The Nigeria Sovereign Investment Authority (NSIA) recorded a profit of about N36.15 billion from its investments in the 2019 financial year but fears worse returns this year due to the impact of the COVID-19 pandemic on its markets.
The figure is also 18.47 per cent lower than the N44.34 billion profits it realised in the previous year.
The Managing Director of the agency, Uche Orji, disclosed this while presenting the annual audited financial statement and account for the year.
Excluding foreign exchange gain of N18 billion realised in 2018 and N1.28 billion in 2019, the net income during the year stood at about N34.87billion, compared to N26.28bn in 2018.
Mr Orji, who briefed journalists on the activities of the agency in 2019, said the manager of Nigeria’s sovereign wealth fund also grew its asset base to over N649.84 billion, about five per cent higher than about N617.70 billion recorded in 2018.
He said the agency’s asset allocation strategy remained stable at 25 per cent across the various funds under its management, namely Future Generations fund of public and private equities as well as absolute returns and other diversifiers.
Describing 2019 as a most favourable year for the agency, Mr Orji said it diversified asset investments in equities, hedge funds and private equities in the international markets yielding positive returns.
He said domestic developments also favoured its strategy in infrastructure investment to deliver value to the Nigerian people as more capital was deployed into key projects.
Highlighting NSIA’s activities and performance during the year, Mr Orji said its areas of focus for the Nigeria Infrastructure Fund remained agriculture, healthcare, power, toll roads and gas Industrialisation.
During the year, he said the NSIA closed key transactions and increased capital deployments on domestic infrastructure projects, specifically in motorways, agriculture, healthcare, and power.
Some of the completed projects include the Cancer Centre at Lagos University Teaching Hospital (NLCC) in May; and the Advanced Diagnostic Centre located in Aminu Kano University Teaching Hospital in February.
Other projects in the health sector include the completion of civil and construction works at the Advanced Diagnostic Centre in Federal Medical Centre Umuahia (FMCU).
On the Presidential Fertiliser Initiative (PFI), Mr Orji said about 6.5 million 50kg bags of NPK 20:10:10 fertiliser was delivered to farmers across the country during the year, bringing total deliveries since the inception of the initiative to 20 million bags.
He, however, lamented that the COVID-19 pandemic affected the timely delivery of the fertilisers, particularly as a result of the unscheduled shutdown of the Indorama plant following the outbreak of the coronavirus in the area.
Regardless, he said the NSIA increased the number of accredited participating blending plants to 31 by year-end 2019, from 18 plants in 2018.
This, he said, allowed the creation of significant direct and indirect jobs across the agriculture value chain, including in logistics, ports, bagging, rail, industrial warehousing, and haulage touchpoints, amongst others
On the activities of the Presidential Infrastructure Development Fund (PIDF), the NSIA boss said as of year-end 2019, about ₦181.9 billion was deployed across all three projects under the fund, namely the 2nd Niger Bridge, Lagos – Ibadan Expressway and Abuja-Zaria-Kaduna-Kano Road.
He reported significant progress on the projects in terms of construction works ahead of their completion deadline in 2022 despite the impact of COVID-19.
A review of asset under management, he said, showed NSIA’s core capital stood at about $1.5 billion as of year-end 2019, following the receipt of an additional capital contribution of $250 million approved by National Economic Council in April 2020.
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The update on other third-party managed funds include the Nigeria Stabilization Fund having a balance of N33.365 billion from about N20.814 billion in the corresponding period in 2018.
On the outlook for 2020, Mr Orji said the COVID-19 pandemic caused an unprecedented human and health crisis with significant impact on global markets.
Consequently, he said, it would be difficult to predict the market’s overall reaction to development, adding that what was predictable was that the volatility introduced by the onset of the pandemic may linger.
He said the NSIA would continue to monitor the market conditions with the view to leveraging the upside risks in the market.
“We expect that our investment strategy will continue to deliver positive returns in the long term in 2020 as the markets normalise and new opportunities emerge.
“We will continue to focus on Agriculture, Healthcare (including Pharmaceuticals), Toll Roads, Gas industrialization and Power in our Infrastructure Funds.
“Operationalising several subsidiaries of the NSIA will be a key focus especially in the healthcare sector where we have several projects in the pipeline,” he said.