After over nine years as the Chief Executive Officer and Managing Director at the Nigerian Sovereign Investment Authority, Mr. Uche Orji is spending his last “less than a year in office”, reflecting on the journey so far. With his manifestly progressive and brilliant mind, he definitely needs no one’s validation about his successes and the obvious room for improvement in the management of the nation’s sovereign wealth fund, an initiative of the government of the federation, into which surplus income produced from the nation’s excess oil reserves, is deposited. The NSIA as an idea, was brought into the force of law to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations. With an initial US$1 billion in seed capital, NSIA, on the watch of Orji, has grown in leaps and bounds, evidenced by its interventions, not just in savings, but in many of its critical interventions across the country. Thus, taking THISDAY on a short trip of the situation report, Orji is confident that with the structure he’s put in place, “The Authority” as the NSIA is otherwise called, would survive many generations to come. Excerpts:
It’s been nine years since you started work at the NSIA. What has the journey been like and have you been able to marry your goals and objectives with the results so far?
Yes, to some extent. I will say on a scale of 1 to 10, we are not at 10 of course. There have been many things that have disrupted the plans, but in the main, I think we are executing two plans. I would like to describe this by looking at things that are still not yet done, vis-a-vis the things that were done. But before we even do that, let us assess the objective. When the NSIA started, many of you would remember, it was born in controversy. There were issues as to whether it was legal or not legal; whether it would survive or not survive and it was a topic in the newspapers every single day at the beginning and even today, there are still issues around the legislation that are still controversial. But at that point, we set our goal that the organisation would survive or fail based on its investment performance and its impact.
No doubt, today, we have a clear strategy of what we really wanted to accomplish. That was number one. Number two, we also believed the organisation would gain credibility, not by being everywhere talking all the time, but by actually showing than telling, that you need to show what you have done, then, you can talk about it, because Nigerians are tired of propaganda. They are tired of just being told tales. We needed to also earn global respect through accountability and transparency and change the narrative around the public sector in the country. We needed to attract smart people and build a small and effective organisation. So these were some of the clear goals we set out in terms of what I would want to call broad organising principles as to what it was going to take to stabilise and build the organisation. And once those foundational factors were dealt with, then, you can now grow the organisation.
And I think on those core organisational structures, we have been able to achieve them. We have a lot of smart people and we have built, to some extent, an organisation that is seen in some ways as internationally transparent and credible. On the Sovereign Wealth Fund (SWF) institute ranking of internationally transparent and accountable organisations, we are in the second quartile, which is not a bad place to be for a Nigerian entity. Actually we are in the top bracket of the second quartile by scoring. I think we have also shown performance in the period we have invested. I cannot think of any quarter that we have lost money, we have been consistently profitable through the years. And then, in terms of impact, you have seen our footprint in agriculture, road infrastructure, to healthcare, to financial servicing infrastructure companies, to more recently now, to social impact like education.
So, there is a lot of impact in my opinion. Let us also be mindful of the fact that we don’t have a huge capital base but there are enough seeds and enough direction of the strategy for people to start to feel confident and comfortable about what the organisation can become. If you want to ask me that question again in another five years, I am given to looking at what has not yet been done but it is also important to also acknowledge that in the main, we have put all what is required in place for the organisation to now thrive.
From that corner, your agency is supposedly central to the political economy in a sense and being the pioneer leader, what would you say actually prepared you for this assignment?
There are probably three or four things that I will speak to. The first is that I had the privilege of working in some of the most diverse and complex organisations in the global financial market. I worked at Goldman Sachs Asset Management in London and I managed the global technology sector. We invested anywhere from San Francisco to Taiwan and everything in-between. Secondly, I had actually gone on to be a sales analyst, which forced you to think deeply about certain sub-segments of the economy and my sector was privileged to have been ranked number one in Europe and also to be ranked number three in the United States. In the semiconductor sector, that doesn’t happen. Franchises don’t travel across countries. So we were very fortunate to do that. And to do that, one of the things I have always felt was important was the ability to have a small and effective team and build it very quickly.
The team that we put together in London, from nowhere became number one within 18 months. When you say number one, let me put it in perspective for you. At JP Morgan in London, we were up against almost 85 big investment firms and in the US, there are over 200 investment firms. So to me, to be number three or number one is not a joke. But it was all down to the people that I worked with, hiring the smartest people that you can find, motivating them, turning them into leaders in their own sectors. And, quite frankly, building a work culture that does not have any big man. At the NSIA, you would see me with my staff arguing. This is an analyst who just came out of school and I am having an argument with him, which is fine, because you encourage them to think; you encourage them to stand their ground; you encourage them that in an investment process, it is one man, one vote and everybody has a voice and should speak.
So, if you really want to see a flat structure in action, come and see NSIA. I sit on the floor with everybody else. My office is almost like your newsroom – we are all interacting always, and it’s all glass doors. On a typical day, you can’t even tell who the managing director is. You should not be able to tell, because it is really what it takes to build an investment DNA in an organisation. Those are the things we set out to do. Of course, we are still working in the political economy as you put it. In summary, first, it was the exposure that one was privileged to have: I worked in London, Asia, New York and San Francisco. There is hardly anybody who manages money today globally that I do not know and this is just purely the privilege the job offered me. Secondly, the semiconductor sector is the single-most complex sector and it touches everything in the world.
It is a very volatile fast-changing sector that forces you to learn and have the ability to make decisions very quickly. So it was quite a broad experience that I had. But before all of that, talking about what prepared me for this role, I grew up in Nigeria. I was telling somebody recently about how Lagos changed my life as a person. Till today, I wake up at 4am every day since 1991. This is no joke, because when I moved to Lagos, I was living on the mainland and that was before the Third Mainland Bridge was opened. So you can imagine, if I wasn’t leaving my house at Isolo very early to enter my car and start going to work very early. You realise that some of those things that used to look like punishment, really shaped you. So when you now turn up in certain environments, you are really prepared.
For me, it was a very good preparatory experience. And the organisations I had worked with in my early days in this country, Arthur Anderson, which is now KPMG and I worked with Diamond Bank, when it was a start-up. Pascal Dozie was one of those, who actually affected my life, because the way he ran the organisation is similar to the way I run the NSIA today –a flat and open structure – so you learn some of those things over time. Preparation-wise, building teams, working in complex environments, dealing with complex sectors and managing stakeholders across the board were some of those things that prepared one. But having said that, Nigeria is a whole different kettle of fish.
A few weeks ago, the House of Representatives’ Committee on Finance threatened to block budgetary allocation to NSIA, if it failed to present its 2022 budget proposal to the National Assembly for consideration and passage. That incident was widely reported in the media. Why will the NSIA not present its budget to the lawmakers for consideration, like other government agencies?
Let’s establish four things. Number one, we had never submitted the NSIA budget to the National Assembly. The relationship between the NSIA and the National Assembly is very simple. The National Assembly represents the federal house. The NSIA is owned by the federal government, the state governments and the local governments. So the federal house represents one shareholder and the state Houses of Assembly and local governments all represent other shareholders too. So if you are going to present your budget to one out of the group of shareholders, you need to take it to others too. You need to understand that it is a matter of principle of shareholder relationship with an organisation. You are one of 812 shareholders. There are 774 local governments, there is FCT and the local councils and there is the federal government.
But aren’t the National Assembly members representatives of the states as well?
Correct. When the NSIA law was passed, every single state House of Assembly had to pass the law. Everyone has a share certificate. Secondly, the law of the NSIA was passed by the National Assembly and that law gave the power to the board. And in making sure there is representation, the board of the NSIA has members representing each geo-political zone. Thirdly, where in the law does the NSIA budget really fit? The NSIA is supposed to manage money in excess of the budget. So where is it going to fit if it is anything in excess of the budget? Fourthly, for us, if you put the budget of the organisation in a working environment, once the budget is passed, it becomes law and once it becomes law, you can’t adjust to the market environment anymore. But the most important thing is we have had this debate with the National Assembly for nine years.
This debate did not start today. We had this debate with the David Mark-led National Assembly; the Bukola Saraki-led National Assembly and we are having it again. But it is a matter of principle. If you abdicated the right to controlling the budget to the board by law, if you want to change it, you pass the same law. When the NSIA law was being passed with all the states, it was agreed that this is how it should be done. Even in the complaint that the lawmakers wrote, they said NSIA was relying on its law. Let me be clear, this is not a fight, it is not a discussion that started today. But you also look at the NSIA, we publicly announce our accounts. We have it audited by PwC and it is published within, maximum, 100 days to the end. We say 90 days but it is a very complex organisation, sometimes things slip a little bit. And we work very hard to make sure that before the end of March and latest April, the accounts are published.
We have a detailed annual report on every single thing. The budget is passed by the board latest by December. When we had this discussion with the last Assembly, the decision was that they were going to amend the law. There is an amendment of the law ongoing, so asking for it to change before you pass the law doesn’t even make any sense. So we would have continued dialogue to explain that it is what you do with shareholder groups. The federal house represents one shareholder. As I said, if you go to the federal house, what stops Ekiti State from saying come and present the budget? What stops Bayelsa from also saying we should come and present the budget? They can, because they are all shareholders. The states, in aggregate, own 52 per cent of the NSIA, the federal government owns 48 per cent of the NSIA. So it is a shareholder relationship. The NLNG is owned in the same way. Do you go to the National Assembly with the NLNG budget? The point I am making is that you need to recognise the power of the constituent parts of the organisation. As I said, technically, the NSIA is supposed to manage anything in excess, which is after the budget has been passed, it is the excess revenue that you put in a purse that is managed by NSIA. So if you are going to put it as part of the budget, it is not supposed to be there.
Why do you think they are concerned about seeing your budget?
I don’t know, but you can see the accounts. You can always look at the accounts. Historically, you can look at returns earned by the organisation.
The NSIA has the Stabilisation Fund, the Future Generations Fund and the Nigeria Infrastructure Fund. Can you explain each of them and how they are performing?
The NSIA is the most complex, small, sovereign wealth that the world has ever seen. And I say that because, when you have a sovereign wealth fund, you have two things that they probably do. Sovereign wealth funds the world over tend to do stabilisation and savings. They don’t invest in the local market. Ours is that we have stabilisation, we have savings and we have domestic investment. And they are all different funds. First of all, they are ring-fenced. Any money we put in the Stabilisation Fund cannot be taken out and put in the Future Generations Fund. That will be against the law. And once it entered into that fund pool, you cannot take it out to another fund pool. The Stabilisation Fund was designed to provide stabilisation. If you noticed, last year, when there was a budget crisis, the government called $150 million from the Stabilisation Fund from the NSIA. And we gave it to the government.
It was designed that we return that money within seven days of demand. The law says that the Minister of Finance shall have the right to call once she proves the need. And of course, there was COVID-19. She got approval from the necessary authorities and we provided the money. So the Stabilisation Fund is very short-term in nature in terms of how it works and as a consequence, it is not a high-return fund. I think last year, we did about six or seven per cent on that fund. We just want that fund to earn United States inflation. So the US inflation last year was something about one or two per cent. That fund was designed to almost be like a check-in account such that whenever the government needs money, it can call for it and it is available.
The Future Generations Fund is really the heart of the NSIA. It is the heart of investments and savings for future generations. Here, we invest everywhere from global capital market, equities, debt instruments, private equities, venture capital, commodities and other assets. It is a diversified investment that we make on that, and it is doing okay. Last year was one of our best-performing funds and this year, it would be one of the best-performing funds as well. I made it clear at the beginning of last year when I was on Arise News, your sister organisation, that we will not earn the same level of returns as we did in 2020. And that is just because last year was an exceptional year for us. We made N160 billion last year. This year, so far, it is looking okay but I am still not certain about this year. We will not be anywhere near N160 billion at all, that, I can assure you.
If we are close to that, I will clap but as of September, we were at N119 billion, which is still not bad. We are in a business, where everything can unravel in one month. I am still hoping that this year, we will close around N130 billion, maybe. If things hold together as they are, then, we could be okay at around N130 billion or N135 billion. But I wouldn’t want to take that number to the bank, because we still have a very delicate, over three weeks to the end of the year. It is really delicate because so many things are likely to go wrong. The Nigeria Infrastructure Fund (NIF) is doing okay. That is the fund that is involved in infrastructure – from toll roads, to agriculture to healthcare, financial marketing infrastructure. Many of you don’t know this, but the NSIA developed the Development Bank of Nigeria; the Nigerian Mortgage Refinancing Company. The NSIA sponsored and founded Infracredit; developed the Family Homes, the NSIA is the strategic second-largest shareholder in NG Clearing. These are all financial market companies. So the NSIA has been very active. Of course, healthcare, the toll roads, second Niger Bridge, Abuja-Kano road, Lagos-Ibadan expressway.
The NSIA is part of the agencies that worked on the establishment of the InfraCorp. What is the update? Has the company commenced operation and how does it intend to go about its funding?
Infracorp is one of those we refer to as financial market infrastructure. The infracorp is sponsored by the Central Bank of Nigeria and the NSIA sits on the board, as an investor and a co-promoter of infracorp. We concluded the process of setting up the board in September; we have just concluded the process of hiring a managing director and we have appointed four asset managers. Think about it this way, in the NSIA, under our Future Generations Fund, we have many asset managers. I think we have more than forty asset managers, who we look at and say okay, you are a smart guy, develop a strategy and we have an advisory board with an oversight role. So Infracorp is going to be another group of fund managers and the NSIA as an investor will sit on the board. Their job is to take some seed capital from Infracorp and then go on to raise other capital. That is how Infracorp was set up. Setting up these businesses is a little more difficult, but we are almost there. A lot of major milestones have been achieved. Asset managers have been appointed, the board has been finalised, the managing director has also been finalised and I think it is quite advanced in terms of the first investment we are about to make. So things are picking up.
Earlier this year, you said the NSIA was going to raise a debt instrument and specifically you mentioned the Sukuk. It’s already the last month of the year and no one has heard anything about the planned fund raising?
It has to do with the projects for which we wanted to raise the fund, particularly some of the Presidential Infrastructure Development Fund (PIDF) projects. We have actually found that Infracorp is going to take up some of that funding and some of the projects. We realised that we didn’t need to go to the market in the measure we had wanted to and we are seeing a new approach to funding. We are still coming to the market but it depends on what market you are talking about. We have got an investor group through the Infracorp, that addresses some of the areas of need. So it reduces the need to go to Sukuk, but we will still come. And the quantum of money we need to raise is now significantly lower, because what is clear is that Infracorp is now in a position to take up the significant pool of funds we needed to raise. We are still going to come to the market and whether it is Sukuk or other forms of capital, it is still being developed. Sukuk at that time felt right but at the time also, remember that Infracorp hadn’t actually begun to take off.
From what I have seen of Infracorp and the commitments we have signed with Infracorp, it is actually going to help us reduce the need to raise a huge amount of money from the market. We will still come to the market. I can’t tell you exactly how much but I think the timing is certainly going to be next year and that is because we are seeing a significant quantum of capital coming from Infracorp into our projects. So you are right. I had a plan in the first quarter of this year to come to the market, because if we didn’t raise that money, we were not going to continue with the Lagos-Ibadan, Abuja-Kano roads and the second Niger Bridge. But Infracorp is now stepping into that gap and reducing the size of capital we need. So for Infracorp’s first investments, the commitments we have signed already are going to be to first invest in the PIDF projects.
That reduces our need to go to the market, but it doesn’t eliminate it. We are still going to come to the market just for the shortfall on the road project. We are likely to come to the market also because of a few things you might see announced very soon, that may see us coming to the market a little bit for healthcare and perhaps, a little bit for innovation fund. It has been pleasantly surprising for me to see the role that Infracorp can play and has reduced the need for us to go and raise debt, when we can raise equity. It has been a nice outcome, but we had a plan in the first quarter, which has pleasantly turned out to be better because Infracorp is now able to step into some of the gaps for us and reduce the quantum of capital we needed to raise. We need to absorb that capital first and then see what we need to spend.
Where is the NSIA on the Nigeria Innovation Fund and are you planning of raising equity or debt and how soon?
The NSIA will seed it with its own equity and we are in the market for both equity and debt. But first of all, it is equity we are looking for. Now, if there is an advanced project that carries some debt, you don’t want to multiply the risks by taking on debts. But if there are businesses that are already able to operate, we can stomach that. Funny enough, the first investment we are making is actually a debt investment in the data sector. But it is a combination of both equity and debt, depending on the business. Where we are now is twofold. We have actually started to put together the partners that will help us in analysing and understanding this innovation sector. We have finished the piece of research and recently, to really understand the market space and how to approach it.
That research was published and presented to us two months ago. The preparatory process has taken a little bit longer than it was likely to take, frankly. But it is better to be properly prepared than rushing and making mistakes. We have made our first investments, hopefully, that gets signed off soon. The board approved this investment about seven months ago, but it is just the whole back-and-forth issue. The other thing we have done is that we have invested a lot in venture capital funds, who are also now sourced. It means for them to go out and look for some of these innovation objectives. The third thing we are doing right now is we are pulling together the partners. We are going to go out soon to get them approved and once they are approved, the fund will start to run.
Finally, we usually start with our own capital and then we invite partners to join us. Like in healthcare, we started with our capital and now we have many people wanting to give us funds to do healthcare. I know there are lots of expectations and there should be because we see a golden opportunity for Nigeria to level up against the rest of the world when it comes to technology. My vision of innovation especially in information technology (IT), because when they say innovation, it’s always IT people focus on, but their IT is in industrial, agriculture and many other things. But let’s talk about IT, which is an area I am familiar with. I see a revolution in terms of the development of IT with things like business processes that are going to India coming to Africa. Nigeria is just a place. With the right investment, a child can live in Yaba and work in San Francisco, which is really what is happening now. So we need to just scale that up and give them the right investment. This place could become the data centre hub for West Africa. So, be expectant. Unfortunately, the preparation has been slower and a little bit more challenging, but we will get there.
Where is the NSIA on the Second Niger Bridge and are you on track to meet the 2022 timeline?
If you go there, I can 100 per cent assure you that by the end of April 2022, you will see a bridge but you can’t use it yet. All the last decking would have been done, what would be left are the access roads. Where are we on the access roads? The access roads were not part of the NSIA’s original scope, it was only added to us at the beginning of this year. We only recently raised the money to cater to the access road. The contractors from the Ministry of Works are yet to sign the agreement, but the funding is now ready. The access roads work will start off expeditiously once the contract is signed, but the funding will not be a problem. Even if the access roads are not entirely ready because of the swampy area (you have to sand fill and all that), there is a bypass with which the bridge can be used. I am happy to tell you that you will be using that bridge hopefully before the end of next year.
What is the level of the NSIA’s involvement in the construction of the Lagos-Ibadan expressway which a lot of people believe is taking too long to complete?
Funding is not the issue, it has never been the issue. There are a number of implementation challenges here and there. The problem with the Lagos-Ibadan Expressway is that it is the most trafficked road in West Africa and you are rebuilding it while other people are using it. Unlike the Second Niger Bridge, which is a whole Greenfield somewhere in the swamp, this one is insane. I know people say it is taking too long to complete, but you know that the road has been on the drawing board for a very long time. We have only been involved in it in the last three years. If you drive the road, let’s assume you have one magical hour, when there is traffic, if you drive the road, you will hardly see any pothole on that road. You can take-off from Ojodu-Berger and just move smoothly to where you are going. So we have done the road, and it is 77 per cent completed. What is holding us up is what? Toll stations.
That one is a nightmare: overhead passes, serious issues, pedestrian bridges – these are the things and on that, noted, for every moment you put a cone to repair something, the traffic spills from Third Mainland Bridge. Since we got involved in it, there is no week that passes that somebody does not abuse us. But as I said, that road when you drive it now, there are not many places where you will see a pothole. The actual pavement has been done, we have done something, and it is just all these finishing touches that are left. Again, I think you will never appreciate a road until you see road markings and sign posting. But what is going to create a nightmare for many of you is the toll plaza.
That construction will create problems. I am not going to sugarcoat it for you, in the next 12 months, you will still have to bear pain on that road. But everybody I know is always grateful to say that they did not experience potholes when they drive on the road. Each of those roads is one meter excavation, so those roads are built with a 20 years’ warranty. So we are getting there, but when you are using a road that has 40,000 vehicles a day and you are repairing it, it is like living in a house and repairing the house. You live inside the house and they are knocking your roof off, it is horrible. My job and the job of the NSIA is that we are financiers, but for deep technical issues, you should go to the employer, which is the Ministry of Works.
Do you have a completion date for the road yet?
We do. As I said, we are 77 per cent completed as of last week. So we have 23 per cent to go.
Let’s talk about the repairs on the East-West, is the NSIA involved?
No, not any more.
Why?
It was part of the original PIDF agreement, but last year, there was a request and the president granted that request to return it to the Ministry of the Niger Delta, which we did. We returned the government’s cash contribution to us which was about N20 billion, that was returned to the Federal Ministry of Finance for onward transmission to the Federal Ministry of Niger Delta. So the NSIA is not part of it.
It appears the federal government is ceding a lot of roads to the NSIA, why is that?
They are not a lot. We have only been involved with Abuja-Kano road, Second Niger Bridge, Lagos-Ibadan expressway. East-West road originally was not brought to us.
But more responsibilities are still being given to the NSIA?
There are good reasons for that, and for that, we are grateful, at least, it speaks to the fact that we have won the support of our major shareholders despite all the things that we get bashed around for.
Some are wondering why the huge government borrowing for same road projects if the NSIA is doing all of these?
In terms of the borrowing plan of the government, I really can’t speak on that. As you very well know, there are many other aspects of the economy. We are just dealing with a small aspect of the broad scheme of things. I am not the Minister of Finance, I am not in the Debt Management Office and those people have much bigger issues to deal with than I have to. I don’t have to deal with petroleum subsidy, I don’t have to deal with funding the states and local governments, and I don’t have to deal with all of that. They are universal issues and you need to respect their own universal responsibility compared to my own responsibility. However, on borrowing, I have a philosophy and I think we need to understand that borrowing is a very strategic issue and every government that is successful needs to manage it well. What is the Gross Domestic Product (GDP) of Malaysia? What is Malaysia’s external debt stock? $200 billion. What is Malaysia’s government revenue? $50 billion.
The most important question to ask is whether the debt is reducible. If you are borrowing to eat, that is a poor man’s way of borrowing. But if you are borrowing to invest and build things that can make the country develop, that is the right way to develop. The United States is one of the most indebted countries in the world as is Japan, China, and Malaysia. So it is not debt that is the problem, it is what the debt is designed to do. I see no reason why we cannot sit down and say we want to build 50 strategic industries. Gas processing is here. We need to build roads, railways, because if we don’t do that, we will never have productivity. I understand the whole borrowing thing but I like to encourage you to just take your time and look at Malaysia. Let’s not mention Japan and others, let’s talk about countries at our own level. Look at Malaysia, look at their debt, look at Indonesia and look at their debt. So, it is not so much about debt, it is about how it is used. That, I think, is the most important thing.
NAFDAC Director General recently said Nigeria has met the World Health Organisation’s conditions for local vaccine production. Is the NSIA considering investing in domestic vaccine production?
Yes, we are. Earlier today, I was speaking about pharmaceuticals as an area of interest for the NSIA. We have gone quite far in our discussions on everything from vaccines to drug manufacturing. Pharmaceutical is extremely important. Last year showed us that the most important thing in life is food, medicine and shelter, everything else is extra, and clothes to wear. But food and medicine are very important. Secondly, it showed us how dependent we were on the global trade of medicine. Thirdly and more importantly, is that we have such a competitive advantage in medicine as a country and we are not using it. So those were the messages of last year and we must do something about it. Why do we have to import every anti-effective from India? Malaria, Augmentin, these are generics that you can make easily. We should be supplying the entire West and Central Africa.
So generally, what is your investment in the healthcare sector?
It has been good. You know we built the first world-class cancer center here in Lagos. It is called NSIA LUTH Cancer center. We have one in Umuahia and Kano. Now, our board just approved the plan for us to build 22 centers across the country. We are starting the procurement for the equipment very soon and we are asking all the big equipment manufacturers to bid.
What has been the experience from your investment in agriculture?
There are three or four things we started in agriculture. The first is the Presidential Fertilizer Initiative, we are managing that and it has been truly successful. The Presidential Fertilizer Initiative started in 2017, and we managed all of the fertilizer procurement and distribution for the country. And that has been hugely successful. Before the Presidential Fertilizer Initiative was announced, fertilizer was like N13, 000 per bag and within the first 12 months of being in the programme, the price of fertilizer went down to N5,000. There was seven million of excess fertilizer. And we had at the end of the first year more than 11 companies participating. Today, we have 52 companies participating. There was no fertilizer shortage in the country last year and the entity that we used to run it made profit last year. So it has been a complete change of what we understand of the fertilizer market today.
That is number one. Secondly, we have made a direct investment in agriculture. We partnered with a company called UFL, which is based in South Africa and we created a fund for agriculture investing in Nigeria. Our first farm is in Nasarawa State and it is something to behold. We are able to do about six to seven tons per hectare, whereas the average Nigerian farmer does two and now we are going to do 10 to 12 tons per hectare. It is a joint investment: 50-50 with this whole mutual company and the NSIA. So we are planning to do a lot more in Kaduna, Edo, Abia, Oyo, and there are quite a number of states on our horizon. Thirdly, we are working alongside the African Development Bank to manage the funds, hopefully, we will sign that next week for the Special Agriculture Processing Zones. So in agriculture, we are very active.
Has your farm in Nasarawa State been impacted in any way by the activities of bandits?
We don’t have any issues with that. We have a very good relationship with the community and we don’t expect that to happen.
So what are the expectations for the NSIA in 2022?
I still think we will continue to deal with what is technically an uncertain environment. We are cautious going into next year, for a number of reasons. The first reason is because I still think that global inflation will continue to be a challenge for the world and to some extent, a challenge for the NSIA, because it will ripple through asset prices and could create some real uncertainty for the investors. That is the first point I want to make, and as such, I believe that quite a number of asset classes that have done well will struggle next year.
The second thing is that I think we will have a less accommodative market environment than we have had in the last two to three years. And I am not trying to manage expectations, I am just trying to give you the facts. I am going into next year a lot more cautious than I have been in the last two years. I was cautious this year compared to last year. Last year, I was extremely bullish. Even in the middle of the COVID-19 pandemic, markets were falling and we were buying. So that was why you saw our profit skyrocketed. We went bullish last. We went from about N30 billion profit to N160 billion. And for a while, it took a lot of courage because it didn’t work out but it was actually from the third quarter all those investments started turning out right.
There are speculations that you are considering succeeding the current governor of your state, Abia State. Is that true?
There is absolutely no truth in that whatsoever. This is the first time somebody from the mainstream media is asking me this and that tells you it is serious. I will tell you point blank, I have never hidden what I am going to do next. I have had the privilege of running the NSIA for nine years. October next year, my term of office will expire and we are going to work through it after which I will go back to what I was doing before. I had a career before this. I am a professional and I don’t understand politics. And so, I have never had any political interest at all.
So let it be on record, it is not a business I understand. If you give me your asset to manage for you, that is fine, but this other one (politics), it is not something I know how to do and it is complicated. There are other ways to contribute. Sitting down to manage the NSIA and the international community trusts you is not an easy task. Many people don’t know that the United States government decided that the NSIA would be the one to hold the returned assets. Do you understand how much due diligence that took? So that is what I know how to do, but politics is not for me.
You are obviously leaving office next year, are you prepared?
We are preparing the NSIA for the transition.
But are you ready to leave office?
I have been ready for a long time, because I think the organisation is on the right path and we have groomed a whole bunch of people and structure. I like to think it is a well-built organisation.
You sounded excited to say you were ready to leave office next year, does it mean you were not enjoying what you were doing?
No. What I mean is that, first of all, we have a solid board. We have a lot of people in the organisation. The strategy is clear. There are a number of things we still need to execute but it has always been in the plan. I don’t own the business. So you put the plan in place and you run the organisation. When you have a date that you have known from the beginning, you put your plans together and you run it exactly to that, it is as simple as that. As I said to you, what I have done, I have done in the same line of work for the last almost 30 years.
With the nine years you have put into the job, are you proud of yourself?
We could have done more. We could have done much more. If we had been given the assets that were discussed at the beginning, if the NSIA had $10 billion in the bank, it could have been a different world. Everyone is thinking, wow, look at the things you guys have done. But with the assets we have, I think I am very proud of what we have accomplished. But we could have done a lot more and quite frankly, that the NSIA was mired in controversy in the beginning – the period when oil prices were very high – and was not given enough money to take off fully – was a wasted opportunity. First of all, don’t take this wrongly, we got more capital in a recession than we got when there was money! If the NSIA had $10 billion dollars and the current run rate of our returns is roughly 10 to 12 per cent, which is $1.2 billion in returns. That goes a long way. That builds you one Lagos-Ibadan expressway in a year. That builds you two Second Niger Bridges every year. Here we are, our returns are $150 to $200 million which is not enough. The opportunity to have sown a big seed was not utilised. So in your personal life, investing should be a discipline. Do you want to eat the seed today or you want to plant it and harvest the crop later? It is a choice.
Is the returned late Abacha’s loot part of the funds the NSIA is investing?
Correct! There’s $312 million returned to us. Now, that fund is monitored differently. We have the US government involved, two civil society groups called CLEEN Foundation, you have a special auditor involved and every month or every quarter, we have discussions with all of them and we go on sight visits. So the oversight is double in terms of that fund. At the NSIA, we submit ourselves to six audits in a year. Four by PwC, one by the Auditor General of the Federation and one by the Accountant General. Now, on top of that, we have Deloitte as a special auditor. We also have the Federal Ministry of Justice and they went with engineers to see what you have done. They measure and approve before we pay. So it is something that is really looked at intensely by all parties involved.
