Nigeria’s sovereign fund to pivot to asset management, CEO says

Nigeria’s Sovereign Investment Authority (NSIA) is seeking to take over underperforming government assets, including a power plant, as it transitions into an asset management firm, CEO Uche Orji said. “We are looking at many industrial projects and government-owned enterprises that are either moribund or not performing sub-optimally,” Orji told Reuters on the sidelines of the launch of Africa Sovereign Investors Forum (ASIF) by nine funds. NSIA’s growth strategy was to take these assets and revitalise them, he said.

Orji cited “advanced discussions” with the government to take over a power plant that was 85% complete “but required a bit of capital to finish it”. Orji noted that imported inflationary pressures and the COVID-19 pandemic meant that the government would have to allocate significant resources to social spending that may affect capital increases for the fund. “2022 will be very challenging… Equities are down but hedge funds are up,” he said. NSIA had “a lot of cash” to take advantage of the opportunities that existed in the equity market, he said. “But we will wait for it to bottom first.”

The market was still fraught with downside risk because the battle against inflation had “just begun”, he said. To help curb inflation, NSIA invested in soil nutrient supply to increase agricultural output and help lower prices. It has maintained potash imports from Russia and partnered with Morocco’s phosphates and soil nutrient producer OCP to build a $1.3 billion ammonia and fertiliser plant.

“We are now in the process of selecting engineering, procurement and construction companies” for the plant that would be ready in three years, he said. Morocco and Nigeria in 2016 also announced their ambition to build an onshore offshore gas pipeline. “We are waiting for developers of that project to show us the terms and we will consider making an investment,” he said. A Moroccan official from hydrocarbons agency ONHYM said in April feasibility studies for the pipeline and passage deals were expected to be completed no earlier than 2027.