The Nigeria Sovereign Investment Authority (NSIA) is an agency of the Federal Government set up to manage surplus income from budgeted oil revenues. As the manager of Nigeria’s sovereign wealth fund, NSIA had over $2 billion assets under management at the end of 2018. Uche Orji, Managing Director and CEO of NSIA, says that strategic alliances and partnerships is a strategic priority to achieve the Authority’s growth objectives.
Over the years, NSIA has increased its focus on domestic infrastructure projects in agriculture, healthcare and infrastructure enabling financial institutions via the activities of its three strategic funds1 . “We are looking to expand our presence in other sectors in infrastructure,” Orji says. “Over the next three years, we aim to complete three major transport infrastructure projects – the Abuja-Kano highway, Second Niger bridge and the Lagos-Ibadan road projects. Investments in all three projects add up to more than ₦500 billion.
“We also see an aggressive increase in healthcare investments in the next three years. The Lagos University Teaching Hospital Cancer Treatment Centre is already operational. Two other advanced diagnostic centres in Kano and Umuahia are also slated for commissioning 2019.
“Once we have all these projects operational, we see ourselves significantly expanding to several other projects during the rest of 2019 and in 2020.”
Orji believes that a strategy of collaboration with third parties will be critical for success with the anticipated growth in NSIA’s investments. “In the agriculture space, we have started to make some aggressive investments following a 50/50 partnership with South Africa’s UFF Agri-Fund, backed by Old Mutual. We also have a joint venture with OCP Morocco to invest in an ammonia plant, and we plan to do more.
“InfraCredit has been a major example of the success of our alliances. We started with the Private Infrastructure Development Group and GuarantCo as co-investors, and recently the Africa Finance Corporation and KfW have also come on board as investors.”
As NSIA expands its infrastructure investments over the next three years, there are major hurdles to be navigated to ensure attainment of its growth objectives. Orji throws more light on these. “Our business is one where we depend on the growth in oil revenues in order to grow our assets under management. So, the top three risks we see are the pricing, reinvestment and environment risks. The environmental risks are mainly around insecurity.
“The pricing risk is essentially driven by the macroeconomic environment. We are not seeing as much investments in the country as needed, and this poses a risk for our business.”
Orji believes that resolving other key infrastructure constraints will spur growth in the sector and the larger economy. “For businesses to continue to grow in this country, infrastructure related to trade and production needs to be a priority area for investment,” he says. “The investments being made in rail is fantastic and linking that with the ports will go on to accelerate growth.”
Throughout this document, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.
The views and opinions expressed herein are those of the interviewees and survey respondents and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm. KPMG’s involvement is not an endorsement, sponsorship or implied backing of any company’s products or services.