We’re Quiting Fertilizer Blending Sector – NSIA Boss

• Attributes move to positive transformation
• Says global tariff war won’t affect operations 

BY COBHAM NSA – With the success achieved in growing operational blending plants in Nigeria from just four in 2017 to over 90, the Nigeria Sovereign Investment Authority (NSIA) says it is now time to withdraw its direct involvement in the nation’s fertilizer blending sector.

This is as the Authority also showed off its audited financial results for the year 2024 indicating an outstanding 96 percent growth in net assets.

Speaking at the Media Engagement on NSIA’s 2024 Earnings Presentation, the Managing Director and Chief Executive Officer, Mr Aminu Umar-Sadiq, also assured that the current global economic volatility occasioned by tariff war will not have a negative impact on its operations.

While attributing NSIA’s exit plan from the fertilizer sector to the significant increase in blending capacity, coupled with the Central Bank of Nigeria (CBN)’s removal of the foreign exchange ban on fertilizer imports, Umar-Sadiq said the development has created a liberalized and dynamic sector that no longer requires direct intervention from the Authority.

The NSIA boss explained thus; “Because we have gone from four operating blending plants to over 90 today, is to say, particularly with the CBN Governor removing the FX ban on the importation of imports, to say it’s now a liberalised sector with active, buoyant players, NSIA is actually no longer needed”.

He said the eight-year plan initiated to revitalize the blending space has achieved its objective, adding; “The expectation is that by next year we are out. And I want to suggest that His Excellency, President Bola Ahmed Tinubu, is also aligned with that, and to the extent that there is no shock in the system, we’ll be looking at, over the next two to three years, to actually fully transition out of the sector.”

Detailing the Authority’s strategic approach since the programme commenced in 2017, the Managing Director said; “What was important and what was crucial in terms of that business model was to ensure that the focus, the objective was to resource-take the sector so that the blending plants are actually dependent. It was not to sustain NSIA’s continued engagement, continued intervention in the sector.”

He further explained that NSIA “undertook the responsibility of procuring all raw materials, managing transportation to blending plants, paying the plants for blending services, and then selling the finished fertilizer”, adding; “Over time, as the blending plants developed a track record of cash flows, NSIA gradually reduced its direct involvement.

“This transition involved enabling the blenders to access bank guarantees for raw material purchases and eventually manage their own transportation and procurement of urea and limestone, with NSIA’s role limited to importing phosphate and potash.

“The ultimate goal is for these blending plants to become fully capable of sourcing all inputs independently, allowing NSIA to exit the sector entirely within the next two to three years.”

On the Authority’s excellent financial performance, Mr. Umar-Sadiq disclosed that a total of $1.82 billion in net has been received as Government Contributions since its inception, noting that the amount has been efficiently utilized, resulting in a Net Asset Value (NAV) of $2.84 billion (N4.354 trillion) as of December 2024.

“For over a decade, NSIA has successfully executed more than 150 investments in a wide range of projects across the African continent, demonstrating its commitment to driving economic development throughout the region.”

“Over $500 million committed in domestic infrastructure; Catalyzed over $1billion in third-party investment; Robust infrastructure investment portfolio across key sectors such as Agriculture, Healthcare and Power; Invested in over 50% of locally owned and run private equity (PE) funds; Operating Income N1,853.8; Profits After Tax 1,886.4; Total Comprehensive Income (TCI) N1,885.6; Return on Average Assets (RoAa) 12.2%; Return on Average Equity (RoAe) 12.4%.”

Also attributing the impressive surge in net assets to strong resilience and strategic positioning that has helped the country weather ongoing uncertainties in the global economic landscape, he said NSIA’s Net assets as of December 2024 stood at a towering N4.35 trillion, nearly double the N2.22 trillion recorded in 2023, driven primarily by a diversified revenue base, gains from foreign exchange movements, and a strong infrastructure portfolio.

“This indicates 12 consecutive years of profitability for the NSIA, with cumulative retained earnings now reaching N3.74 trillion as at the end of 2024.”

Similarly, its operating profit, excluding joint ventures and associates, grew from N1.17 trillion in 2023 to N1.86 trillion in 2024; a combination of this with profits from joint ventures and associate entities puts the Authority’s total comprehensive income at N1.89 trillion, a 59 percent jump from the previous year.

He also addressed concerns about the potential impacts of the United States’ new policies under President Donald Trump, saying that NSIA’s defensive strategic asset allocation within its stabilization and future generations funds, including investments in private equity, hedge funds, real estate, and inflation-linked funds.

According to him, the strategy seeks to provide downside protection and stable income growth, that align with NSIA’s primary mandate as a savings fund.

The NSIA Chief Executive further said; “The first thing to say is that if you look at our strategic asset allocation on the stabilisation and the future generations fund side, you’ll see it is defensive.”

“We have allocations to private equity, we have allocations to hedge funds, we have allocations to real estate, inflation-linked funds. And so, whilst on the upside, when the markets are roaring, we may not be fully optimising. What it does is that it protects us on the downside, which is very, very important, because if you look at the mandate of our sovereign wealth fund, it is largely a savings mandate.”

“And so, irrespective, as I mentioned earlier, of the ongoing macro side, based on our strategic asset allocation on the stabilisation and future generations fund side, you will see stable income growth.”

On fundraising initiatives, he said the NSIA acts a catalyst, conceptualizing and initiating projects that attract further investment, while citing the Financial Guarantor that rose from $25 million to over $300 million in attracted capital, and ongoing efforts by NMRC and MedServe to secure significant investments.

He reported that NSIA has committed approximately $500 million across its projects and attracted just over $1 billion in third-party capital.