Nigeria’s quest to build a pool of wealth as savings for future generation and enhanced economic development has received a major boost from the Nigerian Sovereign Investment Authority (NSIA) which grew its total assets by five percent to N650 billion while generating N36 billion as income in the financial year ended December 31, 2019.
The 2019 financial year was also marked increased deployment of funds by the NSIA to support major infrastructure projects across the country as well as delivery of game-changing projects in the health and agricultural sectors.
Created in 2011 through the Nigeria Sovereign Investment Authority Act, the NSIA (or Authority) was set up as an investment institution of the Federation to manage funds in excess of budgeted oil revenues. As a Fund, the NSIA invests in real and financial assets including stocks, bonds, real estate as well as alternative investments such as private equity funds or hedge funds.
For these investment purposes, the NSIA established three main funds: the Stabilisation Fund, the Future Generations Fund and the Nigeria Infrastructure Fund.
The Stabilisation Fund is to provide budget support in times of economic stress; the Future Generations Fund is an inter-generational savings fund for future generations of Nigerians and the Nigeria Infrastructure Fund is to invest in domestic infrastructure.
The audited financial statements of the NSIA for the year ended 2019 showed that Interest Income rose by 13 percent to N27.02 billion in 2019 from N23.82 billion in 2018. This performance was driven by the Authority’s strategy to generate fixed income returns from securities that generate predictable interest, and steady returns including Eurobonds, Treasury bills and other secured deposits.
The NSIA also recorded Total Income of N36.15 billion in 2019, down by 18 percent from N44.34 billion in 2018. The decline was induced by a 93 percent fall in foreign exchange revaluation income to N1.28 billion in 2019 from N18.05 billion in 2018. Excluding foreign exchange gain, the net income in 2019 was N34.87 billion, up by 34 percent from N26.28 billion in 2018
The financial statements also showed that the Authority recorded a five (5) percent growth in Total Assets, which rose to N649.84 billion in 2019 from N617.70 billion in the previous year.
Speaking on the performance of the NSIA, 2019, Managing Director/Chief Executive Officer, Uche Orji, said: “2019 was a mostly favourable year for the Authority. In the first instance, our diversified asset strategy was buoyed by positive returns from the international markets as almost all the investments made in equities, hedge funds and private equity outperformed.