The Nigeria Sovereign Investment Authority (NSIA), manager of Nigeria’s sovereign wealth funds, has grown its profit for the 2016 financial year by 1007 per cent to N130.38 billion, stimulated by gains in foreign exchange.
Net foreign exchange gains spiked 962 per cent from N8.74 billion in 2015 to N92.80 billion in 2016.
Analysts say the NSIA funds benefitted from weakened Naira in the year as the Nigerian currency was devalued 108 per cent, exchanging at close to N408 naira to the US dollar as at the end of the year compared to N196.5 that it exchanged to the dollar at the beginning of the year.
The Authority’s profits benefitted from its multi-asset strategy for global foreign currency-denominated instruments, and increased allocation to dollar-denominated assets.
NSIA said in a release to announce the 2016 financial performance that the Future Generation Fund adopted a multi asset strategy and therefore invested in a diversified portfolio of growth assets across global public equities, private equity, hedge funds and ‘other diversifiers’.
“The (Stabilisation) Fund has a short time horizon and invests in conservative fixed income mandates,” said the release.
“In the period, allocation to the US Treasuries was increased with the intent of benefiting from predictable return streams. The rest of the capital continues to be invested in cash management products with ‘A’ rated international financial institutions.”
Total comprehensive income rose 469 per cent to N149.83 billion; total assets grew 97 per cent to N420.93 billion. Nigerian Government contributed additional 49.13 billion to the NSIA, bringing total contribution to N204.38 billion as at year-ended December 31 2016.
The Authority said in the release that it plans to activate the country’s commodity value chain to promote investment activities in storage, grading of products, and transparent pricing.
“The NSIA is considering an investment of up to N3.05 billion ($10 million) to revitalize and enhance the value and viability of the Abuja Commodity Exchange (NCX) in readiness for the envisaged privatization by the Bureau of Public Enterprise (BPE),” the released said.
Net gain on financial assets and other income soared to N28.41 billion as against just N38.40 million the previous year. Investment and interest income climbed 104 per cent N11.90 million versus N5.82 billion the previous year.
INNOCENT UNAH
