By Dipo Olowookere
As a result of drop in its comprehensive income and profit in the 2017 fiscal year, the Nigeria Sovereign Investment Authority (NSIA) says it will not pay dividend to federal, states and local government councils in the country.
Managing Director of NSIA, Mr Uche Orji, in a chat with newsmen, said the dividend payment has been pushed till the end of the 2018 business year.
According to him, 2017 was a challenging year for the agency as the total comprehensive income depreciated to N27.9 billion from N149.8 billion in 2016, while the profit fell to N22.6 billion from N130.4 billion recorded in 2016.
The Act setting up NSIA stipulates that if the agency makes returns consistently for five years after commencing operations, it has to pay dividend to the three tiers of government.
Since it started operations in 2013 with $1.55 billion, NSIA has recorded profits and stakeholders had expected the agency to pay dividend this year for the 2017 financial period.
“The law said we should show profits in each of the three funds consistently for five years, after which we will start declaring dividend, and this is the fifth year of showing profitability.
“The dividend policy was considered by the board but we decided to step it down and consider it again next year. But it is our keen desire to come up with a policy that will be approved by the Economic Council of the NSIA such that people will begin to actually see returns.
“So, for now, it was discussed and stepped down till next year when we have to look at it again,” Mr Orji said at the media briefing.
The NSIA chief blamed the poor performance of last year on the “net foreign exchange gains, which accounted for the reduced net operating income recorded in 2017, as a result of the government’s currency management policies, which were aimed at stabilising and reflecting the naira’s real value in 2016.
“To this effect, the Naira weakened in value from 196/$ to 305/$ in 2016.
“Considering that at the end of that year, about 80 percent of the authority’s assets under management were denominated in Dollar, the devaluation resulted in the recognition of significant exchange gains in the authority’s Naira books at the close of the year.”
Adedapo Adesanya