Nigeria Sovereign Investment Authority to raise equity capital & sell sukuk bond

The Nigeria Sovereign Investment Authority (NSIA) has announced plans to raise equity capital and sell Sukuk bonds this year. As one of the largest and most well-funded sovereign wealth funds in Africa, the NSIA aims to invest $50 million in equity to fund technology infrastructure projects. Victor Aluye, the Head of Portfolio Management at Comercio Partners, joined CNBC Africa to discuss the implications of these developments and other key headlines in the Nigerian financial landscape. The NSIA, originally established to manage Nigeria's oil savings, has evolved into a critical player in development finance, supporting various sectors of the economy. Despite its significant contributions, the agency often flies under the radar. However, Aluye commended the NSIA for its stellar performance and its commitment to fulfilling its core mandate of providing stabilization, future generations fund, and infrastructure funding. The NSIA's foray into the capital markets with plans to issue Sukuk bonds demonstrates a strategic move to tap into the strong appetite for this class of bonds among investors. The Nigerian government's successful Sukuk issuances in recent years have shown the market's enthusiasm for such investments. By leveraging Sukuk bonds, the NSIA aims to raise affordable funding to bridge the infrastructure gap in Nigeria. Amidst its remarkable growth, the NSIA recorded a whopping 303% improvement in comprehensive income in 2020, raising expectations for its performance in the coming years. Additionally, Aluye discussed the World Bank's report on diaspora remittances, highlighting Nigeria's significant contribution to the total remittance flows. While the COVID-19 pandemic and exchange rate challenges led to a decline in remittances, Aluye emphasized the importance of creating a conducive policy environment to support the inflow of remittances and boost Nigeria's foreign exchange reserves. Lastly, Aluye analyzed NNPC's crude-for-fuel swaps deal with 16 consortia as a strategic move to address local fuel supply shortages. With Nigeria's refining challenges persisting, the NNPC's arrangement seeks to ensure a steady supply of petroleum products by engaging foreign and local firms in the swap deal. Aluye underscored the critical role of such agreements in stabilizing Nigeria's fuel supply and mitigating scarcity risks. Overall, the NSIA's initiatives to raise equity capital and issue Sukuk bonds reflect a proactive approach to infrastructure development and economic growth in Nigeria. As the agency continues to expand its investment portfolio, stakeholders anticipate a positive trajectory in Nigeria's financial landscape.