in innovation and technology in Nigeria, we have also designated ESG as an investment focus area. We will remain unrelenting in our quest to deliver the Authority’s clear 3-fold mandate. I am confident that the actions we are taking will create value for all our stakeholders in the medium to long term.”
