The Nigeria Sovereign Investment Authority is restructuring its portfolio to focus more on domestic investments after a drop in the currency wiped out foreign-exchange gains last year.
“The asset allocation strategy of NSIA has been restructured to reflect an increased focus on domestic infrastructure investments with 50 percent of future contributions to be dedicated to infrastructure,” according to a statement on Monday from the fund.
The agency’s total comprehensive income dwindled from N149.83 billion in 2016 to N27.93 billion in 2017, according to operational results unveiled by its managing director, Mr. Uche Orji .
A decline of N107.8 billion in profit from N130.37 billion in 2016 to N22.55 billion was recorded in 2017.
Orji blamed the decline on the currency management policy of the Federal Government.
“The decline of the net foreign exchange gains, which accounted for the reduced net operating income recorded in 2017, was as a result of the government’s currency management policies, which were aimed at stabilising and reflecting the naira’s real value in 2016.
“To this effect, the naira weakened in value from 196/$ to 305/$ in 2016.
“Considering that at the end of that year, about 80 cent of the authority’s assets under management were denominated in the United States dollar, the devaluation resulted in the recognition of significant exchange gains in the authority’s naira books at the close of the year.”
He also said that the delay in inaugurating the NSIA board led to a lag in re-investment of matured funds, which affected profitability.
However, he stated that despite the drop in profitability, the NSIA had decided to increase its level of funding of infrastructure development.
To achieve this objective, Orji said the asset allocation strategy of the NSIA had been restructured to reflect an increased focus on domestic infrastructure investment.