Nigeria Sovereign Wealth Fund’s assets grew by 33.3% in 2020

…Company income tax increased to N392b in Q1-2021 – NBS

NIGERIA Sovereign Investment Authority (NSIA) yesterday said it recorded strong performance in 2020 by posting over 33.3 per cent in its assets.

  The fund also expressed its delight for recording such growth despite the bad turns of national economy because of the pandemic.

  A release on its website said that “while total assets in the three funds grew by 33.3 per cent to N772.8 billion ($2 billion), total comprehensive income was N160.1 billion up from N36.2 billion in 2019.”

  Also, the post showed that “asset allocation strategy for NSIA is 50 per cent in Nigeria Infrastructure Fund, while 30 per cent was recorded in Future Generations Fund and 20 per cent in Stabilisation Fund. But the growth was achieved despite a $150 million withdrawal from the Stabilisation Fund by Federal Government of Nigeria. The fund performed well, despite low interest rates.”

  Continuing, the Fund said that “Stabilisation Fund is invested in fixed-income assets, mainly short-term bonds. As of December 31,  about 21 per cent of the fund was invested in a portfolio of hedging assets, mainly U.S. Treasuries tracking the Bloomberg Barclays 1-3 Year U.S. Treasury Bond index. The remainder of the portfolio is composed of growth assets, invested in short-duration U.S. corporate credit, asset-backed securities and other fixed-income securities.

NSIA executives also maintained some exposure to derivatives for downside protection. In 2020, therefore, Future Generations Fund significantly changed its asset allocation, completely changed and expanded its hedge fund manager roster, made commitments to venture capital managers, and made co-investments in equities alongside venture capital and private equity managers. Venture capital allocations gained 29 percent in dollar-terms, hedge funds were up by 11 per cent, emerging market long-only equity managers gained 22 percent among other benchmarks.”

  It will be recalled that NSIA oversees three individual sovereign wealth funds: the Future Generations Fund, the Nigeria Infrastructure Fund and the Stabilisation Fund.

  Similarly, National Bureau of Statistics (NBS) says Nigeria generated about N392.77 billion from Company Income Tax (CIT) in the first quartre (Q1) of 2021.

  This is contained in NBS recent report on ‘Company Income Tax by Sectors (Q1 2021)’ which was released yesterday.

  According to the report, Q1 2021 CIT revenue represents an increase of 32.82 per cent (N97.05 billion) as against the N295.72 billion generated in the fourth quartre (Q4) of 2020.

  By sector, top contributors of CIT in Q1 2021 were breweries, bottling and beverages with N23.26 billion; professional services including telecoms with N18.17 billion; and state ministries and parastatals generated N17.35 billion.

  The sectors that generated the least amount of CIT were textile and garment industry with N13.49 million; mining (N34.40 million); and automobiles and assemblies (N73.57 million).

  For CIT generated quarter-on-quarter, Q1 2015 revenue was N170.17 billion; Q1 2016 CIT declined by 1.95 percent to N166.86 billion; Q1 2017 revenue increased to N155.96 billion; Q1 2018 had N203.69 billion; Q1 2019 revenue was N232.81.

  Meanwhile, Q1 2021 CIT revenue likewise represents an increase of 32.84 per cent as against the N295.68 billion generated in Q1 2020.

  It will be recalled that CIT is a tax on the profits of incorporated entities in Nigeria, it also includes the tax on the profits of non-resident companies carrying on business in Nigeria.