News - July 18, 2019

How Nigeria’s wealth agency invests its capital, says MD

MEDIATRACNET

The Nigeria Sovereign Investment Authority (NSIA) invested its $1.5billion seed capital in the development of key infrastructures to create wealth and grow the economy, the Managing Director, Uche Orji said.

From the initial $1.2billion capital provided by the Federal Government at inception in 2012, Mr Orji said the only additional monies the agency received were from the present administration in 2015 and 2016.

“We (NSIA) did not receive any other money until the end of 2015 when another $250million was brought by the current government,” Mr Orji told PREMIUM TIMES Editors during his visit to the newspaper in Abuja.

“Another $250million was released a few months later (in 2016), bringing the total to $1.5 billion. About $2million earned before taking over the Fund was used to start the company’s operations,” he added.

Investments in three mandate Funds

He said the initial capital was invested in three of its mandate Funds, namely Stabilization Fund, Future Generations Fund, and Nigeria Infrastructure Fund in the ratio 20:40:40 respectively.

The Stabilization Fund, he said, was short-term investments in Treasury bills and money market instruments outside the country.

The Fund, Mr Orji said, is always available for the government to draw from to meet the need to stabilize the economy. He said the government has never drawn from the Fund before.

Also, he said the Future Generations Fund consists of investments in private and public international equity markets aimed at earning long-term returns for the future generations of Nigerians.

For the Nigeria Infrastructure Fund, he NSIA MD said it is solely dedicated to co-develop and invest in infrastructures like toll roads/motorways, power, healthcare, agriculture and more recently gas commercialization.

Other areas the NSIA deploys the Fund include development of free trade zones, aviation, water/sewage, gas pipeline, storage facilities, mining, refineries, real estates, ports, railways, communications, and those the agency does not have the technical expertise.

In the last two years, Mr Orji said the NSIA’s investments in infrastructure has grown so rapidly th company is considering moving from a single entity into a group structure.

He said the Board of the company has already approved a five-year development plan, beginning this year, to strengthen its internal processes for sustainable growth and investment.

“A holding company and group structure will accommodate our rapidly expanding and growing investments and operations,

“Suddenly NSIA has grown from not having so many operating groups to having so many operating groups,” Mr Orji told the Editor-In-Chief, Musikilu Mojeed and the Managing Editor, Idris Akinbajo.

“So, we have to create a holding company and a group structure. NSIA has so many operating entities now,” he added.

Achievements in Infrastructure development

In addition to managing its capital, the NSIA MD said the agency is also managing funds on behalf of the federal government.

Apart from the $650million Presidential Infrastructure Development Fund for the construction of the Lagos-Ibadan road, the Second Niger Bridge and the Abuja-Kano road projects, Mr Orji said the NSIA also built three healthcare facilities.

The health facilities include one cancer centre at the Lagos University Teaching Hospital (LUTH) and two diagnostic centres in Kano and Umuahia.

Although the cancer centre is already operational, the other facilities are currently hiring workers ahead of the planned commissioning by August or September.

He said the agency has also developed about 33 hospitals across the country and partnered with UFF-NAIC Agriculture Fund to invest in agriculture.

The Fund is a joint venture by the NSIA and UFF Agri Investment, an Old Mutual Specialist Fund that supports agricultural development.

Other investments include the acquisition of a farm in Nasarawa State, a 50-50 joint venture integrated feed mill, creation of Infra-Credit, an infrastructure credit guarantee company.

The NSIA runs the company in partnership with GuarantCo, a private Infrastructure Development Group company, now taking extra capital from other investors.

He said another joint venture investment being expected is from KFW of German, in addition to an ammonia plant the NSIA is establishing along with OCB of Morocco as part of its fertilizer development programme.

Mr Orji said the NSIA is currently running the Presidential Fertilizer Initiative (PFI), under which 22 fertilizer blending plants were rehabilitated.

Currently, he said the plants have been producing fertilizers sold to the public at about N5,500 per bag across the country.

“So much is going on. The NSIA has now grown from a single entity into a group structure. NSIA has so many operating entities now.

“By the end of the year, the number would have grown to eight or nine, in addition to other companies it has substantial shareholdings,” the MD said.

According to him, the key objective of the Holding Company’s subsidiary structure is to ensure there are Group Human Resources as well as investment policies across the board.

Co-investment, development Funds coming

He said the NSIA will create a co-investment and project development funds, to allow others to be invited to co-invest with the company.

“From next year, NSIA expects to see these co-investment funds become active. More capital will come from other people into NSIA agricultural joint venture. Another capital commitment is coming to the healthcare fund.

“Next year, NSIA hopes to host an Investment Submit, where all partners will be invited to Nigeria to show them the opportunities available.

“This year (2019) is about tightening the screws to ensure the organization is fit for purpose and ready for the next phase of growth, doing bigger businesses with other people as co-players,” he said.

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