Nigeria’s sovereign ​wealth ​fund gets global rating

The Nigeria Sovereign Investment Authority ​has been ranked second out of 51 global sovereign wealth funds under the Sovereign Wealth Fund Institute transparency index ranking for 2014.

The new ranking​,​ published recently​,​ showed the Authority upgraded from four points to nine out of a possible ten during the second quarter of 2014, making it the only African Fund to be so ranked.

Managing Director/CEO of the Authority, Uche Orji, who was presenting extracts of the 2014 financial result and performance in Abuja, said the new rating leapt NSIA from global joint 33rd to global joint 2nd out of 51 Sovereign Wealth Funds ranked by the Sovereign Wealth Fund Institute.

Mr. Orji expressed surprise with the rating, saying considering the young age of NSIA, the recognition may have come as a result of its commitment to Santiago principles on independence, openness, transparency in all its operations, including letting its stakeholders know what was happening in the business.

“Our responsibility is to keep the investments safe and keeping Nigerians informed about what is going on. Many people see this as a mark of transparency,” Mr. Orji said.

‘We have decided to be as open and transparent as possible with our shareholders. If it impresses somebody and we are recognized with a ranking, great. But, that’s not what we work towards, rather to ensure that at any point in time the people know where their money is being invested,” he said.

Highlights of the financial results for the period ended December 31, 2014, Mr. Orji said, showed net income growing by over 3,024 per cent from N505.7million to N15.8 billion, while total revenues grew by 267 per cent from N1.96billion to N7.2 billion.

Though Mr, Orji said the full report would be published in the next couple of months, he also reported a significant change in the fair value of assets, which rose to about N10.5billion as opposed to a loss of N19.5 million in 2013.

He said investment securities also grew 161.6 per cent from N45.1 billion to N118billion, while borrowing which stood at N1.4billion in 2013 were fully liquidated, with the Authority investing N13.6billion in subsidiaries and associates during the year under review.

Two of the subsidiaries – NSIA Motorways Investment Company and KG Brussels – he said, were consolidated in the books along with a stake in the Nigeria Mortgage Refinancing Company.

Mr. Orji said the Authority’s strong financial performance came primarily from investments in secondary interests by private equity, developed market-long only equities and absolute return hedge fund investments.

This, he said, was complimented by a long dollar currency position recorded against significant headwinds generated by sustained global financial crisis, weak demand, rapidly declining oil prices and a turbulent local operating environment.

Ongoing projects during the year were under Future Generations, Stabilisation and Nigeria Infrastructure Funds as well as Gas-to-power investments.

For 2015 projects, Mr. Orji said the Authority would take a lot more active role in domestic investments in power, healthcare, agriculture and other social infrastructure as part of the overall strategy to impact the lives of the people.

At the moment, he said the Authority was developing a social infrastructure strategy that would focus on rural healthcare, education, environmental protection, where impact, rather than commercial returns would remain the primary considerations.

“We will take off immediately we are able to define how the Authority would make an instant impact and able to attract co-investment to the projects,” he said.

Under the healthcare sector, he said NSIA’s healthcare investment subsidiary, NSIA Healthcare Investment and Development Company Limited, had entered a joint development agreement with one of the country’s teaching hospitals to establish an ultramodern tertiary specialist hospital to undertake advance surgery and medical care.

On agriculture, he said NSIA was co-funding agriculture alongside the Federal Ministry of Agriculture and Rural Development and KjW of Germany, a development bank, to fund affordable long-term capital and technical assistance solutions for the development of commercially viable small and medium enterprises in the sector.

About $40 million of the Nigeria infrastructure fund, he said has been set aside for investment opportunities in the real estate sector, securities assets and power sector of the economy.