The Managing Director of the Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji, Tuesday disclosed that the organisation which manages the country’s sovereign wealth fund tripled its profits in 2020.
Speaking when he appeared on the “Good Morning Show” on Arise Television, Orji attributed the relative success recorded by the NSIA last year to the business decisions taken by the authority.
He explained that some of NSIA’s portfolios were up by as much as 50 per cent in dollar terms in 2020, predicting that although the financial technology sector ruled the market last year, there will be a broader profit ecosystem this year as countries continue to open up on the back of increasing Covid-19 vaccine jabs.
The NSIA helmsman noted that the body had been aggressive in terms of its focus on international equities, private equity investments, venture capital and direct investments in the international market, where much of the profits came from.
He disclosed that with the exception of just one or two portfolios, every single asset class made substantial returns to the NSIA last year, with the headline number being N160 billion , while the net profit stood at N108.9 billion
For the 2019 financial year, the NSIA had said it recorded a Total Comprehensive Income (TCI) of N36.1 5 billion, less than that of 2018, which was N44.34 billion.
“All in all it was a very strong year. So in terms of the earnings highlights, there was also the impact of foreign currency positions on exchange rate devaluation.
“The headline numbers for profits for 2020 was N160 billion, but if you take out about N51 billion that came from foreign currency positions and devaluations, the core earning was about N108.9 billion. So, it’s quite strong and more than three times what we did in 2019,” Orji stated during the interview.
Listing the investments by the authority, he mentioned that the Future Generations Fund had four categories which include public equities in which the NSIA has investments in Japan, United States, across Europe and in China.
The second category, he stated, is the hedge fund strategy, which includes micro to long-term equities and credit, adding that the organisation also has exposure in private equity across Nigeria and investments in healthcare, aircraft leasing companies, among others.
He predicted a broader recovery for the equity side of the investments this year, explaining that although stock market growth in 2020 was largely anchored on technology, he expects 2021 to be driven by aviation and the industrial sectors as the world opens up again.
Uche stated that fixed income should be closely watched by investors, except for the impact of inflation which he predicted would make interest rates go up and make fixed income instruments fall.
“My view is that on the balance of risk , we are more likely to see interest rates go up than go down,” the NSIA boss added, noting that venture capitalist funds were also being explored by the organisation.
“On the average we had almost 30 per cent returns in dollar terms and we are going to be more aggressive in venture capital,” he noted.
Uche emphasised that the NSIA was also investing in fintech , software services, data networking as well as biotech and pharmaceuticals, which he noted the authority made quite some money from.
On infrastructure, the NSIA MD pointed out that the organisation was participating through six areas, including agriculture with the fertiliser programme, roads and financial market infrastructure, with NSIA currently one of the largest investors in the country’s infrastructure financing ecosystem.
In terms of healthcare, Orji further mentioned that the authority was intervening in the diagnostics and radiology centres in Kano and Umuahia and the cancer centres at the Lagos Nigeria University Teaching Hospital (LUTH)
He further stressed that the NSIA was in discussions with the University College London, to develop pharmaceutical industries in the country.
On the Abacha loot, he stated: “The Abacha fund was $311 million that was returned to Nigeria by the US Department of Justice and Island of Jersey and the agreement was to spread the money in equal measures across three projects.
“These are the Lagos-Ibadan road, Abuja-Kano road and the Second Niger Bridge. Each of them will get $103million-$104 million. To spend the money we have been required to have external auditors aside our in-house auditors as Deloitte to monitor the disbursement of that fund.
“A civil society group, CLEEN foundation has been appointed by the ministry of justice and also with the US government to also supervise the disbursement of the fund. So, you can imagine that every single pair of eyes possible are overlooking how these funds will be disbursed.
“The fund is still there intact. Not a dime has been spent. It is being held in our accounts with the central bank,” he stated.
He added that another €4.2 was being expected to be repatriated, which the authorities have agreed should come to the NSIA to be used for the three projects, but noted that additional funds will be raised next year from Sukuk before the handover of the projects can be effected.
Orji said the NSIA was partnering the ministry of works as well as the contractors handling the three mega projects to ensure they are promptly completed, with the Lagos-Ibadan expressway scheduled for inauguration before 2022 ending and the bridge slated for decking by December after Covid-19 disruptions earlier.
He stated that a huge portion of the Lagos-Ibadan expressway funding will be reclaimed since the road will be tolled.