making an Annual Report & Accounts 2018 Report & Accounts Annual Enabling Sustainable Growth: impact on Nigeria’s future

Nigeria Sovereign Investment Authority Annual Report & Accounts 2018

www.nsla.com.ng Email: [email protected] Email: Tel: +234 (0)9 461 0400 461 (0)9 +234 Tel: Nigeria Maitama, Abuja Plot 1386A, Tigris Crescent Tigris 1386A, Plot The Clan Place, 4th Floor 4th Place, The Clan Nigeria Sovereign Investment Authority Investment Nigeria Sovereign Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 1 43 49 49 49 50 51 57 58 59 60 63 64 65 67 69 42 56 157 158 156 164 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Risk Management Risk Overview Risk Management Approach Objectives of Risk Management Structure Risk Management Governance Risk Appetite Risk Universe highlights Financial General Information Report Directors’ Responsibilities of Directors’ Statement Report Independent Auditor’s Income of Comprehensive Statement Position of Financial Statement of Changes in Equity Statement Flows of Cash Statement the Consolidated to Notes Statements Financial Other Disclosures Summary Financial Five-Year Information Corporate Statement Added Value 02 02 03 04 06 10 13 16 19 20 24 27 33 33 36 40 12 26

The Nigeria Sovereign The manages Authority Investment Fund. Wealth Sovereign Nigeria’s It as an independent was established an Act of by institution investment in May 2011. Assembly the National Introduction 01 NSIA About Funds Mandate The Philosophy Corporate Statement Chairman’s Review Officer’s Chief Executive Milestones Investment Management Funds Market Overview Fund Generations Future The Fund Stabilisation The NigeriaThe Infrastructure Fund Managed Funds Third-Party Governance Corporate Diversity Culture, Our People, and Technology 32 Governance Framework Governance Council Governing of Directors Board Committees Board Contents Better road infrastructure helps in achieving getting and speedier products more deliveries to effect the has This generating of quicker. market the government for taxes profits business, for greater and real, sustainable economic growth. it Further, means the populace affordable to has access high- them. of more and quality produce National the from million US$650 received NSIA for the contribution as (NEC) Council Economic (PIDF) Fund Infrastructure Development Presidential of three across deployment capital commenced and including road projects major the PIDF, the under and Lagos-Ibadan Bridge, Niger Expressway, 2nd Abuja-Zaria-Kaduna-Kano Road.

speedier deliveries Making an Impact: mean roads better connections,better and getting products to market quicker to Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 3

ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL our activities are clear and consistent with with consistent and clear are activities our within the ambit of our enabling Act, we we Act, enabling our of ambit the within we are uncompromising in our adherence to to adherence our in uncompromising are we the tenets of probity, character and accountability in all our our all in accountability and character probity, of tenets the endeavours. Discipline: do. we all in ourselves apply conscientiously Transparency: best practices. building a savings base for the Nigerian people; Nigerian the for base a savings building and infrastructure; of Nigeria’s the development enhancing stress. economic of times in support stabilisation providing Integrity: • • actions, all evaluate we which against ideals the are These relationships and investments. Our Mission driving in role a leading play to is mission NSIA’s all of benefit the for development economic sustained Nigerians through: • • • Vision fund wealth sovereign a leading as NSIA establish To for investments promoting in a role playing globally; development. economic Nigeria’s Values The Authority’s fundamental beliefs and culture are driven by three guiding principles, which are: • Our Corporate Philosophy Our Corporate

in 2017. NSIA is also the fund manager for the Presidential Fertiliser Fertiliser the Presidential for is also the fund manager in 2017. NSIA Initiative other third-party (PFI) and also manages on behalf funds agencies. of other government which Under Management Authority's (AUM), Assets The total PIDF and third-party the funding for capital, includes its core US$2.44 billion at the to NSIA, increased by funds being managed end of 2018. portfolio in a diversified of medium and long-term NSIA invests investors. with strategic catalyse co-investment assets and aims to partnerships investment Authority strategic The developed has national finance institutions, development with multilateral include These and private banks sectordevelopment institutions. Department of International Development Kingdom’s the United Bank (WB),World (DfID), Corporation(IFC), International Finance Corporation Africa Finance African Development Bank (AfDB), (AFC) and the German Development Bank (KfW Bankengruppe). and domestic infrastructure in Nigeria’s directly NSIA also invests of financiers. and developers project with co-invests areas Its agriculture, cover infrastructure investment in domestic focus NSIA motorwaysindustrialisation,gas power. and healthcare, key in these critical projects has closed and executed sectors, investment of needs and other areas expand to and hopes to opportunities. has been validated culture corporate governance strong NSIA’s NSIA is and various recognitions. its successful investments by ranked quartile within the top transparency and governance for transparencyThe Institute (SWFI). Fund Wealth the Sovereign by the the Authority 70 SWFs and has remained over index rates highest-ranked SWF in Africa since 2015. Wealth of Sovereign NSIA is a member of the International Forum on best and subscribes the Santiago Principles (‘IFSWF’) to Funds Funds. Wealth Sovereign managing practices for NSIA was appointed as the fund manager by the government the government by as the fund manager appointed NSIA was NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 2 The Nigeria Infrastructure Fund The priorities, with national align that in domestic infrastructures invests Nigeria Infrastructure Fund The opportunities and high social impact, create returns for commercial attractive for potential have sustainability. environmental with NSIA, and promote co-investment The Future Generations Fund Generations Future The and assets investments in long-term seeks investment fund that is a savings Fund Generations Future The of Nigerians. generations future for savings provide to The Stabilisation Fund Stabilisation The against budgetaryresortwould be a last safeguard deficits. It to is intended Fund Stabilisation The meet shortfalls falls annually to about by in the budget brought withdraw may which government from or other budgetaryin oil prices constraints. The Mandate Funds Mandate The The Authority received US$650 million from the government the government US$650 million from AuthorityThe received for the US$8.1 billion in 2018 as the first tranche of funding which (PIDF), for Infrastructure Development Fund Presidential From inception, NSIA’s capital was allocated across its three its three across capital was allocated inception, NSIA’s From the the Stabilisation Fund, funds in the ratio of 20:40:40 to and the Nigeria Infrastructure Fund, Generations Fund, Future a new ratio that Inapproved the Board 2018, respectively. FGF, 30% to contributions capital the SF, to 20% of future allocates been no additional contributions have Whereas NIF. and 50% to Authority capital since then, the is working on a NSIA’s made to and contributions on a regular receiving framework for strategic sustainable basis. NSIA started October operations in 2012 and commenced activities 2013. in capital seed billion US$1 its with investment performance, positive and his confidence in the Funds’ The Muhammadu Management of NSIA, encouraged President contributions additional of US$500 million to Buhari approve to the Authority between 2016 and 2017. The SF is intended to provide fiscal stability support provide for the to SF is intended The serving country, government which reservea as from fund FGF meet budgetary makeThe to may withdrawals shortfalls. of Nigerians generations future for savings accumulate seeks to a generate NIF seeks to The in long-term assets. investing by portfolio in Nigeria of critical investments infrastructure that will support investment, and economic diversification, attract foreign economy. of the boost the long-term growth Nigeria Sovereign Investment Authority (NSIA or the (NSIA Authority Investment Nigeria Sovereign Nigerian investment is a globally-focused Authority) – an Act of Parliament established by institution. NSIA was etc) (Establishment, Authority Investment Nigeria Sovereign Sovereign Nigeria’s invest and manage receive, Actto 2011 – funds on ring-fenced three (SWF) through Fund Wealth of the Federation. tiers of government behalf of the three (SF), the Future Fund the Stabilisation are funds three The Nigeriathe and (FGF) Infrastructure Fund Fund Generations (NIF). About NSIA About Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

5 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL an Executive Director and the pioneer Chief Investment Officer (CIO) of NSIA, retired Officer and the pioneer Chief Investment retired Director (CIO) of NSIA, an Executive of his appointments. the expiration following Board and the roles his executive from and wish him the years his contributions over for I thank Hanspeter On behalf of the Board, in NSIA’s President Vice Mr Owodunni, Kolawole a Senior endeavours. in his future well as Acting Head of Externally Unit, was appointed Investment Managed Investments. Going Forward adopted we have (2019-2023), years the next over five a new growth phase of enter we As comprehensive a 2019 will be in A major focus activities. Authority’s the for plan strategic a that ensure to and procedures structures of our organisational and upgrade review since 2011. growth NSIA’s in line with international given best practices, they remain subsidiary will likely scope of the review oversee The include restructuring we how resources. executive use our finite better sector specialisation and to increase entities to governmental regular mechanism for a systemic develop will be to A second focus management, thus ensuring the long-term contributions the capital under NSIA’s to viability of the Authority. investing by on portfolio results and operating company our focus NSIA will also intensify in and expanding our portfolio management and third-party management asset supportand public and promote to continue will economically viable, We capabilities. change mitigation and adaptation projects. climate private sector-led, Conclusion Vice the thanking I will conclude by of Directors, the President, On behalf of the Board National Assembly, the leadership and members of the the Minister of Finance, President, and the Territory Capital the Minister of the Federal the Governors of the 36 States, achievements confidence and supportto NSIA’s indispensable are Your Nigerian people. the for long-term value and growth and our ability continue delivering sustainable, to benefit of all Nigerians. Mr Jide Zeitlin of Directors Chairman, Board Governance practices of sound corporate governance continues and entrenchment adoption The In two a priority be important 2018, NSIA implemented to the Board. to for initiatives and risk management processes. our investment improve the into its Risk subsume its 2017 decision to operationalised Committee Board The (1) Externally two committees: into and divide the latter Committee existing Investment risk NSIA’s enhanced reorganisation This Managed and (2) Direct Investments. Investments the lines of authority clarifying by and strengthening processes management oversight was committees Board operation of the The and accountability within the organisation. based on specialist committees to further directors of the redeployment enhanced by sector expertise, in chairpersons the appointment of new committee increase and an their active for members all Board to I am grateful the frequency meetings. of committee participation committees. Board in the Authority’s Enterprise Resource of a Board-approved NSIA also commenced the implementation close operational to which was designed ERP solution, The (ERP) solution in 2018. Planning resources, human fortify NSIA’s team, will and improve by the executive gaps identified ERP solution will be The and other internal processes. procurement infrastructure, digital 2019. fully operationalised in late Changes Team in 2018. Mr team Ackermann, Hanspeter one departure executive our NSIA saw from

As we enter a new phase of phase a new enter As we next the five over growth have we (2019-2023), years for plan a strategic adopted the Authority’s activities. 2019 in focus A major be a comprehensive will our of upgrade and review structures organisational ensure to procedures and remain in line they that with international best practices, given NSIA’s 2011. since growth Mr Jide Zeitlin of Directors Chairman, Board

. 1 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA of exchange rate gains. rate of exchange The financial performance data referenced in this statement is stated in naira terms and is inclusive terms in naira and is inclusive is stated in this statement financial performanceThe referenced data

1 Agriculture continued to be a sector of focus for the Authority as we invested US$5 the Authority invested as we for be a sector of focus continued to Agriculture farm franchise network collectives million in Babban Gona, an innovative of grassroots of a landmark also commenced the development 750 KMT in northernWe Nigeria. will which conglomerate, a Moroccan OCP Group, the with platform chemicals basic Ammonia is an important in the establish an ammonia plant in Rivers State. ingredient of fertiliser. manufacture NSIA advanced its vision to develop tertiary develop NSIA advanced its vision to services healthcare in Nigeria, centres at the Lagos University (NLCC) Centre Cancer particularly the NSIA-LUTH to in relation President His by will be inaugurated Excellency, NLCC (LUTH). Hospital Teaching quarterin the second Muhammadu generating revenue Buhari begin and is expected to diagnostic The additional tertiary development. under are centres Two healthcare of 2019. Kano Hospital, and the Federal State Teaching Kano at the Aminu located are centres be commissioned expected to are centres These Umuahia, Abia State. Medical Centre Q1 2020. before In May, NSIA’s funds under management increased when the National Economic Council Council when the National Economic funds under management increased NSIA’s In May, Federal The the PIDF. as seed funding for of US$650 million authorised the transfer our engage NSIA as manager of the PIDF funds reflected decision to Government’s partner as a trusted profile in infrastructure projects of national importance and our 50% of at year-end, As and transparency. corporate sound governance for reputation 2nd Niger the the Lagos-Ibadan Bridge, towards this seed funding had been deployed and the Abuja-KanoExpressway Road projects. Key Developments Key funding of future in the percentage an increase Inapproved 2018, the Board in decrease 50% (with a corresponding 40% to the NIF from contributions to allocated enable to change was intended This 30%). 40% to the FGF from the capital allocation to the country’s in bridging deficit, which infrastructure role a greater the Authority play to a key economic development. remains barrier and future current to 4 Financial Performance Financial and agriculture the in growth by bolstered 2018, in expanded economy Nigeria’s 2018 was a year marked by solid financial results and strategic progress for NSIA. Our progress markedresults and strategic 2018 was a year financial solid by NSIA also funds was profitable. and each of the three profitability increased overall appointment as manager of importantachieved including NSIA’s in 2018, milestones first our of closing the and (PIDF) Infrastructure Development Fund Presidential the in tertiaryinvestments services healthcare operations. I am delighted to introduce the 2018 Annual Report and Accounts of Nigeria Report the 2018 Annual and Accounts introduce to I am delighted or the Authority). (NSIA Authority Investment Sovereign Chairman’s Statement Chairman’s 2017. N44.33 billion, up 58.8% from income was comprehensive total In 2018, NSIA’s impacted by products were investment in equities and related investments NSIA's services sectors and the initiation of the Federal Government’s Economic Recovery Economic and services Government’s sectors of the Federal and the initiation 1.9%. by (ERGP). Plan Real GDP grew Growth including instability in global marketsmarket between the trade tensions due to volatility, (FGF) was particularly impacted Generations Fund Future The and China. States United asset portfolios and strong investment diversified NSIA’s this marketby volatility. marketmanagers enabled the Authority weather results. to turbulence positive and deliver 3.3% a realised the FGF while return annual 11.5% an realised (SF) Fund Stabilisation The that of the two exceeded return (NIF) 13.8% NigeriaThe Infrastructure Fund’s return. other funds • Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

7 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL the administration of President Muhammadu Buhari commenced the Presidential Muhammadu Buhari commenced the Presidential the administration of President this is an innovative social enterprise, which creates economies of scale economies of which creates social enterprise, Babban Gona: this is an innovative farmer cooperatives smallholder farmers franchising a network by of grassroots-level for in northern upscale our operations and the US$5 million to Nigeria. NSIA invested chairman The impactsocial networkthe of members among Nigeriansand large. at serves Committee Investment Direct as a member of the Babban Gona of the Board’s His by Highness which is chaired Muhammad Sanusi II (CON). board, PFI: Initiative manager and as project NSIA appointed Fertiliser (PFI) in 2016, with 10 million bags of over has produced the programme So far, implementing agency. conserve the government project is helping This foreign 50kg NPK 20:10:10 fertiliser. in sums significant saving also thereby content, local maximising by exchange 18 domestic fertiliser blending has also revived programme The budgetary provision. of thousands of direct and indirect in the creation resulting the country, plants across with PFI is also credited The the production and deliveryjobs throughout value chains. price and inflation security food reducing food of enhancement contributingthe by to value chain. stimulating economic activity the agriculture across sector to the agriculture commitment the final highlight of NSIA’s Farming: Integrated by is being developed which State, in Nasarawa (Novum) Panda in 2018 was Project includes a 1,300 Ha maize project The partnership. Investment the NSIA-UFF Agri capacity bean farm,and soya maize with an 86,000 MT poultry a 25,000 MT mill, feed and social the environmental for Approval capacity mill. mill and a 35,000 MT soy irrigation,impact building permits license for and all other assessment, the water major construction workstreams begin and development to authorisations required expected in the first half of 2019. are Our investments in agriculture are designed to serve to designed as vital contributions are to in agriculture Our investments food national non-governmental and deliver governmental poverty, effortsto eradicate Sustainable achieve broadly, more and, change, of climate the effects mitigate security, Development Goals (SDGs). Fund Management Fund mandate ring-fenced three the activities conductsWhile NSIA through investment for categories classified into two were projects in 2018, the Authority’s beginning funds, Externallyas categorized Managed purposes: were projects FGF and SF the administrative twoThe Investments. as Direct categorized were while the NIF projects Investments, committees. Board separate by level at a strategic overseen categories are investment Sustainable Investment for Vehicles – Direct Investments returnswell as as embedding financial and social balancing to NSIA has committed decisions. and project strategy investment in our overall responsibility environmental opportunities sustainability of investment has expanded the universe drive for The and healthcare identified agriculture, therefore, have, We the Authority. to available environmental our objective of achieving social, sectors for frontier infrastructure as the returns on our investments. and financial partners, made commitments in 2018, NSIA along with our local and foreign Agriculture: Babban Gona namely the farm project, key sector, three in the agriculture projects to (Novum): Panda Initiative Fertiliser (PFI) and Project Presidential Babban Gona - An innovative social Babban Gona - An innovative of scale economies creating enterprise, franchising by for smallholder farmers farmer a network of grassroot-level in northern Nigeria. cooperatives (PFI) - Revived Initiative Fertiliser Presidential 18 domestic fertiliser bledning plants the country in the creation across resulting jobs and indirect of thousands of direct thoughout.

for the first five years of years five first the for operations NSIA’s to was – 2017) (2013 concept from transition operationalising to stage funds, mandate three the support of the earning and achieving stakeholders positive investment performance. Mr Uche Orji and Chief Executive Managing Director Officer plank strategic focal The

the Authority succeeded in attaining our . 1 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA the Authority attained nine points, out of a possible ten, out of a possible ten, the Authority attained nine points, & Governance: Compliance Fund Wealth Rating index of the Sovereign Transparency in the Linaburg-Maduell top the in Instituteremained has NSIA (SWFI), surpassinggoal of eight points. our quartile date. 2014 to of the SWFI transparency rating from Resources & Reputation Management:Reputation & Resources reputational losses incurred no financial or were goals in 2018; there reputational our the operationalisation of our projects, operations, of our investment as a result Authority the commenced the efficiency, improve To or our people. technology Microsoft (ERP) system, implementation of a new Enterprise Planning Resource mid-2019. by go live to is intended This Dynamics 365. as a group, NSIA posted total comprehensive comprehensive total NSIA posted as a group, Stability & Performance: Financial the 2017 figure over 58.8% growth represents This income of N44.33 billion in 2018. to 2017 in billion N533.88 from 15.69%, by assets total grew also We billion. N27.92 of N617.69 billion in 2018. Accordingly, funds. for each of our ring-fenced risk thresholds NSIA sets different the funds have different risk exposures, levels of investment and returns. returns. and In 2018, of investment levels risk exposures, different the funds have (ROI) on investment a return posted which was 100% invested, the Stabilisation Fund, a 3.3% ROI, (FGF) posted while Generations Fund the Future of 11.5%. Meanwhile, performanceThe of the FGF was a 13.8% ROI. posted the Nigeria Infrastructure Fund by global capital markets, 6.59% in 2018 with the S&P500 down affected adversely 8.71% index down World and the MSCI exchange rate gains. rate exchange The financial performance data referenced in this statement is stated in naira terms and is inclusive of terms in naira and is inclusive is stated in this statement financial performanceThe referenced data

1 6 for the 2018 fiscal year was stability and growth. To underpin and measure performanceTo underpin and measure year was stabilitygrowth. the 2018 fiscal and for five NSIA developed key performance (KPIs): financial stability; indicators the year, for and compliance management; fund performance; management; reputation resource with the KPIs. targeted we met the outcomes broadly We and governance. Performance – 2017) was operations (2013 years of NSIA’s the first five plank for strategic focal The earning funds, mandate the three operationalising stage to concept transition from to focus The the support performance. of stakeholders investment and achieving positive The Board made a key decision during the year to change the allocation strategy for made a key for Board change the allocation strategy The to during decision the year of the 20:30:50 in favour 20:40:40 to contributions the Authority of funds to from future (FGF) and the Nigeria Infrastructure Generations Fund (SF), the Future Stabilisation Fund the NIF underscores for wallet-share an increased to pivot The (NIF), respectively. Fund broadening the importancefor as a fundamental basis of infrastructure investment of the country. development economic base and the overall Nigeria’s 2018 in Review and risk management capabilities to investment its NSIA has strengthened Over the years, portfolio Our opportunities take advantage of investment globally. both domestically and of selecting process asset managers careful strategies, diversification and geographic jurisdictions and active monitoring of global markets different Authorityacross placed the was This market across returns cycles. investment generate to in a good position particularly of market the levels given volatility beneficial during year. the 2018 fiscal It is my pleasure to present the Annual Report of the Nigeria Sovereign Investment Report Investment the Annual present to of the Nigeria Sovereign pleasure It is my 2018. 31 December year ended the financial for Authority) (NSIA or the Authority a positive maintained we of the year, the course report to over that I am delighted and successes milestones significant of performance and achieved record track outperformedfunds mandate their three all funds: mandate our all across benchmarks. Chief Executive Officer’s Review Officer’s Executive Chief • Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 9 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Mr Uche Orji Officer and Chief Executive Managing Director NSIA had been managing on behalf of the Nigerian Bulk Electricity Trading Plc (NBET) Plc Nigerian on behalf of the Trading managing NSIA had been Bulk Electricity to the funds returned and investments Authority the relevant The liquidated matured. closing out the NBET thereby fund management mandate. NBET, (PIDF): the Authoritycommenced the Fund Infrastructure Development Presidential which aims of the Presidency PIDF in 2018. PIDF is an initiative operationalisation of of infrastructure projects five key national mechanism for a clear funding provide to years. to seven the nextimportance over five complete plans to which the government the Second Niger the Abuja- Bridge, the Lagos-Ibadan projects are Expressway, These Road. and the East-West Kano Project Mambilla the Road, Hydropower and (FGN), NSIA Government Federal the will be met by the PIDF projects for Funding US$650 the FGN transferred kick-start the PIDF, To third-party NSIA. be raised by capital to the end of 2018. by 50% of which had been invested NSIA, approximately million to Central by the of N325/US$ at the rate first tranche of these funds was exchanged The by NSIA. used now rate Bank of Nigeria exchange which is the effective (CBN), Outlook trade tensions, expect mainly by driven 2019, in market the global volatile remain We to guard to intend We and other headwinds in the macro-economic Brexit environment. short-termagainst volatile market hedge our investment continuing to conditions by years for the next five rolling plan Our portfolio pool of assets. and maintain a diversified infrastructure, and digital internal processes personnel, NSIA’s includes strengthening the on key a methodology for institutionalising projects, progress tangible delivering by contribution the Authoritysystemic of additional capital to and boosting growth and third-partyexpanding our co-investments asset management businesses. Conclusion the President His to gratitude Excellency, sincere like extending conclude by I would my to Muhammadu Republic of Nigeria, President and Commander-in-Chief of the Federal the supportBuhari His (GCFR). vital in propelling leadership, were and confidence Vice the also like thank HisAuthority I would the successes of 2018. to to Excellency, SAN and the Osinbajo (GCON), Yemi Republic Nigeria, of Prof. of the Federal President supportsustained their for Council also has which Economic National the of members been invaluable. Forum, the Chairman to and members of the NigeriaI am also grateful Governors’ in the first and second cabinets other ministers the Honourable Minister of Finance, all played Muhammadu who have Buhari, and co-investors our sponsors President of in partnershipIn addition, I express vital roles with the Authority duringyear. the fiscal their guidance and of NSIA for the members of the Board thanks to profound my Mr his service to Ackermann Hanspeter for I am grateful commitment. In as particular, from NSIA in 2018, retired Officer He the Chief Investment and member of the Board. wish him the very best in his future We servedhaving of his appointment. the tenure out endeavours. work for their hard and staff, on the management team, colleagues I thank my Finally, Together, Authority. Investment the Nigeriaof success the to dedication and Sovereign growth the nextto look forward can with confidence and enthusiasm we of NSIA’s phase and development.

We intend to guard guard to intend We short-term volatile against by conditions market hedge our to continuing portfolio andinvestment a diversified maintain pool of assets. Transforming healthcare - NSIA-LUTH - NSIA-LUTH healthcare Transforming University at the Lagos Centre Cancer Hospital. Teaching Leveraging the latest technology to deliver deliver to technology the latest Leveraging services Nigerians. to healthcare worldclass

FHFL was seeded by NSIA on behalf of the on behalf of NSIA seeded by was FHFL NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Family Homes Funds Limited (FHFL): Limited Funds Homes Family Ministry 2016. A permanent and commenced operations in September of Finance is on a the company believe in 2018, and we hired were CEO and management team long-termblended pool of funds a create to FHFL was designed path. growth strong homes and It affordable the supply of mass housing. provide also seeks to increase to to support aims the company Overmortgages the years, the next families. five for income families. low 500,000 homes for of up to development Development Bank of Nigeria a minorityDevelopment (DBN): NSIA controls stake in DBN on behalf and small micro, to billion N10 year-endof over on-lent had DBN 2018, As FGN. the of financial partners. 50,000 their preferred Over medium enterprises (MSMEs) through institutions as part various microfinance efforts through benefitted of to MSMEs have in the economy. credit unlock access to NSIA founded InfraCredit NSIA founded (InfraCredit): Ltd Company Guarantee Infrastructure Credit of the London- company guarantee in 2017, in partnership a credit with GuarantCo, Infrastructure (PIDG). InfraCredit experienced Development Group based Private Africa Finance during under review. year the and capital increases growth accelerated InfraCredit,in million straight US$25 of combination a in Corporation(AFC) invested Germanthe state-owned bank, development KfW, whilst shares, equitypreference and capital in InfraCredit in 2018. unsecured US$35 million in subordinated, invested 8 Building and operationalising top quality Building and operationalising top Nigeriain medical facilities is challenging. Managed Funds Third-Party Authority of the Debt manage US$100 million in assets on behalf The continues to Account Management Office Stabilisation (DMO). It also manages a portion of the FGN’s assets These a naira-denominated 2015. fund which was established in late (FGN Stab.), of the funds the mandate During the year, policies. investment managed using NSIA’s are in 2018, we committed to investing up to US$20 million in three landmark US$20 million in three to up investing to committed in 2018, we Healthcare: (NLCC) Centre Cancer projects is the NSIA-LUTH One of the sector. projects in the health It Lagos. Idi-Araba, is a US$10 million Hospital (LUTH), Teaching at the Lagos University President by be inaugurated facility and is to which has been completed cancer treatment centres medical diagnostic two other projects are The Muhammadu Buhari in early 2019. Hospital (AKTH), Kano and State, Teaching Kano at the Aminu being developed which are valued at up projects are The in Umuahia, Abia State. (FMCU) Medical Centre the Federal US$5 million each. to NSIA aims to transform Nigerian taking transform by to NSIA aims agriculture Basic Chemical Platform: a value-chain In supporting addition to sector the agriculture view of the sector. has NAIC-NPK Ltd, our subsidiary, the Authority through fertiliser, with inputs such as fertiliserenable to production. In investments make we 2018, decided to upstream The of Morocco. Group ammonia plant with OCP KMT of a 750 began the development in Nigeria, of the project chemicals platform will establish a basic development with the plant. phosphate ammonia plant and a di-Ammonium first phase being an Bridge International Academies (BIA), an NSIA investee company, invests in invests company, Bridge InternationalEducation: (BIA), an NSIA investee Academies chain of schools servingthe largest in Nigeria. communities low-income In partnership public schools and and improving invigorating is BIA governments, state some with 60% 166,800 Nigerianhad over Nigeria’s students as at the end of 2018. Improving adult literacy is vital if the country rate targets. meet its modernisation is to and growth investments voids in infrastructure address financial institutions that Creating Chief Executive Officer’s Review (Continued) Review Officer’s Executive Chief have date to It specialist personnel and knowledge while our investments and, requires the robust detail due to to attention focused required they have small, been relatively in Nigeria medical care improving However, sectoralregulatory and requirements. by investment expand and NSIA is determined to is critical the country’s to future this sector. into international and domestic players can modest investment a even BIA, with our commitment to demonstrated have we As By year-end has 2018, NSIA in the education sector. catalyse dramatic improvements 18% of NIF. invested Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 11 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Developed NSIA Strategic Plan 2019-2023. Plan Developed NSIA Strategic Africa Finance Corporation (AFC) invested US$25 million Corporation (AFC) invested Africa Finance joint ownership. InfraCredit, leading to in NSIA-incubated Return on investment (ROI) in naira terms, for NSIA for (ROI)Return in naira terms, on investment (11.5%); the Future funds: the Stabilisation Fund core (3.3%); the Nigeria InfrastructureGenerations Fund Fund (13.8%). Began implementation of Enterprise Resource Planning Began implementation of EnterprisePlanning Resource (ERP) solution. Made commitment in Project Panda (Novum), a food a food (Novum), Panda Made commitment in Project State. production project, in Nasarawa Began development of the 750 KMT ammonia terminal Began of the 750 KMT development of Morocco. with OCP Group Commenced diagnostic centre projects at Aminu Kano centre diagnostic Commenced Hospital (AKTH), Kano and Federal State, Teaching Abia State. Umuahia (FMCU), Medical Centre Commenced US$10 million Cancer Treatment Centre Centre Treatment US$10 million Cancer Commenced Hospital (LUTH). Teaching project at the Lagos University Invested US$260 million under the PIDF. Project portfolio Project US$260 million under the PIDF. Invested 2nd include Abuja-Kano Lagos-Ibadan Road, Expressway, and Mambilla Road, hydropower. Niger East-West Bridge, Received US$650 million from Federal Government Federal US$650 million from Received Infrastructure manage under the Presidential to (PIDF). Development Fund • • • • • • • • • 2018 • New Cancer Treatment Unit at the Lagos University Teaching UniversityUnit at the Lagos Teaching Treatment New Cancer Hospital. Invested in the Chapel HillInvested Denham Nigeria Infrastructure Debt Fund. Invested in Education sector in Education Invested Bridge Internationalthrough Academies. Over eight million bags of NPK as part20:10:10 produced of the Initiative Fertiliser (PFI). Presidential Additional US$250 million capital Additional injection, by as committed (NEC). Council National Economic Established InfraCredit in partnership (a with GuarantCo part Infrastructure of the Private Group). Second NSIA Board inaugurated. Second NSIA Board • • • • • 2017 • Investing in mechanisation to raise the raise in mechanisation to Investing farm efficiency the of labour and enhance per hectre. production Commenced Presidential Fertiliser Fertiliser Presidential Commenced our Initiative through (PFI) subsidiary NAIC-NPK Ltd. MoU with IthmarSigned Capital investments strategic for Morocco in key sectors of the Nigerian economy. Fund Established an Agriculture of South Fund with UFF Agri of US$200 fund size Africa (target million). Established US$500 million Real with Old Mutual Africa Fund Estate Property Management Company of South Africa. the from approval Received on Privatization National Council (NCP) and the Honourable in invest to Minister of Finance pre-privatisation phase of the Nigeria Exchange. Commodities 2016 • • • • • Fertiliser blending plant inspection by Chief blending plant inspection by Fertiliser Kyari Mallam Abba President, to the of Staff State, Jigawa Governor, and the Executive HE Mohammed Badaru Abubakar. World Bank World Corporation International Finance Ministry Federal of Agriculture and Rural Development Debt Management Office Plc NigeriaTrader Bulk Electricity WB: IFC: FMARD: DMO: NBET: New mandate from FGN to FGN to from New mandate manage 25% of funds accruing to Stabilisation Accounts. the FGN’s MoU and Govt. Ogun with State undertake to Africa Plc Lafarge NeutralityLand Degradation Project. Council Held first Governing (GC) meeting with the National (NEC). Council Economic US$250 million capital Additional NSIA. allocation to for approved III Works Early Completed and advanced negotiation of 2nd for Agreement Concession Niger Bridge. of Nigeria President Vice The for commissioned a task force the establishment of Presidential Infrastructure Development (PIDF) and names NSIA as Fund Manager. Project 2015 • • • • • ED & COO Stella Ojekwe-Onyejeli, Stella ED & COO MD & Chairman, Jide Zeitlin Uche Orji, Board CEO, Omobolanle R. FMoH, PPP and Director Olowu at the NSIA Health Programme Signing. Agreement Nigeria MortgageCompany Refinance MinistryFederal of Finance Housing MinistryWorks, Federal of and Urban Development Bank of NigeriaCentral NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Commenced 2nd NigerCommenced Bridge Project. US$550 million to FGN transferred be managed on behalf of NSIA to NBET and DMO. US$100 million in NSIA invested Third-Party from Seven Energy Managed funds. subsidiary healthcare signs NSIA’s Memorandum of Understanding healthcare (MoU) six federal with the country. institutions across 2014 • • • • 10 NMRC: FMoF: FMWHUD: CBN: Investment Milestones Investment Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 13 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 2018 marked a decade since the start(GFC), a decade since at 2018 marked which of the global financial crisis The economic spectacular in the of financial asset prices. collapse the time resulted of the 1920's. Depression the Great since be the worst to is considered downturn Inflationrooted has also been historically low. remained have rates Since 2008, interest in these suggest that fragility remains Whereas banks. of major central the targets below surpassed prices their pre-crisis have Asset has rebounded. growth the global economy, markets. across levels 3.6% by the International grew to (IMF), the global economy MonetaryAccording Fund in 2017. achieved rate 3.8% GDP growth a 0.2% decline from in 2018, which represents 2.2% in 2017. in 2018, from States 2.9% in the United to strengthened growth However, momentum was attributable productivity the fiscal to gains from growth stronger The into signed Trump Donald and Jobs Act, which President Cuts Tax knownstimulus, the as in December 2017. law a 1.9% in 2018. Japan showed 2.4% in 2017 to declined from in the Eurozone Growth 1.9% in 2017. in 2018, from 0.8% softened to similar pattern as its growth of liquidity the spurts and the persistence surfeitNonetheless, caused by of growth, supported the GFC, have to response central banks in by asset purchases the massive equityThe price in the first half of 2018. However, gains persisted asset price increases. fourth especially in the virtuallythe gains were year, wiped off in the second half of the roiled between China and US the tariffs uncertaintiesas tit-for-tat and Brexit over quarter, global markets. Market Emerging year. 1.8% the previous 1.4% in the UK in 2018, from declined to Growth 4.8% in 2017, due to 4.5% from (DE) also declined to (EM) and Developing Economies and higher importtensions, geopolitical bills. financial conditions, factors such as tighter 6.8% in 2017. 6.6% in 2018, from in China weakened to growth Also, 1.6% in the Middle 0.5% point to declined by East, that growth IMF estimated Regionally, Sub- continued for trend North in 2018. But the upward and Pakistan Africa, Afghanistan 2.9% in 2017 in the 3.1% in 2018, from inched higher to Saharan Africa (SSA). Growth higher commodity by driven in the region. prices and structuralregion, reforms the is despite This at 2.6%. US growth IMF estimates 2019 is tepid. global outlook for The domestic demand and Weaker exportsupside of strong and inventory accumulation. imports – as backlashes exert expected to war with China – are the trade stronger to on growth. pressure downward factors The include area. euro the varietyin A factorsof harm expectedalso is to growth uncertain and weaker-than-expected fiscal outlook on investment demand in Germany, but weaker imports investment and strong in Spain. As weaker domestic demand in Italy, in 2019. 1.3% in the Eurozone weaken to to such, the IMF expects growth anticipated be flat at 0.9% amid an is expected to In markets, Japanese Asian growth to growth further to which also threatens cut China’s sales tax hike, and trade war, 4.1% and 1.9%, are (DE) growth EM and Developing Economies’ for 6.2%. Projections with the previous momentum compared All these highlight weaker growth respectively. in 2018 and domestic political risk of global geopolitics that manifested forces The year. colour the global outlook in 2019. set to in various economies are Funds Management Funds Overview Market

investments three to landmark projects is these One of sector. healthcare the in Lagos the at Centre Cancer NSIA-LUTH the (LUTH), Hospital Teaching University million The Lagos. US$10 Idi-Araba, by inaugurated was facility treatment Muhammadu President Excellency, His Buhari, GCFR, in February 2019. in investment deepen our we as time, Over be expect a we to country the sector, the net-beneficiary of global medical tourism. NSIA committed US$20 million in million US$20 committed NSIA

illness care to provide critical provide to healthcare facilitieshealthcare investing in moderninvesting Making an Impact: Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 15 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Brazil’s main risk in 2019 will come from its inability main risk fiscal consolidation. implement from to in 2019 will come Brazil’s challenges. all significant privatisation are on the 2020 budget and a cap reform, Pension commodity prices the funding and lower In could add to higher US rates Argentina, The recovery. growth postponing raising inflation, and the peso, pressurising needs, the election in Q3 could Also, country missing its fiscal targets. in danger of thus, is, the implementation of the reforms. erode potentially a cloud of geopolitical risk, under remains sanctions US Russian economy The with tighter to a could slow Inflation on the horizon. always to spikegrowth is also set in 2019 and opportunities According the EMs, the headwinds. exist, despite to will continue For crawl. Index has underperformed counterpartValue 22% for its growth by the MSCI EM UBS, to price-to-book Index’s The to a 59% discount ratio of 1x represents years. the last seven UBS also highlights specific opportunities average. in index against a 10-year the growth In in China, a 5%-10% increase stocks. ‘old-economy’ and Chinese Vietnam South Korea, the look for the US and China would likely, is expected in 2019. Quite earnings growth their trade war. ending to least damaging Markets Frontier Markets Markets than Emerging -16.32%, worse returns. In returned 2018, Frontier market frontier drivers market emerging a leading investor, Ashmore, to According mostly at an early stage of are economies These primarilyare domestic in orientation. global financial markets. into structural and hence less integrated development This Markets experience indiscriminate and disproportionateFrontier selling pressure. at particularly access investment to attractive opportunities prices. investors creates for Index Returna had year-endof attractive FM MSCI the 2018, Equityof As more 15.8%, of Return Ashmore. to than the MSCI EM Index’s of Equity of 13.2%, according by outlook is influenced The in 2019. Markets recover to look well-placed Frontier key across markets, implementation of structural dissipation of idiosyncratic reforms attention. single country investor and increased challenges, has programme The and devalued currency. its an IMF programme has completed Egypt reserves FX account balance. and current flows, FDI growth, economic improved led to This prices the volatility impacted of energy the pace of subsidy removal. However, to Central Bank for the the way paving transitory time, over to fade is expected effect expansionarypursue a more monetary policy in 2019. to continue should growth Economic Nigeriacyclical its own recovery. undergoing is The oil production and infrastructure spending. increased pick up in 2019, driven by trajectory in 2018, in partgrowth price was hindered volatility energy and deferral due to election. 2019 presidential decisions until the February of investment 0.82% expansion in 2017. from 1.93%, much improved by GDP grew In 2018, Nigeria’s in than 2.11% recorded better terms, 2.38% in real by In grew Q4 2018, the economy oil global in improvement an by aided largely was number GDP improved The 2017. Q4 exchange foreign in access to prices an improvement volumes; and domestic production was also a boost. 15.4% for most of 2018, declining from trend Headline inflation maintained a downward moderation in inflation was The 11.44% y/y in Decembery/y in December 2018. 2017 to liquidity. FX and improved by base effect influenced Nigeria is undergoing its undergoing is Nigeria recovery. cyclical own growth should Economic 2019. up in pick to continue Uncertainty the poor negotiations also contributed to Brexit over Index) declined World market performance. All (FTSE UK equities performance in its worst 11.5% in dollar terms, by since the European The Europe. raged across fever The Brexit financial crisis. trade rates, market with rising contend US interest had to also Chinese growth. wars and slower registered communications and utilities, such as sectors, Defensive in Q4 2018. But materials and information returns positive performing In among the worst the stocks. were technology UK, as the performed focused-sectors most domestic poorly, uncertainty. political triggered negotiations Brexit protracted withdraw to begin Bank (ECB) is expected to Central European The Economics Bloomberg picks up. stimulus in 2019 as wage growth would Q3 2019, which in expectsrates mini hike a interest in 25bps a probable by and followed the normality corridor, restore further the end of 2019. hike before also see the departure2019 would of Mario Draghi as the head of the Euro the future risks downside for present may This of ECB. ItArea. take hand would is expectedthe helms of that a steady affairs at the ECB. Japan dropped TOPIX The a bear market entered in 2018. Japanese stocks However, its January 22.9% from by a two-year low. peak to good long-term a outlook, have Japanese stocks underpinned by The index is inflation. and improved good corporate governance a represents This UBS. to according valued at 12x trailing earnings, global equities. 15% discount to Prime Shinzo for Minister ahead will be difficult the year However, trying be of face the in would He economy the Abe. steady to in the sales tax. But he and another increase US protectionism complement monetaryto stimulus is set Fiscal has wiggle room. in 2019 could undervalued, Japanese growth Yen the With easing. streak. possibly extend a seven-year to The because of Abenomics. has weakened significantly Yen The currency 30% undervalued is currently its estimated to relative parity inflation normalises power equilibrium (PPP). As purchasing and the Bank of Japan starts monetary discuss withdrawing to 2019 would strengthen. to Yen expect would the we stimulus, which should Olympics, Tokyo the 2020 for also see preparations of support be a source domestic demand. for Markets Emerging and Chinese growth, slower rates, rising interest Concerns over a sell-off marketsthe US-China in emerging in drove trade dispute 37.2% to -14.57% in 2018 compared MSCI EM returned The 2018. Although the transitory. the headwinds are in 2017. However, the country and sentiment towards is slowing Chinese economy trading is China MSCI attractive. are valuations asset its fragile, is P/E of 12x and MSCI ex Japan is just its long-term average below crisis-level price-to-books20% above ratios. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 14 Europe -17.0% in 2018, wiping 50) returned Stoxx (Euro stocks Eurozone the markets rattled by out the 13.6% gain in 2017. European were economies. in key Eurozone growth volatility in Q4 2018 and slow companies for labour markets, difficult it made which Tightening furtherweak productivitygrowth and fill vacant positions, to confidence. investor compounded sagging Investors have more reasons to be concerned to about downside reasons more have Investors while the waning, Trump tax cuts are of the effects The risks. confidence on-going trade war with China will sap investor and curtailthe to is passed on the cost of the tariffs as demand, of higher product prices. consumers in the form The Federal Reserve ended 2018 with the Fed fund base rate base rate fund Reserve ended 2018 with the Fed Federal The a further for 25 basis points (bps) hike room leaves This at 2.5%. to expect the Fed We in 2019, based on market expectation. is at that although unemployment with caution, given proceed Normalisation target. remains below inflation levels, historical low cycleof the rate be gradual. is expected to US assets posted mixed performances in 2018. The S&P was down S&P was down The performances mixed US assets posted in 2018. dollar The in 2017. 18.74% growth 6.2%, a sharp decline from The the 9% decline in 2017. from gained 4.6% in 2018, recovering increased performance in 2018 was driven by of the greenback and turmoilEM the as assets safe-haven increased for demand The dollar is the dollar strength. favoured differentials rates further safe-haven strengthen expected to in 2019 as demand for assets persists. It is expected that US equities will continue to record earningsIt record is expected that US equities will continue to the earnings be impacted by outlook may However, growth. labour-costfreight, and input costs. inflation, higher tariffs, Developed Market Equities Equities Market Developed of America States United Q4 S&P 500’s The in 2018. year volatile US equities had a performance global slowing concerns was -13.5%, due to over Goldman to monetary and tightening According policy. growth Management, Sachs Asset US corporate earnings and margins moderate expected to however, peaked; not theyhave are, and sales growth a combination of slowing due to going forward, headwinds. margin A policy gridlock is expected in Washington D.C. ahead of the ahead D.C. Washington A policy is expected gridlock in election2020 general Democratic as the Party take of the control mid-termelections. 2018 the following Representatives of House OtherIndia, including Argentina, countries, South Africa and The hold major electionsIndonesia scheduled to in 2019. are of key of these elections see the reset outcomes policies and may market implications for stability. have Market Overview (Continued) Market Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 17 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Growth Drivers Growth Only Equity Long long only equityThe portion in a combination It of the asset allocation is 19.2%. is invested market developed The market marketof developed assets. and emerging/frontier the MSCI in US dollar terms -12.02% in 2018, lagging and returned allocation was 7.29% -8.71%. which returned index, World focusing on three by diversification regional this space provide managers in All three While the Europe and Japanese equity markets. US, European regions: main developed outperform still able to they the were returns, managers had negative and Japan focused and underperformed returns US manager had negative the index. However, World MSCI strategy. value its concentrated was mainly due to This the index. in and economic issues brewed Market 2018. Political Emerging equities had a dreadful an escalation of trade also saw second half of the year The Turkey. Brazil and Argentina, between the US and China. tensions asset class had a poor performanceThis 11.9% of the portfolio. EM allocation constituted two new EM manager were there During the year, the year. in 2018, detracting 15.9% for Market Fund. Emerging additions: RWCGSAM and the Core Market Emerging Fund Total Markets Emerging Group in the Capital Authority its investment The also exited Opportunities Fund. Market the MSCI Emerging lagged managers in this component, on aggregate, five The in the two new the timing of the investment could be attributed to This Index 1.33%. by Market Emerging funds. Return Absolute of December Return 19.2% of the FGF. 2018, the Absolute As component constituted Return Index. Total Driven the HFRI Event 7.7% by 6.6% versus allocation returned This earn return, that seek to a positive Managers strategies The class deploy in this asset invest to of marketirrespective managers has the discretion Each of the four direction. times in growth to provide expected and are and geographies strategies different across in equity of stress markets. Blue Mountain the best performer was in 2018 while Arbiter the same period. fund managers detracted over Equity Private component is well This private equityThe FGF in 2018. component made up 15% of the market with a good mix of developed diversified Europe private equity managers from managers. pan-African focused through EM to is additional exposure There and the US (Nigeria and Ghana SME Equity Fund Private in CardinalStone In invested 2018, we II (West fund), and Reverence Equity Africa Fund focused Private fund), Synergy focused increased These investments on the financial industry). II (US fund focused Fund Capital in the US. sectoral diversification increased and Africa footprint West the Authority’s the due to – Abraaj, General (GP) Partners the collapse of one of the Authority’s 2018 saw in the Abraaj NSIA invested funds with other Abraaj monies. commingling of LPs firm’s Africa across ecosystems health build to designed was which Fund, Healthcare Growth and middle-income impact on lower create to populations in these and South Asia diagnostic 17 clinics and 30 at year-end fund had 24 hospitals, 2018, the As regions. An interim pipeline. the in hospitals greenfield and two with two brownfield centres, newa and to assets sought the being manage was GP to appointed was manager the funds going forward. continue managing

US T-Bill Citigroup World Government (Hedged)-US$ Bond Index Bond (Hedged)-US$ Government World Citigroup 50% FTSE® EPRA/NAREIT50% Developed Index/ Estate Real 50% CA Natural Private Resources Benchmark S&P Weighted) GSCI (Equal Weighted Composite Weighted TBD HFR Event-Driven (Total) Index (Total) Event-Driven HFR Cambridge Associates US Private Equity Index Equity Private US Associates Cambridge MSCI Emerging Markets Index Markets Emerging MSCI MSCI World Index World MSCI MSCI All Country World Index Benchmark

5% 5% 5% 5% 10% 10% 25% 25% 15% 10% 85% Target Policy NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Cash Hedging Assets: DeflationHedging Assets: Hard AssetsHard Commodities Commodities Hedging Assets: InflationHedging Assets: Other Diversifiers Absolute Return Absolute Private Equity, VC and value-added Real Estate value-added Real and VC Equity, Private Emerging & Frontier Equities Emerging & Frontier Developed Equities Growth Assets 16 Table 2.1: Target Asset Allocation for FGF for Allocation Asset Target 2.1: Table The asset allocation is based on long-term risk and return objectives, giving consideration giving asset allocation is based on long-term risk objectives, The and return risk is mitigated. This ensures variousasset classes. across diversified and is volatility, to assets the asset allocation is skewed growth to the long-term of the fund, horizon Due to is apportioned rest The inflation hedges (10%) to 85% of the allocation. which account for to these asset to gain exposure and deflation hedges (5%). External used managers are cycle. life classes at this point in NSIA’s In the table below is the FGF’s Strategic Asset Allocation as outlined in its Investment Allocation as outlined in its Investment Asset Strategic In is the FGF’s the table below strategy investment The assets. of allocation best the enabling (IPS), Statement Policy changes in economic and market address and to factors, and updated is reviewed certain to gain exposure the fund to illiquid allows strategy This expectation of returns. short-term reducing volatility impact risk- thereby and achieving stronger asset classes, returns. adjusted The FGF was created by the NSIA Act 2011 and became operational in 2012. the NSIA Act operational 2011 and became by created was FGF The as traditional assets such from ranging number of asset classes, in a fund invests The FGF’s The and private assets – including hedge funds equity. alternative equities to the fund’s guidelines for that provides a strategy approved Committee Investment Board in line with its risk objectives. and return investments, The Future Generations Fund (FGF) Fund Generations Future The Therefore, 20 years. of above horizon an investment has it is a long-termFGF investor; The the effects mitigate To multiple economic and market weather it is expected to cycles. used as a is diversification key risk investment, of volatility and uncertainty on the fund’s objectives. in achieving the investment management tool At its creation, 40% of the Authority’s seed capital was allocated to the FGF. The The the FGF. to allocated was seed capital Authority’s 40% of the its creation, At contributions capital core subsequent applied to was allocation same percentage capital core 30% of future receive 2018, the FGF will effective However, received. NSIA. to contributions Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 19 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Barclays 1-3 Year Treasury Bond Year Barclays 1-3 91-Day Treasury Bill Index Treasury 91-Day Bond Treasury Year 1-3 Barclays Barclays 1-3 Year Corporate Bond Corporate Year 1-3 Barclays Bond Corporate Year 1-3 Barclays Benchmark

25% 75% Policy Target The Stabilisation Fund (SF) Fund Stabilisation The The SF has an allocation of 20% among NSIA’s pool of core funds. It is structured funds. to of core pool among NSIA’s of 20% an allocation SF has The revenues government in serving of stability role for a fundamental a source as play downturn. in times of economic are, assets The macro-economic against act to buffer a as intended is SF stress. The striking conservatively, a balance between a modest generating invested therefore, and preserving return positive capital in nominal terms. of the Minister of Finance, at the discretion the SF can be made from Withdrawals Act. the criteria satisfies set out in the NSIA the request provided Assets Hedge Bonds Treasury US Bills and Treasury US the very to exposure liquid and asset class made up 25.1% of the fund and provided This has a maturity underlyingThe investment Instruments in 2018. Treasury US highly-rated 1.5% in line with the component returned This years. range of between one and three benchmark. Assets Growth Securities Bonds and US Asset-Backed US Corporate and Income Smith Graham & Co + in two Research managers, invested are We Management. One of these managers has a short across that invests duration strategy very high-quality while the other income instruments, US corporate and securitised fixed US corporate in short- bonds. medium-term investment-grade invests to Deposits Structured collateralised Secure instruments made up 45.5% of the fund. these to of year-end 2018, exposure As fulfilling the counterparties, with credible thereby investing sought by were returns capital preservation goal of the fund. in Review Year fund returned The performed well. Fund the Stabilisation Over the course of the year, partlywas This to due 2017. in achieved 3.4% over improvement an was which 5.04%, cash with other funds, As States. in the United environment rate interest the increased part a significant the dynamic marketmanagement formed given of this component environment. 2019 Outlook performance in line with the mandate, the Fund’s Management monitor will continue to tocontinue also will We guidelines. allocation asset strategic the with accordance in and preservationcapital the meeting while fund. the of returns, optimise mandate to ways seek US T-Bill years Treasuries 1-3 US Investment Grade Investment years Bonds 1-3 Corporate Hedge Assets Growth Assets Table 2.2: Target Asset Allocation for SF for Allocation Asset Target 2.2: Table NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 18 2019 Outlook the other-diversifiersIn market gain additional allocating to aim to by 2019, we exposure market and emerging components. return the absolute component and rebalancing make would tactical market changes in developed and seek to We long only equities, harness goal is to The gain further privateequity to opportunistic on an exposure basis. within the dynamic global market returns optimal risk-adjusted environment. Year in Review Year global weak This year. for the returned World -8.7% index MSCI year. a difficult 2018 was over experienced in Q4 2018, as fears performance drawdowns to was due largely the US-China over trade war intensified. and tensions down slowing economic growth Deflation Hedge Deflation For most of 2018, this 43.3% of the FGF. represented deflation hedge allocation The allocation was held in cash and very liquid instruments with both local and foreign to commitments undrawn the deflation hedges are 33% of counterparties. However, 14% of the represent commitments These undrawn private equity and other diversifiers. of the FGF. AUM After a difficult 2017, Jamison Koppenberg, the macro-style commodities manager, the macro-style a difficult 2017,After Jamison commodities manager, Koppenberg, investors. money to closed the fund and returned Inflation Hedges Inflation and Commodities Assets Hard allocated 0.65% with 5%, of allocation target a has FGF the of component Assets Hard The as of year-end 2018. and 3.0% committed Other Diversifiers had 3.8% at 2018 year-end, of 10%. As allocation has a target of the FGF component This had two In managers: Healthcare we this space, and 6.8% committed. been allocated both in their investment were who Fund, Aircraft Regional Royalty and Falko Partners investment (a Canadian LiquidityWhitehorse Fund added we Duringperiods. the year, liquidity purpose in high-qualityThe of this providing vehicle private equity assets). products such as direct to exposure seek managers that provide component is to the aim of seeking with the rest to uncorrelated returns leasing and royalties, lending, of the portfolio. The Future Generations Fund (FGF) (Continued) Fund Generations Future The Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 21 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Ongoing - Rehabilitationof Lagos Ibadan Express. Babban Gona Agreement Signing - NSIA Babban Gona Agreement Gona, million in Babban a US$5.5 Invested in operating company smallholder farmer Northern Nigeria. Other sectors will be addressed as assets under management are enhanced, or if or if Other enhanced, are assets under management as sectorswill be addressed bring NIF looks to private sectors, all opportunitiescompelling Across available. become may such an approach in situations where sectors, government-run to sector efficiencies seeks the government and in cases where attractive investments, add value and make for collaboration with NSIA. Investments Infrastructure Agriculture Ammonia terminal KMT of a 750 the NIF began the development In under review, year the partnershipin Platform Chemicals Basic a of establishment the in 1), (phase OCP the with Other phosphate of this project phases will include a di-Ammonium of Morocco. Group effortThis is part strategy overall an of and likely Plant. a MethanolPlant, Plant, a Urea investment gas industrialisation. growing In promote the coming years, NSIA to by strategy. opportunities will be a key in this area part of NSIA’s Gona, Babban in million US$5 farmersmallholder a company Authority The invested operating in northern Nigeria. which social enterprise, Babban Gona is an innovative networkfarmersa smallholder franchising by mini of for scale of economies creates (TG). Groups Trust called farmer cooperatives, grassroots-level its partnershipNSIA, through with UFF Management incorporated (Mauritius) Limited, is undertakingcompany The the Management Company. the UFF-NAIC Agriculture facility production and processing in Panda, agricultural of a large development of poultry the production which is primarily aimed towards facility, The State. Nasarawa feedstuffs. It includes c1,500 ha of farmland and other grains will cultivate feeds, and fish Development plans include the and an existing mill. beans, and soya cultivating maize for the construction and the of a newexpansion of the existing mill, industrial compound, will allow This construction of living quarters the management team. accommodate to production processes. streamlined better in production and for increase an overall for continued the NAIC-NPK Limited, its wholly-owned in 2018, NSIA through SPV, Also, project is aimed at The Initiative (PFI). Fertiliser implementation of the Presidential high- and consistently quantities of affordable commercially-significant delivering of farming local production products, has bolstered project The quality NPK 20:10:10. the local fertiliserwhile simultaneously reviving blending industry making and fertiliser Nigerian to available cost. farmers at reduced (PIDF) Fund Infrastructure Development Presidential the management of the Muhammadu Buhari approved In 2018, President February of the execution accelerate NSIA to by Infrastructure Development Fund Presidential certain the rapid growth essential to that are infrastructure projects critical and strategic economy. and modernisation of Nigeria’s the capital for investment NSIA, will attract managed by and aggregate PIDF, The (i) Lagos-Ibadaninfrastructure projects: five Expressway, of the following development (v) and Niger2nd (ii) Project, Abuja-Kano(iii) Bridge, (iv) Mambilla Road, Hydro-Power Road. East-West In (NEC) Council May National Economic 2018, the of US$650 authorised the transfer the first instalment of the NSIA, forming the NLNG dividends account to million from supervision a robust established NSIA and plan contributionPIDF. to Government’s compliance with its to ensure international and local financial advisors deployed 2nd Niger-Bridge and in Lagos-Ibadan Expressway, and made investments standards Abuja-Kano Road. Focus Sectors Focus Sectors of Interest

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R a e NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA The Nigeria Infrastructure Fund (NIF) Fund Nigeria Infrastructure The 20 The Nigeria Infrastructure Fund (NIF) Fund Nigeria Infrastructure The The fund is in its fifth year of strategic investment in key sectors of the economy. In in key sectors investment economy. of the fund is in its fifth strategic year of The rolling five-year identified as early the as 2013, when sectorswere 15 investible total, of initial areas core the Out of the sectors, plan was developed. infrastructure investment and gas industrialisation. motorways, power healthcare, agriculture, remained have focus The NIF focuses on domestic infrastructure investments that meet the following meet the following that investments infrastructure on domestic focuses NIF The commercial attractive for priorities; potential with national alignment criteria: four private social impact; and high returns ability attract both domestic and foreign to sector participation;regulatory with the sectoral environment. alignment and focus strong on the Authority’s based in projects, a leading role NSIA often plays and management. execution solutions, on innovative Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 23 Academies Healthcare Fund Healthcare ridge International FAFIN Novum Crest Argo Crest orno ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Active Regions Active Closed Transactions Presidential Fertiliser Initiative Fertiliser Presidential

Nationwide projects Nationwide InfrastructurePresidential Development (PIDF)Fund Company Mortgage Refinancing Nigeria NigeriaCHD Infrastructure Debt Fund (NIDF) MTN Nigeria Adamaa Yoe Gome Taraa Centre os auchi FMCU Diagnostic Diagnostic FMCU igaa enue aan Gona River Cross ano Eoni Nasaraa FAFIN Iom Aka aduna Aia Centre td Centre atsina Enugu ATH Diagnostic FCT Imo Aua

L&Z Integrated Farms L&Z Integrated Anamra Rivers ogi Seven Energ Seven amara Delta Edo aelsa Niger Ekiti Sokoto Ondo ara Osun ei Oo Ogun agos LUTH FAFIN FAFIN DAA Viathan InraCredit Academies Cancer Centre Cancer Danlee Farms Danlee ridge International Healthcare Development Investment and Healthcare NSIA Insubsidiary, its through NSIA 2018, (NHDIC), undertakeCompany continued to and centres of diagnostic the development country. the hospitals across be co-located to facilities within federal specialist healthcare Treatment AuthorityThe concluded the construction commenced and Cancer phase of its Structured under a Hospital (LUTH). Teaching project at the Lagos University Centre the project is a public-private partnership (PPP) arrangement between NSIA and LUTH, of an existing equipping and operation the rehabilitation, for US$10 million investment and advanced radiotherapy facilityThe will provide co-located in LUTH. cancer centre services treatment chemotherapy patients. to (US$5.5 million each) the constructionNHDIC also commenced centres of diagnostic (AKTH) Hospital in Kano and at the State, Teaching co-located be to at the Aminu Kano is completion of both centres The Abia State. in Umuahia (FMCU) Medical Centre Federal Q3 2019. for estimated ImpactGeographic Spread orno Presidential Fertiliser Initiative (PFI): Initiative Fertiliser Presidential the delivery of for a programme quantities commercially-significant high- consistently and affordable of quality NPK 20:10:10 fertiliser the at Nigerian farmers. time to right of 16 blending plants across a total date, To five over Nigeria been resuscitated; have million 50 kg being supplied NPK bags are the market.to Babban Gona: a US$5 million that in a company investment 4,200 approximately franchises and Groups Trust grassroots-level across 21,000 small-holder farmers, 14,000 hectares of land. Adamaa Yoe Gome Taraa os auchi igaa enue River Cross ano Eoni Nasaraa

Iom

Aka aduna Aia atsina Enugu FCT

Imo

Aua Anamra Rivers ogi amara Edo Delta InfraCredit: a specialised financial InfraCredit: (capitalised US$100 with guarantor provide million), established to credit the enhance to guarantees quality of local currency infrastructure debt instruments. transformational project is a potentially The US$1.2 up to catalyse expected to initiative (pension capital billion in institutional the funds/insurance companies), towards financing of infrastructure projects. an Academies: Bridge International chain of in the largest investment serving schoolsAfrica, in low-income communities. taking is now and company The over under education systems State improving a new PPP model and educating 166,800 Nigerian students in 2018. aelsa Niger Ekiti Sokoto Ondo ara Osun ei Oo Ogun agos NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 22 The financing of these projects has the financing of these projects The between yield anywhere to potential new886,000 and 394,000 and direct Nigerians. indirect jobs for Presidential Infrastructure Development Infrastructure Presidential critical and strategic (PIDF): five Fund across projectsinfrastructure situated being managed currently the country are NSIA. by The projects will provide much-needed projects will provide The services treatment diagnostics/cancer c175,000 patients visits annually and to 100 healthcare over training for provide professionals. LUTH, AKTH and FMCU Health Health AKTH and FMCU LUTH, million US$20 combined a Projects: maintain equip, build, to investment a modernoutpatient and operate in Lagos and centre treatment cancer diagnostic facilities in Kano and Abia states. Development Impact - 2018 Spread Development The Nigeria Infrastructure Fund (NIF) (Continued) (NIF) Fund Nigeria Infrastructure The Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 25 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Fund Management Agreement signing ceremony between NSIA and NBET back in 2014. signing ceremony Management Agreement Fund Debt Management Office (DMO) Office Debt Management fund the a US$200 million manager for as the investment was appointed NSIA PIDF, managing to Prior fund was partThe of the projects. and power-related in gas-to-power earmarkedgovernment investment for By the DMO in July 2013. the through Government the Federal issued by Eurobond the $1 billion from proceeds the balance of The it placed with NSIA. the US$200 million US$100 million from recalled end of 2017, the DMO the Authority. capital is still being actively managed by that of the Nigeria mirrors Infrastructure Fund. the DMO Fund to policy investment regard with NSIA’s Plc (NBET) Trader Nigerian Bulk Electricity electricity the administers and Government that manages an agency the pool in In of the Federal 2014, NBET, fund management The Nigerian NSIA. electricity by management million for US$350 allocated supply industry, NBETto the funds back quarter second of the end at the expired fully transferred mandate and NSIA has of 2018 along with all the income earned NBET. due to Fund. the Stabilisation for strategy investment NSIA’s with accordance in NBET the Authority The Fund invested Authority balance NBET’sThe aimed to short-term and above-average returns of the fund, liquidity safety needs, benchmark NBET. set by

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Completed Piers of the 2nd Niger Bridge - View from the Western Approach. the Western Niger Bridge - View of the 2nd from Piers Completed 24 As of year-end 2018, NSIA has invested US$260 million of the Fund. The PIDF currently PIDF currently The Fund. US$260 million of the of year-end 2018, NSIA has invested As the Abuja-Kano are These Lagos- Road, project. one power projects and road four covers and Mambilla Road, hydropower. 2nd Niger East-West Bridge, Ibadan Expressway, Presidential Infrastructure Development Fund Development Infrastructure Presidential investment in 2018 as the fund and the government Authority by The was appointed (PIDF). In 2018, the Infrastructure Development Fund Presidential the manager for for US$650 million as the first tranche of funding under PIDF released government NSIA. by investment NSIA has proven expertise in investment and fund management fund management and expertise in investment proven NSIA has quite been has Authority The markets. and global the domestic across funds. of its core and management with the investment successful capacityto successfully manage third-partyNSIA has significant on the based funds, AuthorityThe is also actively projects for developing funds. core its three for strategies Under Management Assets (AUM). its total as partco-investment, growing of the plan for Third-Party Managed Funds Third-Party for it. Based on the each third-party that is suitable specific strategy NSIA deploys fund, For Stabilisation that of the similar to is usually strategy the investment individual mandate, (NIF) – Nigeria (FGF), or the Infrastructure Generations Fund Fund the Future (SF), Fund capital is allocated. core NSIA’s which funds into the three Its investment strategies and risk management framework have preserved its have framework and risk management strategies Its investment NSIA is of investing. in its six years returns above-average capital and earned its portfolio leveraging of third-partya growing management, building for funds and fund manager. as a savvy reputation investment growing Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 27 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL NSIA recognises its employees as a critical resource in delivering the Authority’s the Authority’s in delivering as a critical resource its employees NSIA recognises outperforming quality for is essential of our people on our The mandate. NSIA Therefore, as enabling sustainable growth. as well strategy corporate Our employees. its of skillslearning and development continuous promotes for an atmosphere and engenders the spirit of excellence environment work collaboration. In namely discipline, 2018, our HR objective at deepening our corporate aimed values, the fabric values constitute of our organisational These transparency and integrity. culture. increase to designed that were executed, were a number of initiatives During the year, as diversity build leadership skills, and inclusion, as well personnel aptitude, entrench job enrichment. foster NSIA & People verymakeroles and for specific measurable contributions the to recruited are Employees performance objectivesannual overall Authority’s the understand people Our NSIA. of connecting the their daily output to their execution, and take personal responsibility for of the expectedachievement outcomes. within and freedom innovation supports expression, work environment creative NSIA’s new break to employees our empowering Beyond operation. of frame institution’s the or task, with each project amongst collaboration productive encourage ground we teams. and across employees capacityto employee improving towards resources of levels NSIA commits significant recognise We development. career leadership capabilities and overall on the job, deliver in the learning and skills abilities work and with the difference of individual employees Authoritythe invests Thus, learning journey. appropriate an create to them of one each as and and functionalin personal areas, needs, employees’ its meet that programmes in individuals or teams. each employee. training for of 80 hours of classroom In an average 2018, NSIA achieved AuthorityThe its Employee achieved the year. for with the target is consistent This Satisfaction staff attrition Rating, while was less than 4%. rate leaders seeking pool of future in building a diverse careers to NSIA is committed in Apartinvesting fields. from related finance and other infrastructure investments, internship opportunitiesfor we provide of our staff, development the professional practical knowledge acquire them enable to students postgraduate and undergraduate a wide range of opportunities offers internship programme The and work experience. and projects investment operations, NSIA’s into insight gain to these students for We expect that the interventions. development In 2018, five Nigerians interned at NSIA. capitalise on the experience get on a them at NSIA, would to likeinterns, those before track.good career Corporate Governance Corporate Technology and Diversity Culture, Our People,

NSIA takes a long-term approach to investments investments to approach a long-term takes NSIA in agriculture. and NSIA Old Mutual, through its agriculture managers investment African UFF Agri million US$25 committed have (UFF), Investments ineach investment large-scale towards agriculture in schemes, out-grower with projects, combined food security employment, facilitate that areas in million US$5.5 Invested importand substitution. farmers scheme for smallholder out-grower an hectres 14,000 covering of land and committed for Fund million US100 the to million US$10 in inAgricultural Nigeria Finance (FAFIN) Bank Development German the with partnership (KfW) and the Federal Ministry of Agriculture and (FMARD). Development Rural

expertise and nurture of local import substitution job creation, enablejob creation, agriculture to drive to agriculture investing in investing Making an Impact: Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 0 29 46% 0 31% 0 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL An improved gender balance at the gender balance An improved close of 2019. Authority introducing The is gradually encourage to programmes fuel of Generation Z to onboarding and enhance output for innovation the future. 20 Male Female 15% 10 8% 31% 69% 0 Ratio Of Male To Female Employees Female To RatioOf Male Of Employees Profile Age 2018 Initiatives NSIA people, strengthen in 2018 to initiatives Authority several The implemented Satisfaction employee Survey, include an Employee These and diversity policies. culture the NSIA Female approved and the Board leadership series, engagement programmes, Network. Job Satisfaction with a private sector institution, which operates ethos. investment NSIA is a premier the call of work beyond is the guiding principle our people to This that motivates that means also This corporateand goals. mandate dutyachievingin Authority’s the their professional promoting its employees, the Authority to is deeply committed and wellbeing. balance sustainable work-life development, In Satisfaction conducted survey an Employee 2018, we by which was administered The and human performance execution a strategy consulting company. Pendaxia, to identify areas helped have feedback that and offered generally positive were results efficiency, promote in our working expected to which are of improvement conditions, productivity in 2019 and beyond. and loyalty in our employees Engagement Employee and themselves among engage to staff all for avenues broadening consistently is NSIA keep is to our engagement strategies essence of our employee The with Management. a number of new In introduced 2018, we and involved. productive people motivated, Hunt Painting/Talent featuring Week, Employee conventional our held also and initiatives Gift Exchange. Year-End Night and 200 10 10 10 Leadership is committed to promoting a promoting to is committed Leadership results. that deliver values of shared culture Diversity is an integral component of our component Diversity is an integral people strategy. of a vital component constitutes Learning during a - Staff and guests, NSIA culture Koyinsola Series with Prof. lecture Leadership Ajayi (SAN), Managing Partners at Olaniwun Ajayi LP. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 28 Supporting the Employee paid for provisions have We employees. female HR policy towards is considerate NSIA’s in the NSIA workplace. women Male for developed systems and care maternity leave the institution With these benefits, paid paternity leave. also afforded members of staff are supportseeks to of the workplace. outside its employees NSIA maintains a practice and equal opportunity of equal pay and similar roles for performance of gender. irrespective Equal OpportunityEqual a transparent through our employees recruit We NSIA is an equal-opportunity employer. is not a consideration profiling Demographic on results. is purely and reward process system. as the Authority recruitment a merit-based employs in the manning strategy, a pre-defined ability deliver to mostly on the perceived is recruited Each NSIA employee outcome. This philosophy helps in fostering a merit-based and inclusive environment where where environment and inclusive a merit-based helps in fostering philosophy This work as a skills cultural backgrounds individuals with diverse diverse and from different that also aware are We our corporate targets. and achieve our mandate promote to team diversity the key is a sustainable future. to NSIA & Diversity We practice inclusivity management and staff. its Board, NSIA maintains diversity across nationality, gender, age, in ethnicity, differences of, and appreciation respect for, through these differentiating of of discrimination against any all forms prohibit We and religion. consider workplace as we identities even employee diversity a critical plank for engagement. The majority of our pioneer employees have remained at the Authority. This has helped This at the Authority. remained majorityThe have of our pioneer employees which attracts and culture, this leverage to continue We deepen the brand culture. to best-in-classretains the Authority talent and distinguishes as a world-class organisation. NSIA’s brand culture, in combination with our corporate philosophy, defines what we call defines what with our corporate in combination philosophy, brand culture, NSIA’s and imbibe Way Everyunderstand the NSIA to is expected staff member Way.’ ‘NSIA the our individual and as attitudes as well values, the critical that guide our shared behaviours collective performances. Our brand culture has six dimensions: i) Reliable Professional, ii) Trusted Champion, iii) Champion, Trusted ii) six dimensions: i) Reliable has Professional, Our brand culture Achiever. and vi) Passionate Creator, Value v) iv) Informed Partner, Innovator, Competent work,fourthwe how and about the third are we are, who first and second address The people see us. to how and the fifth and sixthrelate NSIA & Culture a generation.’ beyond ‘Building an enduringlegacy, is brand culture of our theme The three The performanceto sustainable economic reflects our commitment This of Nigeria. (FGF) and the Generations Fund (SF), the Future Stabilisation Fund funds of NSIA, the core achieving this objective. for our vehicles (NIF), are Nigeria Infrastructure Fund Our People, Culture, Diversity and Technology (Continued) Technology and Diversity Culture, Our People, Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 31 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Technology Technology corporateinvestment and of critical adoption is importance NSIA's to Technology its in digitising the Authority substantial investments made this reason, For strategies. to employees our enabled investments These non-coreand functions core 2018. in perform optimally. more cost-efficiency, improve its processes, streamline to technology digital NSIA is leveraging Inproductivity funds. and optimally manage its increase early commenced we 2018, record to related our back-office of automating those functions, especially the process Our hitherto and personnel management. accounting, paper-based maintenance, collaboration improve to revamped was site intranet The automated. now are processes conducted now through Basic operational activities are among staff. and communication on the ERP application. paperless procedures was also embarked of our document filing system review digitisation The upon in the retrieving of way and most effective archiving of most durable way the period provide to and tracking of access to enhance ease help This will copy of hard our files. and organising technology adoption-drive Among the benefits of our documents. is the strengthening Inrecurringour audit and reporting of NSIA expectslong-run, the reduce processes. to costs. made in the by NSIA in 2018 was the investment attained milestone A significant in invest decision to The (ERP) solution. of an Enterprise Planning Resource procurement the next strive as we phase of our evolution for an ERP solution is in line with our strategy it will benefits of the ERP system, Amongst the many attain operational excellence. to cross- improve of our processes; many and integrate automate streamline, us to enable functional collaboration and operational efficiency; operational embed and enforce reports.analyse and is benefit Another swiftly and generate accurately and controls; portfolio of of our growing and management that it will optimise the development Implementation projects. in infrastructure of the ERP solution is expected to investments mid-2019. by be completed disaster its of implementation the commenced NSIA Incontinuity, business termsof Authority will enable the process The recovery in line with its Business Continuity Plan. site recoveryThe disruption or disaster. of an unforeseen in the event adequately recover to IT security of such occurrences. in the event NSIA’s foster to has been designed system In line with the year. throughout and secure safe were IT infrastructure and systems NSIA’s no incident of cyberattack was experiencedour targets, the Authority by in 2018.

NSIA is leveraging digital digital leveraging is NSIA streamline to technology improve processes, its cost-efficiency, increase optimally and productivity funds. its manage NSIA continually invests in information invests NSIA continually as an enabler for operational technology excellence. Go Karting - All members of staff unwind Week. during the Annual Employee Talent Day - Beyond professional Talent creative NSIA encourages competence, expression. The Authority celebrates its people in ways its people in ways AuthorityThe celebrates professionalism. that reinforces NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 31% of total employees employees 31% of total 37.5% of management positions Management. 33% of Executive This bite-sized learning programme was introduced in 2018. Lunch in 2018. Lunch was introduced bite-sizedThis learning programme Learn: and Lunch We quarterly be squeezed to periods. one of the lunch was introduced into and Learn inter-personal develop to sessions enabled employees The sessions in 2018. held four skills about an hour and half and and enhance their knowledge. for Each session lasted fielded at the end of each session. were Questions an NSIA staff. was led by during our annual Employee Week in the year under review, NSIA’s NSIA’s under review, in the year Week during our annual Employee Week: Employee and mental in variousstaff engaged physical to enhance their activities designed week-long The management. financial personal on sessions also held We strength. activities in an end-of-year party culminated other stakeholders. invited which we to In the course of Oscars." The Night at Our 2018 end-of-year party was tagged "A and for their contributionto the organisation recognised duly were staff the event, some and Directors Executive NSIA’s keycommitment to within the year. initiatives in also given Moving citations were the awardees. plaques to special guests presented recognised. so were honour of staff who As of 31 December, 2018, our female staff constituted: staff constituted: 2018, our female of 31 December, As (a) (b) (c) The first event was geared towards effective management of the work-life-balance of management of the effective towards was geared first The event her perspective on the subject Mrs (SAN) offered Olabisi Soyebo employees. female NSIA’s provided Wigwe while Mrs. Dupe professionals female to balance as it relates of work life one-on-one their to achieve members of staff at enabling female counselling targeted full potential. In two the network in which members of events two 2018, NFN organised female hosted various comprising and a counsellor and they issues explored a lawyer professionals of the women. and personal development pertaining the professional to NSIA Female Network NSIA Female female for a platform Network provide to in 2017 (NFN) was established Female NSIA The platform The development. personal and professional their advance to employees to employees of female opportunities mentorship provide for continues to and tools within the Authority. leadership roles help them assume future of the Authority and in the in the growth play women the critical role NSIA recognises AuthorityThe supports achieve NFN in helping to accomplishment of our mandate. and girls to women Sustainable Development empower Goal to (SDG) 5, which aims their full potential. reach E-Repository in 2018 a repository was developed an online platform of learning create materials, To for professional staff by attended and other events training from which resources to staff E-RepositoryThe for platform serves as a reference can be uploaded. development It is expectedthat these learning access a wide array of resources. and consultants to will enhance our knowledge sharing the resources and capacity across development Authority. Leadership Series Leadership encourage employees Series to was introduced Leadership in 2018, the NSIA Created full their reach to people its helping skills.to committed is NSIA requisite develop to an opportunity provide NSIA employees to is designed for programme The potential. notable business leaders in the Nigerian meet and learnto from corporate world. for invited was LP, at Olaniwun Ajayi SAN, Managing Partner Konyinsola Ajayi, Professor the inaugural session. 30 Our People, Culture, Diversity and Technology (Continued) Technology and Diversity Culture, Our People, Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 33 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL All 36 State Governors; All 36 State (FCT);Territory Capital Honourable MinisterThe of the Federal Honourable MinisterThe of Finance; Attorney General of the Federation; Bank of Nigeria of Central Governor The (CBN); the President; to Adviser Chief Economic The and Commission; Chairman,The Revenue Mobilisation, Allocation and Fiscal of the on the recommendation the President 12 Members by of the public appointed Honourable Minister of Finance. His Excellency, the President of the Federal Republic of Nigeria (who may be represented Republic of Nigeria be represented (who may the Federal of the President His Excellency, President); Vice the Hisby Excellency, Code of Conduct Code RiskCompliance Management Framework Policy Communications Ethics Policy Principles of Ethical Investment Statements Subsidiary Governance Framework Whistle-blowing Policy The Governing Council is charged with the responsibility of raising questions on the is charged Council Governing The operations and performancegiving guidance and of NSIA, obtaining clarifications and while observing the Board, and Management.counsel to Board the independence of the the publication of the holds its annual meetings following Governing Council The the year. for Statements Financial • • • • • • • • The Communications policy and Staff Handbook regulate employee relations with both policy employee Communications regulate The and Staff Handbook determination of the Authority’s indicator is a strong This internal and external parties. at all times in their business practices. professional remain that its employees ensure to discourse is of openness in which healthy culture AuthorityThe entrenched also has an report activities. to mandated improper are encouraged and employees Framework Governance its discharge effectively to under a framework that enables the Board NSIA is governed the Additionally, the Authority. direction to strategic functions while providing oversight the across of corporate governance ensuring high standards for is responsible Board corporate governance that effective recognises Board The Authority and its subsidiaries. of NSIA Board In this regard, mandate. is a key achieving the Authority’s to imperative The and its Committees. Board of the Charter and procedures sets out the roles Directors’ charters also have various guiding their activities. Committees We and practices continually evolving. policies corporate governance are NSIA’s with global best practices align periodically and in accordance to the policies review with Nigerian laws. Council Governing of the Board counsel to of NSIA and gives Body’ ‘Advisory is the Governing Council The consists of: Council The Directors. • Code of Corporate Governance Governance of Corporate Code with global periodically align to Governance is reviewed of Corporate Code NSIA’s values to its core best practices. Complementary the Authority promotes the Code, to the following: through employees • • • • • • •

NSIA's corporate governance governance corporate NSIA's policies and practices evolving. continually are review periodically We with align to policies the and practices best global with in accordance laws. Nigerian NSIA upholds world-class NSIA of aspects all in standards governance, corporate oversight, Board including strict and management, risk guidelines.operational Internal Auditor Financial Controller Financial Senior Vice Senior Vice President Executive Director Executive Chief Operating OfficerChief Operating 9 member Board 56 member Council Board of Directors Board Governing Council Governing Managing Director Managing Senior Vice Senior Vice President Chief Executive Officer Chief Executive General Counsel & Head, Legal & Head, General Counsel NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Executive Director Executive Secretary to the Authority Chief Officer, NIF Subsidiaries Chief Officer, Senior Vice Senior Vice President Head, Human Resources Head, 32 Figure 3.2 depicts the governance structure of NSIA 3.2 depicts the governance Figure NSIA is a member of the International Forum of Sovereign Wealth Funds (IFSWF) and a and (IFSWF) Funds Wealth Sovereign of Internationalthe member of a is NSIA Forum good subscribe the ethos of transparency, to We signatory the Santiago Principles. to In practices. accountability established 2017, we and prudent investment governance, further to a web-based platform our accountabilitywhistleblowing system. strengthen NSIA is run along the best commercial principles the to and philosophies applicable best commercial NSIA is run along the practices operational efficiency Our governance strengthen and drive private sector. transparency and of integrity, values core Our organisation. the across effectiveness Way drive the NSIA helping to underpindiscipline continue to our corporate behaviour, organisation. the entire across NSIA upholds world-class including in all aspects of corporate standards governance, risk and strict management, oversight, NSIA engages in Board operational guidelines. active monitoring and evaluation of the performances portfolios and of its investment returns on social and environmental economic, financial, achieve aim to We people. investment. Corporate Governance Governance Corporate been has it started performance of NSIA since strong operations, consistently The have We best practices. governance corporate to our adherence underpinned by all our to optimal value deliver structure to governance our corporate designed stakeholders. Governance Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 35 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL ED, Aminu Umar-Sadiq; MD & CEO, Uche Orji and ED & COO, Stella Ojekwe-Onyejeli Stella fielding Uche Orji and ED & COO, & CEO, MD Aminu Umar-Sadiq; ED, Briefing. the Media at an NSIA Press questions from Other powers reserved for the Board are the determination of Board structure, succession structure, the determination of Board are Other the Board reserved for powers remuneration of subsidiaries;of establishment management, senior approval for planning policy and packages staff;for and other directors Director appointment of the Managing Corporate process; Evaluation Performance Board of the of subsidiaries; approval framework;governance of the performance review of the Managing and Executive including Enterprise-wide of policy issues, approval on significant documents Directors; Corporate Communications, Human Resources, Risk Finance, Management, Investments, of importance of all matters the AuthorityGovernance; and approval to as a whole reputational implications or consequences. or risk financial, because of their strategic, Executive and Chief Roles of the Chairman one individual can and no separate are of the Chairman and Chief Executive roles The lead and manage the is to main responsibility Chairman’s The combine the two positions. regulatory and legal its discharges fully and effectively operates it that ensure to Board accurate, ensuring receive Directors that for ChairmanThe is responsible responsibilities. take and provide decisions to informed enabling the Board timely and clear information, effective ChairmanThe also promotes the success of the Authority. promote advice to and Non-Executive and open communications between the Executive relationships both inside and outside the Boardroom. Directors, the day-to-day the for management of responsibility the delegated has Board The who is supported bytwo Officer, and Chief Executive Authority the Managing Director to Directors. Executive with him in accordance to delegated the powers executes Managing Director The Management is accountable to Executive of Directors. the Board by guidelines approved Board The and policies. and implementation of strategies the development for the Board other matter concernany and performance, of strategic Group matters reviews regularly as material. it regards Alh. Bello Maccodo and Ms. Halima Buba and Ms. Alh. Bello Maccodo ceremony. commissioning during the NLCC Mr. Asue Ighodalo and Mr. U.K. both Asue Ighodalo and Mr. Eke, Mr. inspection in during a project NSIA NEDs, Lagos. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 34 Powers reserved for the Board include the approval of quarterly, half-yearly and full- half-yearly of quarterly, include the approval the Board reserved for Powers change significant and any or unaudited) (whether audited financial statements year approval of also reserves Board the power The and/or practices. in accounting policies corporate structure and the determination and the Authority’s major changes to for long-term objectives and policies of the Authority deliver to of the strategic approval medium and short-term plan, and the annual operating and capital strategy, The value. as the appointment as well the Board, by be approved to budget of NSIA are expenditure of Auditors. remuneration and the of Auditors or removal The Board performs its oversight functions through well-structured, planned, and planned, performs Board well-structured, The functions through its oversight also Board The the expertise leveraging by of all the Directors. Committees assigned that management strikes long-term balance betweenensures promoting an appropriate short-termdelivering and In objectives. growth fulfilling its primary the responsibility, the importance of is aware principlesBoard of achieving compliance with governance and economic performance. Responsibilities of the Board aim is The objectives and policies of the Authority. determines the strategic Board The direction within a framework of strategic overall providing long-term value by deliver to and controls. incentives rewards, The Board and its Committees meet quarterly while additional meetings are convened meet quarterly and its Committees convened Board The while additional meetings are Material be taken written of decisions may way between meetings by as required. year ended 31 meetings during held eight December the financial Board The resolutions. 2018. The Board Committees play a pivotal role in NSIA. The Committees work with Committees The in NSIA. role a pivotal play Committees Board The that the Authority performance-driven is efficient, Management ensure to and financially of in the process dialogue is employed it that interactive to see Committees The stable. the policy and set direction for management setting broad guidelines that drive proper basis. Authorityon a regular In addition to the Board’s direct supervisory role, the Board exercises its oversight direct supervisory its oversight exercises the Board In the Board’s role, addition to Externally Committees: Committee; five Managed through Investments responsibilities Committee; & General Purpose Finance Committee; Audit Committee; Direct Investments Committee. and Human Resources and Compensation Our Board is committed to sound and effective corporate governance practices. Since corporate governance sound and effective to is committed Our Board will sustain the balance of policies that has approved the new Board assuming office, Authorityskills, the affairs of the steer in an knowledgeever- to and experience required environment. challenging Board of DirectorsBoard of of the Board Section Act. outlines the roles 2011 etc of the NSIA Establishment 15 responsible shall be of Directors ‘the Board Act that the states Specifically, Directors. the making the attainment of the objects of policies and general of the Authority, for supervisionAuthority of the management and affairs of the and such other functions of the Act.’ other provision any it by upon conferred Governance (Continued) Governance Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 37 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Mrs Stella Ojekwe-Onyejeli Mrs Stella and Director Executive Chief Operating Officer MrsOjekwe-Onyejeli than 20 more brought of financial advisory, risk,years governance management experience NSIA to and controls Board. She joined the Authority in October 2012, as Director a distinguished tenure following and Head of Operational Risk and Control 15 countries she covered where at Barclays, spanning Africa, Middle East and Asia. Mrs Ojekwe-Onyejeli President Vice served as Africa, at and Head of Quality Assurance, Citibank, of the enterprise with direct oversight in 14 countries environment risk and control Africa. across Mrs Ojekwe-Onyejeli is a Chartered Financial a decade at She spent over Accountant. Tax and servicesprofessional firms Arthur Anderson and in NigeriaKPMG and SouthAfrica, providing advisoryfinancial assurance business and services. servesShe currently of on the Boards Company Infrastructure Guarantee Credit (InfraCredit) and BridgeLimited International Academies. Mrs Ojekwe-Onyejeli in holds a first degree Chemistry and an University the of Lagos, from Cranfield School of MBA from Management in of the Kingdom.the United She is also a Fellow Institute of Nigeria. of Chartered Accountants nurturing the Authority become one of to and attracting SWFs, most respected Africa’s the country. into investment direct foreign Mr serves currently Orji of on the Boards Ltd Company Infrastructure Guarantee Credit (InfraCredit), Development Bank of Nigeria (DBN) and Nigeria Mortgage Refinance (NMRC)Company and NG Clearing Ltd. Engineering, Mr(Chemical B.Eng a holds Orji the University of Port Harcourt,obtained from Nigeria, from MBA an also obtained 1990. He in Harvard Business School in 1998. Mr Uche Orji and Managing Director OfficerChief Executive Mr and Orji is the Managing Director Uche Officer Chief Executive of NigeriaSovereign Authority Investment (NSIA). He was appointed of NSIA in 2012 by the pioneer Chief Executive Goodluck Jonathan and reappointed President President termby five-yearanother 2017 in for Muhammadu Buhari. Mr UBS Securities, where joined NSIA from Orji York in the New he was Managing Director then, he Equities Division. Before office of its Securities, at JP Morgan had spent six years from rose he where 2001-2006, from London, Managing to President Vice the position of Division. in the Equities Director Mr also worked Orji at Goldman Sachs Asset 2001. He 1998 to from Management, London, to rose and Associate firmthe joined as an resigning before Director become an Executive Controller he was the Financial in 2001. Earlier, Nigeria; Lagos, and he at Diamond Bank Plc., workedpreviously at Arthur Andersen & Co. Until he assumed his position at NSIA, Mr leading for commentator Orji was a regular and asset management publications. research the advice to strategic He provided management of semiconductor companies Semiconductor Taiwan such as Intel Electronics, Electronics Samsung Manufacturing Company, Instruments. He also co-authored Texas and pieces on the 200 research than more semiconductor as the broader sector as well He advised sectors. investment technology global portfolioseveral management firms and funds (SWFs). wealth sovereign Mr Orji has led the Management of the advisor to become a trusted NSIA to of Nigeria. Government He has Federal many been instrumental in developing of the government, initiatives transformational Initiative and Fertiliser Presidential the including Infrastructure Development the Presidential NSIA. Mr managed by Orji’s which are Fund, visionarysuccess the leadership has inspired of NSIA in the short period of its existence, Mr Jide Zeitlin Directors of Chairman, Board Keffi The of Mr is the Founder Zeitlin Jide on focused group a private investor Group, and financial natural resources sciences, life services in the Middle East and Africa. He is also Officerthe Chairman Executive and Chief of luxury for company brands; the parent Tapestry, and York Kate New Spade York, New Coach than three He brings more Weitzman. Stuart bankingdecades of investment experience to of Directors as Chairman of the Board his role of NSIA. in 1987 Mr joined Goldman Sachs & Co. Zeitlin in 1996. He served become a Partner to and rose as the Global Chief Operating Officerin the bankinginvestment division of the bank until departurehis December in 2005. Hisat career Goldmansenior of number a included Sachs management positions in the investment industrialthe on focused he where division, industries; served he also and healthcare in the Office. Executive Mr serves of Affiliated Zeitlin on the board Inc., and is Chairman Emeritus Managers Group, or has been, a He is, of Amherst College. including Milton boards, member of numerous the Harvard of Business School Board Academy, America, Doris for Duke Teach Dean's Advisors, Medical Montefiore Charitable Foundation, Saint Ann’s Playwrights Horizons, Center, Community. Ground School and Common He also serves of Cogentus as a Director Inc. Pharmaceuticals, as a Representative Mr was nominated Zeitlin of America the United States to of the United Management with Reform, and U.N. for Nations He was a member of the rank of Ambassador. Team Trade and International Economics the tasked the Department with reviewing of the Transition. during the Obama Treasury as the Chairman his appointment to of Prior Mr of NSIA, a member was the Board Zeitlin of the Authority where of the inaugural Board he served as Chairman of the Investments Committee. English, and Economics in BA Mra holds Zeitlin Amherst cum laude from magna graduating from MBA an holds also He 1985. in College obtained in 1987. Harvard University, 3

1 4

2

5 Executive Director, Appointed in February 2019 in February Appointed Director, Executive Director Non Executive Executive Director and Chief Operating Director Executive February 2019 in reappointed Officer, Board of Directors of Directors Board and Chief Executive Managing Director Officer NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

ED & COO: ED & COO: Mrs Ojekwe-Onyejeli, Stella ED & COO Mr Urum Kalu MFR, NED Eke, NED Mr Ighodalo, Asue Mr NED Bello Maccido, NED Laraba Machunga-Disu, Ms Lois Mr Uche Orji, MD & CEO Ms Halima Buba, NED Mr Aminu Umar-Sadiq, ED & CIO Mr Aminu Umar-Sadiq, Mr Chairman, BOD Olajide Zeitlin, 5. NED: 4. ED: • 2. MD & CEO: 3.  1. BOD: • • • • credentials with proven of highly-qualified team This professionals market the highest and globally-tested constitutes experience, and policy governance decision-making at for body responsible NSIA. • 36 • • • The members of NSIA Board of Directors bring a diverse range bring a diverse Directors of Board NSIA of members The of skills an assortment from and competences of relevant members are: The backgrounds. Members of Directors of the Board three the appointment of nine Directors, NSIA Act stipulates The the Board Specifically, Directors. Executive be to are whom of Directors Executive Chairman, three consists of a Non-Executive Officer & Chief Executive andtwo other (Managing Director Directors. Non-Executive and five Directors) Executive Board of DirectorsBoard Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 39 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Ms Lois Laraba Machunga-Disu Laraba Ms Lois and Audit and Chair, Director Non-Executive Committees & General-Purpose Finance energy Machunga-Disu petroleum a is Lois Ms oil 30 years’ economist and analyst with over and gas industry She is the Chief experience. an oil and gas OfficerExecutive of JALZ Energy, servicesconsulting and technical provider. Mrs. at Machunga-Disu 21 years worked for Corporation the Nigerian National Petroleum (NNPC), she held senior management where experiencepositions with and garnered in exploration and production (E&P), and the major management with joint-interest international oil companies (IOCs). Some of the functions for she was responsible at NNPC included budget and long-term in She was also involved planning. strategic the management of large-scale engineering development. in Ms Machunga-Disu has been involved policy reform and governance formulation participation through Presidential, in many Ministerial and private sector Parliamentary, She serves variouscommittees. as adviser to agencies and local international development NGOs. Ms Machunga-Disu holds a BSc in Social Ahmadu BelloUniversity, Science from Diploma in Petroleum Zaria; a Postgraduate UK); and Management Oxford, (CPS, Diploma in Management Science Postgraduate Imperial London. from College, She is a member of the Institute of Petroleum (UK), Nigerian Gas Nigerian Association, and the InternationalChamber of Shippers, (IAEE), Economics Energy for Association amongst others. Mr Bello Maccido Direct and Chair, Director Non-Executive Committee Investments Mr Maccido is an accomplished corporate and post years 31 banker over with investment in the 26 of which were experience, graduate financial services industry. Nigeria at Ecobank He commenced his career the ranks within through rose and steadily Plc the banking industry culminating in his of charge in Director Executive as appointment Bank of NigeriaRetail banking Limited. at First the change in the structure First of the With in company a financial holding to bank Group 2012, Mr Maccido became the subsequently CEO of FBN Holdings Plc. pioneer Group he was also the In the course of his career, Managers pioneer CEO of Legacy Pension a pension FCMB Pension), (now Limited during period which administration company, financial through the company he took operating profitability. to breakeven served times, on the Boards different at He had, Bank of Nigeria Plc First of FBN Holdings Plc, Manager and is Limited and Legacy Pension the Chairman,currently FBNQuest Merchant banking the investment arm of FBN Bank Ltd, Group. of both the Chartered Mr Maccido is a Fellow Institute of Stockbrokers and the Chartered Institute of Bankersof Nigeria. He holds a Law Ahmadu from (LL.B), and two MBAs Degree State Wayne Zaria and Bello University, Michigan, Detroit, USA respectively. University, He is a Barrister (BL) of the Supreme at Law CourtNigeriaof the of Alumnus and an of the Harvard Business Programs Executive Wharton INSEAD School, The Business School, and France Fontainebleau, School, Business Switzerland. Lausanne, IMD, Mr Ighodalo Asue and Chair, Director Non-Executive & Human Resources Compensation Committee partnerMr Ighodalo is a founding Asue of a multi-disciplinary & Ighodalo, Banwo firm law aspects legal advice on numerous of providing Nigeriancorporate and commercial law. Mr in Economics obtained a Degree Ighodalo the University of Ibadanfrom in 1981, a Law School of Economics the London from Degree Science 1984, and was called to in and Political the Nigerian Bar in July 1985. of practice areas are core Mr Ighodalo’s securities and finance, corporateproject and and natural resources, capital markets, energy and banking and acquisitions, mergers and securitisation. Chairman He is the of Sterling He also Mills Plc. Flour and Dangote Bank Plc servesAssurance Ensure of Boards the on Plc, Company Okomu Oil Palm Plc, Company Global Mix Limited, Partners CardinalStone Limited, Technologies Mainstreet Limited, and Fate Christopher Kolade Foundation Foundation. Mr Ighodalo is an alumnus of Georgetown Harvard Aspen Business School, University, Institute where and INSEAD Business School, he has undertaken education executive several programmes. Mr Urum Kalu (UK) Eke, MFR MrKalu (UK) Urum Eke, Externally and Chair, Director Non-Executive Managed Committee Investments KaluUrum Eke Mr. servicesfinancial a is expert servesand currently Managing as Group Non- a also is He Plc. Holdings FBN Director, Nigeriaof Bank First of Director Executive Bank Limited. and FBN Merchant Limited, an Bank Plc, Mr Eke of First joined the Board in 2011 as Executive FBN Holdings Company, he this, Sector to South. Prior Public Director, Businesses, Regional Director, was Executive His prior at Diamond Bank Plc. West Lagos and work experience includes a stint at Deloitte Haskins & Sells International. Mr 35 Ekeover has experience services in financial covering years’ consulting, business assurance, auditing, re-engineering process taxation, capital and market operations. Chartered of the Institute of a Fellow He is of the InstituteBankers of Nigeria, a Fellow Institute of Management Consultants, and Institute of Charteredof Directors, of Nigeria.Accountants he is and business leader, A philanthropist Eke and Chairman K.U. of Elder the Founder an entity set up in 2001 Memorial Foundation, humanitarian aid in Nigeria. provide to He is Brigade Boys’ Council, Lagos State a Patron, RotaryThe of HarrisNigeria Fellow and a Paul Club International. Science Mrfrom Eke BSca holds Political in in He also holds a MBA University of Lagos. Federal from Technology Management Project Owerri.Mr Ekean is Technology, University of Wharton He is Business School. alumnus of of National Honour of Nigeria’s a recipient Republic of the Federal Member of the Order (MFR). Ms Halima Buba Director Non-Executive servicesfinancial a is Buba Ms expert nearly with experience spanning two decades of cognate functionsdiverse in the banking industry. banks, commercial several spanned career Her of Deputy the level to General she rose where Manager she Nigeria, at Ecobank before take to up appointment as a pioneer resigned TAJ Management at member of the Executive Consortium Nigeria Ltd. humanitarian.Ms Buba is a committed at Community Project She serves as Patron Michika.Management Committee, She also Homes and served of Adamawa on the Board Ltd. Savings Ms Buba holds a Bachelor of Science degree University from and a Masters of Administration of the Chartered of Maiduguri. She is a Fellow of Nigeria, and Control Institute of Finance Institute Market of Capital of Nigeria, Registrars & Riskand Institute Management of Loan of Nigeria.honorary an also is She the of member Chartered Institute of Bankers of Nigeria (CIBN) variousand has attended courses. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 38 Board of DirectorsBoard (Continued) He is an Archbishop Desmond Tutu Fellow, a Fellow, Tutu Desmond He is an Archbishop and a Nigeria Initiative Associate Leadership Mandela Washington Fellow. A Bauchi-State academic scholar, Aminu holds academic scholar, A Bauchi-State Engineering in Master'sBachelor's and degrees the University of Oxford. Sciences from Prior to joining NSIA, he workedand to in mergers Prior on the Stanleyacquisitions at Morgan focused He also worked and Utilities sectors. Energy Denhamwith Management, Capital and oil an private-equity and power-focused mining, gas, fund. Since joining NSIA, Mr has led the Umar-Sadiq and management of execution development, critical in the projects domestic infrastructure motorways, real-estate healthcare, agriculture, sectors. and power Mr experience in has significant Umar-Sadiq banking, private equityinvestment and public role at NSIA recent his most including finance, and Vice-President servedhe where Senioras a Deputy Infrastructure. Head, Mr Umar-Sadiq Aminu Director Executive Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 41 Absent

x x Dec 20        x Present  x Nov 15         x Sep 13/14         ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Jul 30 Jul          May 30/31          May 10          Mar 23         

Feb 16          Technology continues to aid governance in NSIA as Directors can join Board Meetings virtually. join Board can in NSIA as Directors aid governance to continues Technology 2018 Board Meeting Schedule Board Attendance 2018 Name Jide Zeitlin Uche Orji Ojekwe-Onyejeli Stella Ackermann Hanspeter UK Eke MFR Ighodalo Asue Maccido Bello Lois Machunga-Disu Halima BubaHalima NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Bello Maccido (Chair) Machunga-Disu Lois Ighodalo Asue Machunga-Disu (Chair) Lois Urum K. MFR Eke, Halima Buba Machunga-Disu (Chair) Lois Urum K. MFR Eke, Halima Buba Ighodalo (Chair) Asue Halima Buba Bello Maccido Urum K. MFR (Chair) Eke, Halima Buba Ighodalo Asue 40 b) Direct Investments Committee Committee Direct Investments b) and implementation strategies policies, in overseeing assists the Board Committee The within the Nigeria domestic infrastructure investment Infrastructureframework for Fund. are: Members of the Committee i) ii) iii) Committee c) Audit respect in responsibilities oversight in fulfilling its Board assists the Committee Audit The and general compliance with internal policies environment internal controls of NSIA’s Its and regulations. members are: as applicable laws as well and procedures i) ii) iii) Committee & General-Purpose d) Finance reporting the accounting and financial in overseeing assists the Board Committee This as the as well policies and practices, operational risk and compliance programmes also actsas the Committee The functionsoperational and administrative of NSIA. Members are: Board. Tenders Authority’s i) ii) iii) Committee & Human Resources e) Compensation responsibility policies of setting oversight in fulfilling its assists the Board Committee The with NSIA’s consistent issues that are and employee the compensation of employees for also extends Governance and to oversight Committee’s The long-term objectives. are: members of the Committee The on behalf of the Board. Nominations responsibilities, i) ii) iii) a) Externally Managed Investments Committee: Committee: a) Externally Managed Investments externally- the for responsibility oversight its fulfilling in Board the assists Committee The strategies processes, investment oversees Committee The of NSIA. managed investments and the Fund the assets under the Stabilisation respect with to and policies employed Its members are: Generations Fund. Future i) ii) iii) A functional Board Committee structure is central to the Board’s ability to provide ability provide to the Board’s to structure is central A functional Committee Board necessary also it was organogram, Authority’s the changes in the Given oversight. were committees new this effect, To structure. Committee Board the realign to follows: as evolved Board Committees Board Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 43 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Risk Overview in Global Risks Developments risk and opportunities. with uncertainty, strewn in 2018 was global economy The with Britain’s geopolitical risks associated of uncertainty major causes The were the mishaps arising from Union (EU), potential the European from withdrawal Trump and Donald President face-offStates of United the administration between with China. tensions and US trade Iran, May her Brexit got Theresa Minister British Prime 20 months of negotiations, After negotiations had been The 25th, 2018. the EU on November by approved agreement Conservativeruling the within Party Brexiteers uncompromising the with fraught, Brexit. ‘no-deal’ as a possible was sometimes interpreted This Brexit. ‘hard’ a pushing for analyses warned the EU without a deal could bring that leaving disastrous But many a no-deal a report to the Bank of England, by scenario According Brexit consequences. to pound the 30%, by fall prices house 7.5%, rise to to to unemployment UK cause could shrink 8% in 2019. crash, and the GDP to by when the UK defeat a crushing suffered May secured Theresa agreement Brexit The parliament the extension twice on it, leading to the withdrawal of held meaningful votes October 29th, 2019 to March the original 31st, 2019. from date of conflict and States between the United 2018 also witnessed fears Iran. In 2018, May of Action Plan the Joint Comprehensive from administration withdrew Trump the with Iran Russia and the UK reached in China, Germany, (JCPOA), the US, France, which on uranium enrichment put a lid Iran, to by was signed ensuring agreement The 2015. with corroboration While Iran insisted, the country nuclear weapon. does not develop the the US wanted other parties that it was keepingby its terms, to the agreement, to that Iran should amongst other provisions, accommodate, to renegotiated agreement activities in the Middle East. ‘destabilising’ its stop sanctions the against the US reinstated of the JCPOA, Iran renegotiation With refusing allies Western between the US and its became a point of disagreement This country. co-opt to the new sanctions. But Iran wanted was in enforcing Trump whom President and substantial militaryrelying on its geo-strategic leverage defiant, capabilities – not in disrupt global oil supply and undermineUS – to with the termsconfrontation of direct in the Middle East. interests Western Risk Management Risk

A US$5 million investment was made by NSIA NSIA by made was investment million A US$5 to (BIA) Academies Bridge International in millions for education of quality the improve a is students. BridgeAcademies Nigerian of largest the and enterprise social for-profit serving income Africa low in schools of chain communities in Africa. and over taking now is The company education State improving is enterprise a new under Nigeria in States across systems educate to aims it billed, and model, PPP 2019. of end by students 281,000 about

Nigerian schools horizon of children in of children horizon and broaden theand broaden opportunities in life generation for generation to equip the nextto Making an Impact: in education investing Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 45 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 2018 witnessed several extreme environmental events. In June, Oman recorded its Inrecorded Oman events. June, extreme environmental several 2018 witnessed record. was a new Asian This of 42.6°C (108.7°F). minimum temperature highest 24-hour 51.3°C (124°F) in Africa, reaching record on highest temperature the Algeria also recorded In between 57 people reportedly July ending and early week one died August, in July. heat waves. taken with severe hospital as Japan contended to than 18,347 were and more Australia also experienced that fires of people. witnessed extensive killed scores Greece precipitation Changing waves. heat coupled with scorching devastating bushfires, in drought and mudslides flooding, extensive rainfall, record-high saw patternsalso lost, of lives hundreds South-east be damaged, of houses to thousands causing Asia, and large-scale Hurricane and involuntary Michael, Hurricane which migration. Florence two the most destructive of were respectively, and Florida, the Carolinas across swept Mangkhut and Hong Kong. the Philippines also ravaged Typhoon storms in US history. risksto include large-scale – defined incident data massive cyberattacks, Technological fraud/theft, infrastructure and networks, of critical and the breakdown information The in 2018. – also held sway advancements consequences of technological adverse study joint A 2017. to relative cyberattacksof number and cost during year, the grew businesses that cost to total that the average Institute and IBM found Ponemon by 2017. to US$3.86 million in 2018, compared 6.4% to rose experienced data breaches Somelarge-scalethe of cyberattacks reported hacking included during year the the of emails and passwords 150 million usernames, in which over database of MyFitnessPal of a malicious Ticketfly 26 million target was the over cyberattack in which stolen. were In 2018, British accessed. illegally Airways August were reported records of its customers’ plane tickets who purchased 380,000 travellers that the personal data of approximately information. card theft The credit full included stolen. app were mobile and website its on hackers access threat, gained of cyberattacks prevalence the underscore as a growing To of the enrollees of 75,000 Records users. 30 million Facebook over of records the to Starwood Also, server. hacked and Medicaid on the HealthCare.gov US Medicare were in a been stolen had information guests’ confirmedto 500 million hotel Hotels that up 2018, the attack dated September in was detected breach the Although data breach. in history. 2014, and is one of the largest back to have to appeared economy global The But 2018 had started optimistic note. on a more In 3.8%. reached the second quarterpicked 2017 when growth of 2018, the up pace by 4%, advancing by with consumer spending 4.1% growth, to accelerated US economy 7.3%. by grew business investment and non-residential the US-China the outlook was dampened by in the second half trade tensions However, the year for worldgrowth output for estimate slashed its IMF the Accordingly, year. the of 2.2% softening to with growth 3.6%. In the advanced economies decelerated to general, 2.4% in 2017. to in 2018, compared in 2018. and Latin American economies also slowed Asian and developing Emerging Sub-Saharan as oil Africa (SSA) experienced a recovery in economic growth However, oil higher oil prices and increased from benefited countries in the region producing production.

were hacked on the on hacked were server. HealthCare.gov To underscore the underscore To cyberattacks of prevalence hackers threat, a growing as records the to gained access Facebook million 30 over of ofusers. 75,000 Records US the of enrollees Medicaid and Medicare NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 44 NSIA NEDs and the Executive Management Team conducting a pre-investment site site a pre-investment conducting Management Team NSIA NEDs and the Executive inspection. Further insights from the WEF Global Risks Report economic risks that (asset the 2018 were from insights Further fiscal geopolitical crises); (terrorist attacks, trades, illicit inflation, deflation, risks bubbles, and governance); of state of mass destruction, failure crisesweapons state or collapse, large-scale and diseases, of infectious spread crises, water crises, societal risks(food global risks. as top no longer regarded involuntary were migration) However, the World Economic Forum’s (WEF) survey of nearly 1,000 global experts and Forum’s Economic World the However, data natural disasters, cyberattacks, decision-makersweather events, identified extreme – as adaptation – in that order change mitigation and of climate fraud or theft, and failure survey The risk perception weapons identified also likely five global the top in 2018. risks change of climate failure natural disasters, of mass destruction, events, extreme weather global crisesrisks with potentially five mitigation and adaptation, and water as the top the most impacts. Apartindustries the the of the Sino-American over dominance from competition for tech war and the others, 5G, among such as artificialrobotics, (AI), future, intelligence risks of deglobalisation, which will pose significant seen to were other geopolitical events and trade. mean diminished integration Another risk of global negative supply shock in 2018 was the emerging cold war between supply shock in 2018 was the emerging Another risk of global negative securitynational Citing concerns, technology. over economies world'sthe two largest and Huawei giants, Chinese tech by produced banned the sale of phones the Pentagon the a bill banning signed InZTE, on US military President the US August, in May. bases pressurised US also The contractors. government by and ZTE technology use of Huawei participating from ban Huawei in their 5G rollouts. allies to Western its But the trade tensions between the US and China, the world’s two largest economies, economies, two largest between and China, the world’s the US tensions But the trade on US$50 tariffs the US imposed negotiation, for as a gambit Perhaps spooked investors. Beijing’s billion worth of Chinese exports 2018. Following in June States the United to an tariffs to impose Trump threatened retaliatory month, in the same tariff measures By last quarter the of Chinese goods. additional US$200 billion of 2018, concerns about tariffby the volatility countries impositions two caused in global equity markets,tit-for-tat year. of the had made in the first half the gains investors eroded which significantly RiskOverview (Continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 47 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Lagos-Ibadan Expressway 2nd Niger Bridge Project Abuja-Kano Expressway Road East-West Project Mambilla Hydro-Power Some physical security risk incidents occurred early in the year. In response, President President In response, securitySome physical risk early occurred incidents the year. in clashes and communal by insurgency, affected states several Buhari, visited March, in families to the condolences His the country. of crises visits offered across other forms the to government his of commitment the of assurance victimsof provided also and security and property of lives included he visited Some in the country. of the states and Zamfara. Yobe Benue, Plateau, Taraba, Despite seeking re-electionreform. Buhari pursue fiscal continued to in 2019, President and IncomeVoluntary Assets Declaration Scheme the extension of the He approved encourage voluntary to of was introduced disclosure VAIDS June 30, 2018. (VAIDS) to the purpose of all outstanding of payment undisclosed assets and income for previously part the was in This taxpayers of number the effortswider the of increase to liabilities. tax curb tax evasion, illicit financial flows. and discourage tax revenue, tax net, increase a new minimum wage was the negotiations for in this regard development A related labour bodies, with organised agreement reached the government in 2018. Before Labour and United Union Congress, Trade comprising the Nigeria Labour Congress, strike, effective on a nationwide all workers proceed directed the unions to Congress, in minimum wage an increase their demand for home press 6, 2018 to November from Federal Government. by the offered N24,000 as opposed to N30,000 N18,000 to from in 2019. effective as the new N30,000 Both minimum wage, parties to agreed later and NSIA in 2018 Economy The in furtherance Government, of its fiscal policy Federal The in that prioritised investment NSIA. PIDF the management of the PIDF by 2018 in February approved infrastructure, of certainhas the aim of accelerating the execution infrastructure critical and strategic modernisationand of the Nigerianrapid growth the for essential are that projects economy. investment. for the country sectors across approved and power in the road were Projects (NEC) Council the National Economic of authorised the initial transfer Consequently, Nigeria the from NSIA $650 million to Account, Liquefied Natural Gas (NLNG) Dividend PIDF. as seed funding for and investment: for development approved were infrastructure projects five following The 1) 2) 3) 4) 5) have tiers of government underlines mandate the confidence that all three PIDF’s The manage major infrastructure projects effectively in the ability continue to of NSIA to followed mandate PIDF The development. and growth economic catalyse to intended Fertiliser manage the Presidential in 2016 to NSIA received mandate another presidential Initiative (PFI) and the $250 million capital contribution the Authority to in 2017. 242 billion for Independent Electoral National for billion 242 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 46 RiskOverview (Continued) The 2019 World Investment Report Data by the United Nations Conference on Trade and Trade on Report Investment World Nations Conference the United Data by 2019 The to that FDI flows Nigeriatotalled $2.0 billion in 2018, shows Development (UNCTAD), The in 2017. achieved the $3.5 billion flows to compared 84% drop an which represents in 2018 on 17.81% and 13.87%, respectively, ASI and market by capitalisation fell NSE’s sentiment. bearish investor A further economic impact negative investors of general elections in Nigeria is that foreign of perception The making commitments. from long-term investment retreat to tend drive a sell-offpolitical risk to also tends in the domestic equity market.Accordingly, the country into (FDI) flows Direct Investment declined in 2018, as did the All- Foreign Index of the NigerianShare (NSE). (ASI) Exchange Stock The nation’s foreign reserves also dropped from circa $48 billion in July 2018 to circa $43 circa to $48 billion in July 2018 circa reserves from also dropped foreign nation’s The Bank of Nigeria Central The use part had to (CBN) of the reserves Octoberbillion by 2018. maintain stabilityto in the value of the naira. On account of the foregoing, the Consumer Price Index (CPI), as recorded by the National the National by Index as recorded Price (CPI), the Consumer of the foregoing, On account Headline in 18 months. the first time 2018 for in August of Statistics (NBS) rose Bureau following the in to 11.23% 11.14% in July from year-on-year marginally rose inflation month. By inflation number further December 2018, the year-on-year to up inched month. 11.28% in the previous 11.44%, from Commission (INEC) to conduct the general elections. These fiscal appropriations, also fiscal appropriations, These (INEC)Commission conduct to elections. the general of the political parties expenditures combined with campaign and their candidates, inflationary in the the quantity and created increased of money in circulation pressure economy. 2018 saw increased fiscal spending on infrastructure projects and budgetary spending on infrastructure projects fiscal increased 2018 saw allocation National The the general elections. of materials for and procurement the organising for of budget the passed Assembly Some of the projects that received government’s attention in 2018 included the Kaduna- attention government’s Some received of the projects that Kano Railway line; Lagos-Kano Railway Mambilla Power Modernization Hydro Project; of Lagos-Ibadan reconstruction and expansion rehabilitation, carriage dual Plant; way; and construction work on the Lagos-Ibadan Railway line. With the established cycle of voting, the year preceding general elections features more more general elections features preceding the year cycle the established With of voting, dividend as tangible projects infrastructure to deliver government by the spending fiscal projects rail and power road, on of such spending long-term effect The of democracy. business and investment projects also provide The the economy. for is usually positive opportunities the private sector. for Nigeria Risk Environment in 2018 Nigeria Risk Environment insecurity riskrisks the significant the most and physical riskNigerian were Political of political risk was perception The the year. throughout faced domestic environment the first quarteryear, for of the slated were the 2019 general elections, which fuelled by electionsthe 2018. in occurred for calendar the of events political the of many although included partySuch fraught events primaries events. campaign and much of the Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 49 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL ensure that all risks facing NSIA are identified and effectively managed and that returns managed and that identified and effectively that all risks facing NSIA are ensure risks with the commensurate taken;are volatility the our earnings; of NSIA against unexpected and and reduce losses protect support NSIA to from the value of the funds available Nigerian the to threat any negate people in times of economic stress; ensuring infrastructure by that the support of Nigeria’s the sustainable development risks; of inherent and assessment identification selectionon careful based of projects is defined with the aligned consistent, are plans investment that the Authority’s ensure and supportedand efficient risk risk management function; an effective appetite, by risk trade-offs and return optimise the Authority’s by ensuring that every member of staff actsrisk management while establishing strong as a primary manager, risk structures; and oversight independent review by complemented protocols for that allows and business environment building a risk-smartcontribute to workforce risk-taking, while ensuring that cost-effective precautions and responsible innovation and interests; stakeholders’ taken protect to are Authority’s risk management processes of the obtain assurance on the effectiveness reporting and regular processes. comprehensive through Risk Management Governance Structure Risk Governance Management and control growth, risk balances the demands for to governance Our approach transparency while supporting our objectives with an efficient decision-making process. Risk starts an important management governance which plays in with our Board, role risk management policies and practices. and approving reviewing embedded within the business and executive Risk are management processes risk metrics about relevant and Committees advises Board management regularly which in turn the Board is advised to within their scope of oversight, material exposures responsibilities main and composition the Details regarding appropriate. as Directors of risk management regarding Committees and the Board of Directors of our Board charters. contained in the respective are oversight The Authority’s risk management objectives are to: to: risk management objectives are Authority’s The • • • • • • • Finally, we expect a return to industrial harmony as the Government and organised expect industrial organised and as the Government to we harmony a return Finally, mark question The is whether on a new wage. minimum a compromise labour reach any pay will States all whether and Governments State to apply will wage minimum the wage. minimum agreed Risk Management building for that a sound risk is the foundation believe management system NSIA, we At a vibrant and viable institution. Risk Approach Management Objectives of Risk Management NSIA’s risk universe is broadly categorised under the headings of investment, operational, operational, categorised under the headings of investment, is broadly risk universe NSIA’s reporting. risk management and risk, effective facilitate political and strategic to in order dimensions study and understand different risk identify, is to managing for Our strategy the external along with factors it, universe, that can affect of risk within our investment our highly-experienced risk Accordingly, events. with the aim of mitigating undesired monitor, we which through process a comprehensive has developed management team and manage all risksevaluate in conducting internally our activities, both and externally. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 48 NLCC - Exterior View of Project Concept. - Exterior View of Project NLCC Given that the upcoming general elections are scheduled to hold in February 2019, we 2019, we hold in February to scheduled that the upcoming general electionsGiven are anticipate however, We, expect in the short-term. elevated that political risk will remain that election-driven If political achieve violence will be contained. is able to the nation in FDI as improvement as well expect appetite we a rise in local investment stability, year. duringinflow the Nigeria could still experience volatility in oil revenue and slower accretion to the foreign the foreign to Nigeria accretion and slower could still experience volatility revenue in oil occur in 2019. reserves, in the Niger if attacks on crude oil infrastructure to Delta were in the past been experiencedSuch sabotage activities during have electoral cycles. While growth in SSA is expected to accelerate from 3.1% in 2018 to 3.4% in 2019, global 3.1% in 2018 to from accelerate in SSA is expected to While growth the point from 0.4 percentage 3.2% in 2019, down to decelerate to is forecast growth year. preceding Further price boost could result from sanctions on Iran and Venezuela by the United the United by Venezuela sanctions from on Iran price boost could result and Further rivalthat given pricesin upswing sustained and major a But expected, not is States. the market crude oil into pick could pump more to like US shale oil producers, producers, cuts. the OPEC-led supply up the supply slack caused by In December 2018, the Organisation of Petroleum ExportingIn Countries (OPEC) of Petroleum December and some Organisation 2018, the reached the extension to of the production cut agreement non-OPEC agreed producers oil stabilising extensionThe boost for was a major year. of the previous in November on oil pressure that downward anticipate therefore, We, prices curtailing by over-supply. curtailed remain prices would in the first quarter of 2019. The decline in China's economic growth will continue to curtail demand growth for curtail for to will continue demand growth economic growth decline in China's The oil-exporting Many crude oil. the stability countries from in oil prices had benefited in external vulnerable to the countries shock. remain 2018. However, Risk Outlook war the trade caused by growth global economic on pressure Besides the downward has also continued Chinese economy of the between rebalancing the US and China, the 6.8% in from which slowed GDP growth, China’s global growth. a factor be in a tepid to further 6.6% in 2018, is expectedto 2017 to 2019. 6.2% in decline to RiskOverview (Continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

51 Strategic ObjectivesStrategic Strategic Implementation (domestic) Risk Political Risk Political (international) Strategic & Political & Strategic Risks • • • •

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l i l t i a c Market Risk Credit Risk Portfolio Risk Liquidity Risk Infrastructure Risk • • • • • Investment Risk Investment Risk Universe Figure 4.1: Risk Universe Management Figure 4.1: Risk Universe Management Figure We have analysed and outlined mitigation steps for risk groups identified across all across identified riskgroups for steps outlined mitigation analysed and have We market, risksproject and liquidity These strategic, include risks. operations. facets of our as follows: limiting the impact and are addressing of the occurrence for Our strategies Risk Investment RiskInvestment monitoring and managing Management assessing, encompasses risk management portfolio investment covers: The risk at the Authority. investment market risk, risk, credit portfolio risk, liquidity risk and infrastructure risk. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 50 Executive Management defines the process for setting the for setting the and makesrisk appetite Management defines the process Executive be required. annually or as may approval for the Board to recommendations Risk Appetite of risk the level the Authority expresses articulated risk the Board, appetite, by NSIA’s risk NSIA’s objectives. of its strategic in the achievement accept or tolerate is willing to of earnings to owing or fund value the erosion that minimises is set at a level appetite and fraud of result a as or transactions, investment Authority’s the in losses avoidable The function management risk recommends periodically inefficiencies. operational required. be as may for approval (or its committees) to the Board specific measures Objectives of Risk (Continued) Management Third Line of Defence: Internal Audit Internal Audit Line of Defence: Third primary audit unit’s The includes responsibility is internal audit. line of defence third The and appropriateness independent assurance on the adequacy, assessing and providing overall risk management framework, policy and practices. of NSIA’s effectiveness Second Line of Defence: Risk Management and Compliance Functions Functions Risk Management and Compliance Second Line of Defence: providing comprises for all units and functions second line of defence responsible The risk management team part at NSIA. As riskNSIA’s oversight of its duties, overarching of the effectiveness monitoring and challenging by risk independent oversight provides risk The management team and general operating practices. fund management NSIA’s ensuring compliance organisation, is also tasked the entire with monitoring risks across established policies and procedures. with regulations, First Line of Defence: Fund Managers Fund Line of Defence: First with the primary charged the risksAll fund managers are managing for responsibility in the various portfoliosinherent In they manage. by the case of funds managed directly monitoring the for is responsible external team parties, investment the engaging performance of the external pre-determinedto managers and ensuring that they adhere in all risks and manage inherent measure assess, to required Processes measures. control in the activities of the office portfolios integrated (whether managed internallyor not) are Officer. of the Chief Investment Three Lines of Defence Three model. ‘Three Lines of Defence’ Our risk management framework is based on the Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 53 AAA - 41.24% AA - 21.19% A - 2.77% BBB - 2.00% BB - 0.03% B - 32.74% Money Market - 0.03%

ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL the value of the funds under NSIA management is significantly under NSIA management is significantly the value of the funds this results from exposure to changes in prices and volatilities of of prices changes in to and volatilities exposure from this results Equity Price Risk:Equity Price basketsof December the end At equities and equityequities, of individual indices. in directly invested Generations Fund the Future 19% of 2018, NSIA had approximately the global equity markets. RateCurrency Risk: in spot to changes exposure resulting from movements rate by exchange affected effective The forwardcurrency prices of prices, rates. and the volatilities exchange statutory the due to reporting requirements, currency However, of NSIA is US dollars. by the Nigerian affected significantly therefore, are, We reporting currency is Naira. rate. Naira/US dollar exchange the Nigeria (FGF) and Generations Fund the Future (SF), Stabilisation Fund The not expectedis to This dollars. US in held mostly are (NIF) InfrastructureFund Generations Fund. and the Future the Stabilisation Fund change going forward for Fund, in the do expectsignificantly change we this to Nigeria Infrastructure However, in the Nigeria Investments progresses. mandate as implementation of the Fund primarily are expected while returns in made in US dollars, are Infrastructure Fund the currency increase riskNaira, which would over in the Nigeria Infrastructure Fund time. underlying the through currencies different to exposed are investments Funds’ The analysis of Further currency is termed as the absolute exposure. assets; this exposure the various currency of assets held by portfoliothe absolute exposure at managers some of a swathe of global currencies; to the end of December exposure 2018 shows the left: to detailed in the table below which are Credit Profile Credit Credit Risk Credit or deteriorationin the default loss due to for potential the risk represents Credit quality a counterparty,of hold. credit of securitiesissuer an we instruments other or holdings of fixed our and banks with deposits to limited are risk exposures credit Our counterparty defined our have We risk limits with Nigerian banks and income securities. these to risk exposures manage our credit to discount houses and use this as a guide shown is Fund Stabilisation NSIA’s of counterparties.risk profile credit the A snapshot of below): (2018 updated below • • 0.117% 0.141% 0.137% 0.192% 0.159% 0.351% 0.074% 0.104% 0.144% 0.381% 5.939% 1.062% 0.523% 0.273% 0.087% 0.054% 0.054% 0.382% 0.059% 0.298% 0.948% 2.280% 0.064% 0.051% 0.048% 0.050% 85.577% Portfolio Weight Portfolio Currency USD NGN EUR JPY CNY KRW INR BRL TWD HKD CHF DKK SEK ZAR SGD THB GBP RUB MYR IDR MXN VND ARS PHP KWD AED Others Portfolio Weight Portfolio Benchmark Weight

2 1 this results from exposure to changes in spot prices, forwardprices, changes in spot to exposure from this results interest rate movements directly affect the price of fixed-income the price directly affect of fixed-income movements rate interest NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA The Stabilisation Fund is exposed to interest rate risk. The average duration (a measure duration (a measure average The risk. rate interest is exposed to Stabilisation Fund The of the sensitivity of the portfolio of instrument prices changes in the rates) at the end to given AuthorityThe has maintained a cautious approach at 0.74 years. of 2018 stood in the US and has constructed a portfolio that the uncertain environment rate interest shortthe curvetowards yield the of end tilted significantly is duration average an with Policy Investment the Stabilisation Fund’s less than the three-year upper limit set in Statement. prices and volatilities of commodities, such as grains, metals, crude oil, natural gas etc. natural gas etc. crude oil, metals, such as grains, prices of commodities, and volatilities Generations Fund of the Future 0.54% the end of DecemberAt 2018, approximately reduction 3.6% in from was a significant This commodities. to had direct exposure macro-style the as Jamison Koppenberg, commodities manager, year the preceding Authority replace The decided not to investors. money to closed the fund and returned this commodity manager during the year. Rate Risk:Interest instruments. Commodity Price Risk: Price Commodity 000 52 Investment Duration Distribution Duration Investment Risk Universe (Continued) RiskUniverse 1000 2000 000 000 000 000 000 The investment duration distribution of instruments in the Stabilisation Fund are shown shown are duration distribution of instruments in the Stabilisation Fund investment The in the chart below: • • Our assessment of these risks and their impact portfolio on our below: outlined are Risk measures used for shorter-term periodsRisk used for include value at risk measures and sensitivity metrics. our primary tests. horizons, longer-term stress are risk measures For We manage our market risk by diversifying exposures and managing the Authority’s asset Authority’s the managing marketand our manage exposures risk diversifying by We and risk Risk measures produces management riskbalance reward. and to allocation the by the risk within portfolios that approved appetite remain ensure them to monitors losses of potential use a variety the size estimate to of risk measures We Board. Authority’s short extreme market over more and both moderate moves and long-term horizons. for Market Risk Market capital market rates, and commodity exchange Market price rates, risk interest includes marketThe to potential is exposed in NSIA instruments financial value of the volatility. in market of changes losses as a result conditions. 1000 Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 55 Fraud ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Physical Security RiskPhysical Outsourcing RiskOutsourcing Compliance Legal & RegulatoryLegal Operational RiskOperational External Events active participation and mitigating key identifying in proactively of all employees the Authority;operational risks across in compliance with applicable local policies and procedures instituting appropriate the prevent to designed and implementing controls and international standards, of operational risk and occurrence events; independent monitoring of operational risk and profile. indicators Our end goal is to provide early warning signals of any deterioration in the Authority’s deterioration in the Authority’s early of any warning signals provide Our end goal is to the possible, where and eliminate, minimise to ultimately, and, of internal controls system financial and non-financial impacts of negative on our business. occurrence namely: key the use of three and tools, frameworkNSIA has adopted methodologies Risk and Incident Events Management, and Process, Self-Assessment Risk and Control frameworks These aid the Authorityin monitoring and Key Risk Indicator Monitoring. reporting on operational risks NSIA. run by Operational Risk Operational operational NSIA defines result of risk as the arisingoutcome risk of loss or other as a or external factors systems, that are people, internal processes, failed or inadequate control. outside NSIA’s for more defined eight key as depicted have operational below, categories, risk We to manage our operational We seek risk through: management. detailed and effective • • • Internal Processes Systems Risk Systems People Risk People Figure 4.3: Operational Risk Structure Management 4.3: Operational Figure NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 54 Infrastructure projects are thoroughly analysed. They are taken through rigorous due taken rigorous are through They analysed. Infrastructure thoroughly are projects Once a decisions. diligence and also an internal riskframework that guides investment the secondary investment, de-risk goal is to for project has been approved as the project on investment. a sustainable return ensure much as possible to Infrastructure RiskInfrastructure investment the Authority’s loss arising from for Infrastructure the potential risk represents and large, complex, often involve Infrastructure projects. infrastructure in investments in Nigeria of infrastructure projects complex nature The long-term undertakings. poses NSIA. various for challenges regulatoryto: not limited matters; but are and include, significant quite are issues here The legal issues; community security; matters; risk; long-term funding; project development construction risk; viability risk; risk; revenue demand risk; and various market risks. There are allocations in the Future Generations Fund and the Nigeria Infrastructure Fund and the Nigeria Infrastructure Generations Fund Fund allocations in the Future are There yet-to-be-deployedThe held mostly in liquid allocations are be deployed. to yet that are liquidity risk. limiting the Authority’s in instruments, the Authority invest As continues to liquidityrisk and infrastructure projects, products and illiquid sophisticated will play more the Nigeria is especially true for This Infrastructure Fund. role. prominent a more The Future Generations Fund is designed for the long term and, as such, it holds a high the long term and, for is designed Generations Fund Future The the However, as private such equity of illiquid long-term assets, investments. percentage within one year. 50% of its assets in instruments redeemable maintain up to fund seeks to For the Stabilisation Fund, this risk is mitigated by maintaining a high percentage of liquid of liquid a high percentage maintaining this risk by is mitigated Fund, the Stabilisation For short-term maturity with a term to years. assets, of less than three Liquidity Risk inability meet to the Authority’s loss arising from for the potential Liquidity risk represents the to lead could which due, theywhen or are total in commitments future or current its This risk is exacerbated needs. cash-flow cover to unplanned sale of securities in order substantially could be during times of economic uncertainty, investments when some lack of demand or market due to discounted depth. Portfolio Risk Portfolio portfolio its not achieve the possibility may an investment that risk represents Portfolio take of factors portfolio a number we While that contribute to risk. are There objectives. portfolio monitor risk We minimise them, they be fully eliminated. can never to steps value at risk, including using a number of metrics, scenario analysis to limits, exposure of stress-testing and the impact prior exposure, monitor riskon of trades to exposures portfolio with risk scenarios. Risk Universe (Continued) RiskUniverse Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 57 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Mr Olajide Zeitlin (Chairman) Director) (Managing Orji Uche Mr Ojekwe-Onyejeli Director)*** (Executive Mrs Stella Director)** (Executive Umar-Sadiq Aminu Mr Director)* (Executive Ackermann Hanspeter Mr (Non-executive Buba Director) Halima Ms (Non-executive Director) MFR Eke, Kalu Urum Mr (Non-executive Director) Ighodalo Asue Mr (Non-executive Director) Maccido Bello Mr (Non-executive Director) Laraba Machunga-Disu Lois Ms The Clan Place Crescent Tigris 1386A Plot Floor, 4th PricewaterhouseCoopers Landmark Towers Road Corporation Water 5B, Island Victoria Nigeria Lagos, (Acting) Okoroafor Ezinwa Mrs Custodian) (Global & Co Chase Morgan JP 25 Bank Street Canary Wharf Kingdom United 5JP, E14 London, BankStanbic IBTC Limited (Local Custodian) Place IBTC Carrington Walter 2, Crescent Island Victoria Nigeria Lagos,

Tenure as an Executive Director lapsed in August 2018 lapsed in August Director as an Executive Tenure 2019 21 February 2019, effective 13 March Director announced Executive Was 17 October 2017 2019, effective 13 March Director announced Executive Was * ** *** Financial Highlights Financial Information General Directors Registered Office Maitama Abuja Auditors Secretary to the Authority Custodians Fund

NSIA co-createdNSIA InfraCredit, a specialised establishedfinancial enhance to guarantor, the credit quality of local currency infrastructure debt instruments. With InfraCredit, infrastructure attractive more institutional now to bonds are a facilitated far so has The company investors. companies power two for captive bond raise Nigeria.in inception the to instrumental also was NSIA founding Homes of Limited the Funds Family a FHFL, flagship(FHFL),. initiative of the Ministry mass in problems the solving is FHFL Finance., of provision the through development housing of affordable homes and mortgages.

people in Nigeria the quality of life ofthe quality of life institutions to improve improve institutions to infrastructure-enabling infrastructure andinfrastructure Making an Impact: in investing Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 59 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Mr Uche Orji Managing Director FRC/2014/IODN/00000007036 ensuring that the Authority and Group keep proper accounting records that disclose, with reasonable accuracy, the financial financial the accuracy, reasonable with disclose, that records accounting proper keep Authority the Group and that ensuring Authority Act; Investment Sovereign Nigeria the of requirements the with comply and Authority of the Group and position of financial presentation fair and preparation the to relevant control internal maintaining and implementing designing, and fraud or error; to due whether misstatements, material free from are that statements and supported reasonable policies by accounting suitable using statements financial Authority the Group's and preparing applied. consistently are that estimates and judgements prudent Statement of Directors’ Responsibilities 2018: December ended 31 year the for statements financial separate and consolidated the to relation In for statements financial separate and of consolidation preparation the Authority Act requires Investment Sovereign The Nigeria year of the affairs end the at Authority of financial of the Group and state of the view fair true a and give that year financial each includes: The or loss. of itsand profit responsibility a)  b) c) been prepared have which statements, financial separate and consolidated annual the for responsibilities The accept directors with conformity in estimates, and judgements prudent and reasonable supportedby policies accounting appropriate using Authority Act. Investment Sovereign Nigeria of the requirements the and Reporting Standards Financial International affairs financial of the of the state of the view fair a true and give statements financial the that opinion of the The are directors of accounting maintenance the for responsibility The further or loss. of its and profit directors Authority Group accept and financial of internal systems adequate as well as statements, of financial preparation the upon in be relied may that records control. 12 least at for concern a going remain not Authority the will that indicate to directors of the attention the to come has Nothing statement. of this date the from months by: of Directors Board of the on behalf Signed Mr Olajide Zeitlin Chairman FRC/2018/IODN/00000018084

– – – 2018 ₦’000 Authority 884,039 (866,720) (321,761) 1,025,390 31 December (3,282,523) 25,696,317 18,901,727 42,036,469 41,827,853

2018 Group ₦’000 245,960 209,300 (943,923) (1,022,393) 31 December (3,204,887) (3,762,225) (2,617,160) 27,822,953 11,405,258 18,052,191 46,185,074 44,337,108 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Attorney-General Federation; of the of Finance; Minister Commission. Planning National of the charge in Minister (ii) (iii) enhance the development of Nigerian infrastructure of Nigerian development the enhance and stress, support of economic times in stabilisation provide objects. above the to be related activitiescarry may as other out such Vice-President); the by be represented may (who of Nigeria The President and States; 36 of Nigeria’s Governors Eighteen other appointees, including: (i)

58 Mrs Ezinwa Okoroafor General Counsel FRCN/2016/NBA/00000015045 6. Employee health, safety and environment regularly. tested and reviewed are which environment, work safety strict the and practicesin and rules health TheAuthority enforces fire- and prevention Fire clinics. and hospitals designated through its for employees insurance medical The Authority provides premises. Authority’s the within locations strategic at installed are equipment fighting b) c) and management Governance 5. following: the comprises The Council Authority. the for Council) (the Council a Governing The Act establishes a) b) c) 4. Objective 4. to: mandates broad with of Nigeria Republic Federal of the laws the under entity established autonomous an is NSIA a) Interest and investment income and investment Interest Net gain on financial assets Impairment on financial assets charge subsidiaries infrastructure investments from Loss Other income expenses Operating and administrative expense Interest for using the equity method accounted of investments of profit Share taxation before Profit 3. Operating results year: the for results operating Authority’s and Group of the a summary is The following There have been no material changes to the nature of the Group’s business from the prior year. prior the from business Group’s of the nature the to changes been material no have There 2. activities Principal funds excess manage to Act, 2011 etc.) Authority (Establishment Investment Sovereign Nigeria the by The Authority established was Infrastructure Nigeria the (SF), Fund Stabilisation the funds: (3) performed three is This oil. sale of crude through country’s the from October in 2012. operations The Authority commenced (FGF). Fund Generations Future the and (NIF) Fund 1. Financial statements Financial 1. Authority’ Authority (‘the or Investment report affairs on the yearly Sovereign their of Nigeria The Authority of the present directors auditor's independent and Group’) ‘the (known as Authority subsidiaries of the the and statements financial the with together ‘NSIA’), 2018. December ended 31 report year the review for Directors’ Report gain exchange Net foreign fees management and custodian Investment the year for income comprehensive Total Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 61 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL To the Members of Nigeria Sovereign Investment Authority Investment Sovereign Nigeria of Members the To Independent Auditor’s Report continued Auditor’s Independent Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud to due whether statements, financial separate and consolidated of the misstatement risksthe of material Identify assess and appropriate sufficient and is that evidence audit obtain risks, and those to responsive perform and procedures design audit or error, one for than higher fraud from is resulting misstatement a material detecting of not The risk opinion. our for a basis provide to of internal override or the misrepresentations, omissions, intentional forgery, collusion, involve fraud as may error, from resulting control. the in appropriate are that procedures audit design to order in audit the to relevant control of internal understanding an Obtain control. internal effectiveness on the opinion an Group’s of the purpose the of expressing for but not circumstances, disclosures related and estimates of accounting reasonableness the and used policies of accounting appropriateness the Evaluate directors. the by made evidence based audit on the and, of accounting basis concern going of the use of directors’ appropriateness on the Conclude Group’s the on doubt cast significant may that conditions or events to uncertainty exists related a material whether obtained, our in attention draw to required uncertainty exists, are we a material that conclude we If concern. a going as continue ability to inadequate, are disclosures such if or, statements financial separate and consolidated the in disclosures report related the to auditor’s report. However, auditor’s of our date the to up obtained evidence based audit on the are modifyto conclusions Our opinion. our concern. a going as continue to cease to Group the cause may or conditions events future the including statements, financial separate and consolidated of the structure content and presentation, overall the Evaluate in events and transactions underlying the represent statements financial separate and consolidated the whether and disclosures, presentation. fair achieves that a manner the activities within or business entities of the information financial the regarding evidence audit sufficient appropriate Obtain direction, the for responsible are We statements. financial separate and consolidated on the opinion an express to Group opinion. audit our for solely responsible remain We audit. performance group of the and supervision PricewaterhouseCoopers Chartered Accountants, Landmark Towers 5B Water Corporation Road, Victoria Island, Lagos, Nigeria. Lagos, Victoria Island, Corporation Road, Water 5B Towers Landmark Chartered Accountants, PricewaterhouseCoopers Responsibilities of the directors and those charged for the consolidated with and governance separate financial statements view fair a true and give that statements financial separate and consolidated of the preparation the for responsible The are directors Authority Investment Sovereign Nigeria of the requirements the and Reporting Standards Financial International with accordance in the enable necessary is to determine directors the as control internal such Act, for and of Nigeria Reporting Council Act, Financial the fraud or to due whether misstatement, material free from are that statements financial separate and of consolidated preparation error. ability to Group’s the assessing for responsible are directors the statements, financial separate and consolidated the preparing In of basis concern going the using and concern going to related matters applicable, as disclosing, concern, a going as continue do but to alternative realistic no or have operations, cease or to Group the liquidate to intend either directors the unless accounting so. reporting process. financial Group’s the overseeing for responsible are governance with Those charged responsibilitiesAuditor’s for the audit of the consolidated and separate financial statements a whole are as statements financial separate and consolidated the about whether assurance reasonable obtain to objectivesOur are Reasonable opinion. our report includes that auditor’s an issue to and fraud or error, to due whether misstatement, material free from detect a always will ISAs with accordance in conducted audit an that a guarantee not but is of assurance, level a high is assurance the or in individually if, material considered are and fraud from or error arise can exists. it when Misstatements misstatement material consolidated of these basis on the taken of users decisions be expected economic the influence reasonably to could they aggregate, and separate financial statements. the throughout scepticism professional maintain and judgment professional exercise we ISAs, with As part accordance in audit of an also: We audit. • • • • • • - Independent auditor’s report auditor’s Independent Authority Investment Sovereign Nigeria of Members the To NIGERIA SOVEREIGN INVESTMENT AUTHORITY AUTHORITY INVESTMENT INVESTMENT SOVEREIGN SOVEREIGN NIGERIA NIGERIA the consolidated and separate statements of financial position as at 31 December 2018; December 31 at as position of financial statements separate and consolidated the ended; then year the for income of comprehensive statements separate and consolidated the ended; then equity in year the for of changes statements separate and consolidated the and ended; then flows of cash year the for statements separate and consolidated the policies. accounting of significant a summary include which statements, financial separate and consolidated the to notes the 6060 If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are are we information, other of this misstatement a material is there that performed, have conclude we we based work on the If, regard. report this to in nothing report fact. have to that We required tion identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and consolidated the with inconsistent materially is information other the whether consider so, doing in and, above identified tion misstated. be materially to appears or otherwise audit, the knowledge in or our obtained statements financial separate In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other informa other the read to is responsibility our statements, financial separate and consolidated of the audit our connection with In Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express express do not we and information other the cover doesnot statements financial separate and consolidated on the opinion Our thereon. conclusion of assurance form or any opinion audit an Other information Directors’ Information, General the comprises information The other information. other the for responsible The are directors the include but does not Summary, Financial Five-Year and Statement Added Value Responsibilities, of Directors’ Report, Statement report thereon. auditor’s our and statements financial separate and consolidated Independence Independence for Ethics of Code Accountants’ for Board Standards Ethics International the with accordance in Group of the independent are We Code. IESBA the with accordance in responsibilities ethical other our fulfilled have We Code). (IESBA Accountants Professional We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. opinion. our for a basis provide to appropriate sufficient and is obtained have we evidence audit the that believe We Basis for opinion standards those under responsibilities Our (ISAs). on Auditing Standards International with accordance in audit our conducted We section of statements financial separate and consolidated of the audit the for responsibilities furtherare Auditor’s the described in our report. What audited have we comprise: statements financial separate and consolidated Authority’s Investment Sovereign Nigeria • • • • • Our opinion financial separate and consolidated of the view fair a true and give statements financial separate and consolidated the opinion, our In December 31 at as Group”) “the (together Authority”) Authority (“the its Investment and subsidiaries Sovereign of Nigeria position then flows cash year the for separate and consolidated their performanceand financial separate and consolidated their of and 2018, Investment Sovereign Nigeria the of requirements the and Reporting Standards Financial International with accordance ended in Act. of Nigeria Reporting Council Authority Act Financial the and Report on the audit of the consolidated and separate financial statements PricewaterhouseCoopers Chartered Accountants, Landmark Towers 5B Water Corporation Road, Victoria Island, Lagos, Nigeria. Lagos, Victoria Island, Corporation Road, Water 5B Towers Landmark Chartered Accountants, PricewaterhouseCoopers Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

63 – – – – – – – – – – – – – – 2017 ₦’000 7,960 (6,494) Authority (47,755) 362,081 (708,811) (654,562) 4,153,564 1,703,128 7,435,016 31 December 31 (3,170,090) 7,435,016 21,339,050 23,686,882 31,121,898 27,557,823 26,849,012 23,686,882 23,686,882 23,686,882 31,121,898 23,686,882 31,121,898

– – – – – – – – – – – – 2018 ₦’000 Authority (45,613) (89,629) 796,525 884,039 (866,720) (731,478) (321,761) (208,616) (208,616) 1,386,859 1,025,390 31 December 31 (3,282,523) 23,512,933 18,901,727 42,036,469 41,827,853 45,482,083 44,293,602 42,036,469 42,036,469 42,036,469 41,827,853 42,036,469 41,827,853

– – – – 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 107 536 Group ₦’000 7,960 (6,765) 60,049 (47,755) (85,223) 434,988 (709,082) (654,562) (402,038) 2,603,755 4,153,564 1,652,172 6,469,348 31 December December 31 (2,146,165) (4,719,621) 5,372,634 21,766,964 31,367,992 22,556,738 27,929,801 (33,514,157) (1,156,763) 30,176,455 29,467,373 22,959,312 22,557,274 22,557,274 27,929,908 22,557,274 27,929,908

– 2018 893 Group ₦’000 1,093 (45,613) (89,629) 59,960 796,525 245,960 209,300 191,298 (887,151) (943,923) (219,461) 538,816 3,208,212 31 December December 31 (1,022,393) (3,204,887) (3,762,225) (2,617,160) 23,818,216 18,052,191 27,403,230 11,405,258 46,503,536 44,336,015 (30,608,117) (2,418,579) (2,167,321) 46,121,104 44,154,788 46,185,074 45,965,613 46,504,429 44,337,108 46,504,429 44,337,108 9 10 11 12 13 14 15 16 17 18 19 25 17 Notes 31.1 The accompanying notes on pages 71 to 157 form an integral part of these consolidated and separate financial statements. financial separate and part consolidated of these integral an form 157 to on pages 71 notes The accompanying Statement of Comprehensive Income of Comprehensive Statement 2018 December 31 ended year the For Interest income Interest Investment income Investment Interest income on financial assets at FVTPL income on financial Interest Net gain on financial assets Net gain on financial Net foreign exchange gain exchange Net foreign Impairment on financial assets charge Total investment management and custodian fees and custodian management investment Total Total operating income operating Total fees management Investment fees custodian Local fees Global custodian Total operating profit operating Total subsidiaries infrastructure investments Revenue from Expense from infrastructure subsidiaries infrastructure investments Expense from Loss from infrastructure subsidiaries infrastructure investments from Loss Other income Operating and administrative expenses Operating and administrative Interest expense Interest Share of profit of investments accounted for using the equity method accounted of investments of profit Share Profit before taxation before Profit Taxation Profit for the year from continuing operations continuing year from for the Profit discontinued operations from Profit Profit for the year for the Profit income: Other comprehensive or loss: to profit be reclassified may Items that financial assets Net change in fair value of available-for-sale Net change in fair value of financial assets at FVOCI of associates loss/income of other comprehensive Share and joint venture operations foreign on translating differences Exchange the year for (loss)/income Other comprehensive the year for income comprehensive Total to: attributable Profit Owners of NSIA to: attributable income comprehensive Total Owners of NSIA Non-controlling interest Non-controlling interest 25 April 2019

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA PricewaterhouseCoopers 62 PricewaterhouseCoopers Chartered Accountants, Landmark Towers 5B Water Corporation Road, Victoria Island, Lagos, Nigeria. Lagos, Victoria Island, Corporation Road, Water 5B Towers Landmark Chartered Accountants, PricewaterhouseCoopers For: We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the timing and scope planned the matters, other among regarding, governance with charged those with communicate We audit. our identify we during that control internal in deficiencies significant any including findings, audit significant and audit EngagementPartner: Obianwa Patrick FRC/2013/ICAN/00000000880 Chartered Accountants Nigeria Lagos, Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

65 – – ’000 Total Group ₦ equity 60,049 59,960 191,298 6,469,348 5,372,634 (1,156,763) (2,011,745) (2,418,579) (2,167,321) 22,557,274 76,287,500 46,504,429 499,050,278 27,929,908 76,287,500 44,337,108 396,844,615 501,062,023 501,062,023 543,387,386

– – – – – – – 13 ’000 536 893 200 107 (442) (429) (846) Group ₦ 4,730 1,046 4,623 4,730 4,730 1,093 5,823 interest Non-controlling

– – – – – – – – – – ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦ earnings Retained (2,011,745) 22,556,738 46,503,536 41,656,465 41,656,465 168,390,341 22,556,738 88,160,001 147,845,348 170,402,086 170,402,086 256,550,342

– – – – – – – – ’000 Group ₦ reserve 60,049 59,960 Fair value value Fair 192,144 6,469,790 6,529,839 6,529,839 1,786,620 43,190,981 (41,656,465) (41,404,361) 36,661,142 43,190,981 43,190,981 (41,404,361)

– – – – – – – – – – ’000 Group ₦ reserve Foreign Foreign currency translation (1,156,776) (1,156,776) (2,419,625) (2,419,625) 6,801,726 7,958,502 6,801,726 6,801,726 4,382,101 (1,156,776) (2,419,625)

– – – – – – – – – – – – – – – ’000 Group ₦ Contribution Contribution 76,287,500 by Government by 280,662,500 76,287,500 204,375,000 280,662,500 280,662,500 280,662,500 Statement of Changes in Equity 2018 December 31 ended year the For Balance at 1 January at Balance 2017 Profit for the year for the Profit Currency differences translation Net change in fair value of available-for-saleNet change in fair value financial assets Share of other comprehensive income of other comprehensive Share of associates Total other comprehensive income for the year income for the other comprehensive Total Total comprehensive income for the year for income comprehensive Total Contribution by Government Contribution by Balance at 31 December 2017 31 December at Balance Total transactions with owners Total Balance at 1 January at Balance 2018 Changes on initial application of IFRS 9 Restated balance as at 1 JanuaryRestated 2018 Profit for the year for the Profit Currency translation differences Net change in fair value of financial assets FVOCI Reclassification from fair value reserves fair value Reclassification from as a of adoption of IFRS 9 result Movement in NCI Movement Share of other comprehensive income of of other comprehensive Share and joint venture associates Total other comprehensive income for the year income for other comprehensive Total Total comprehensive income for the year for income comprehensive Total 2018 31 December at Balance Note(s)

– – – – 63 2017 ₦’000 Authority 48,503 8,545,297 1,600,490 7,884,464 31 December 31 7,884,464 72,310,092 16,085,655 43,497,310 404,313,672 280,662,500 170,859,498 495,019,308 502,903,772 495,019,308 502,903,772

– – – – 2018 ₦’000 Authority 12,893 272,950 5,116,826 2,245,070 31 December 31 61,777,335 36,082,678 10,614,990 18,915,515 441,635,909 280,662,500 253,690,496 536,598,066 18,915,515 555,513,581 536,598,066 555,513,581

– 2017 Group ₦’000 1,201 4,730 2,453,380 3,534,631 6,801,726 31 December December 31 22,336,959 49,134,358 13,797,596 16,306,560 29,285,925 43,190,981 429,852,525 280,662,500 170,402,086 501,057,293 32,820,556 533,882,579 501,062,023 533,882,579

– 2018 Group ₦’000 5,823 12,893 1,617,016 1,786,620 4,382,101 31 December December 31 76,154,290 44,189,369 20,685,075 13,647,879 48,258,049 26,052,673 461,391,586 280,662,500 256,550,342 543,381,563 74,310,722 617,698,108 543,387,386 617,698,108 20 21 22 23 24 25 26 27 28 29 30.1 30.2 30.3 30.4 30.5 Notes Mr Uche Orji Officer Executive Chief and Director Managing FRC/2014/IODN/00000007036

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Mr Olajide Zeitlin statements. financial separate and part consolidated of these integral an form 155 to on pages 69 notes The accompanying Mrs Olubisi Makoju Controller Financial FRC/2014/ICAN/00000005765 Signed on behalf of the Board of Directors on 21 April of Directors 2019 by: on behalf of the Board Signed Chairman FRC/2018/IODN/00000018084 certifiedAdditionally by: Assets and cash equivalents Cash Investment securitiesInvestment Other assets Inventories Investments in subsidiariesInvestments Investments accounted for using the equity method for accounted Investments Property and equipment Intangible assets Total assets Total Liabilities Other liabilities Borrowings Total liabilities Total Equity equity to holders of parent Equity attributable Government Contribution by Retained earnings Fair value reserve Fair Foreign currency reserve translation Foreign Non-controlling interest Total equity and liabilities Total

64

Statement of Position Financial 2018 December 31 As at Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

67

– – – – – – – – – – – – – 2017 558 ₦’000 (490) Authority 40,888 (23,087) 228,428 (362,081) (869,908) (228,428) 4,165,976 4,831,249 31 December 31 (8,989,500) 23,686,882 80,860,680 24,414,976 (21,339,050) (64,954,399) (32,985,442) 186,042,954 (169,434,500) (245,118,390) (59,859,562) (59,859,562)

– – – – – – – – – – – – – – 63 2018 ₦’000 Authority 57,818 (12,893) 732,113 321,761 (282,265) 31 December 31 (7,757,836) (1,742,922) (9,014,500) 42,036,469 36,227,414 29,227,380 10,968,829 (16,195,559) (11,031,051) 171,422,900 163,937,019 42,648,270 42,648,270 (195,608,028) (162,374,236)

– – – – – – – – 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 720 Group ₦’000 (490) (4,266) (1,300) 64,079 85,223 228,428 (228,428) (869,908) (434,988) (183,575) (175,437) 4,798,592 5,707,081 31 December December 31 (2,603,755) 22,959,312 80,860,680 26,833,493 (21,766,964) (13,797,596) (44,436,314) (35,357,672) 197,904,283 (268,610,510) (169,434,500) (56,230,027) (56,234,293)

– – – – – – – – 63 2018 Group ₦’000 (1,138) 57,818 (12,893) 943,923 (209,300) (113,630) 1,876,611 2,617,160 4,944,989 31 December December 31 (3,564,275) (8,063,119) (8,600,000) (6,887,479) (1,626,239) 46,185,074 30,461,975 10,968,829 (16,195,559) (5,866,218) (5,979,848) (18,972,124) (10,925,239) 191,611,360 163,937,019 (195,608,028) (162,374,236) 18 18 14 25 23 22 28 26 27 27 24 24 25 Notes Statement of Cash Flows Cash of Statement 2018 December 31 ended year the For Cash flows from operating activities operating from flows Cash operations continuing income tax from before Profit Adjustments to reconcile profit before tax to net cash flow to net cash flow tax before profit reconcile to Adjustments activities operating from the year for charge Depreciation Amortisation assets of intangible Dividend income Investment income Investment Interest income Interest income on bills Interest instruments at FVTPL gain on financial Unrealised fertiliser on sales differential Cost Impairment losses Interest expense Interest venture and joint associate from of profit Share Movements in operating assets/liabilities in operating Movements Inventories Other assets Other liabilities Cash (used in)/generated from operations from (used in)/generated Cash activities in operating from/(used) Net cash generated Tax paid Tax activities investing from flows Cash Purchase of property, plant and equipment of property, Purchase Purchase of other intangible assets of other intangible Purchase Disposal of intangible assets Disposal of intangible Payments for maturity for of held-to-maturity financial assets Payments financial assets loans and receivables for Payment sale of equity instruments at fair value from Proceeds in financial assets at amortisedInvestments cost of open market operation bills Purchases Maturity of open market operation bills Proceeds from available-for-sale financial asset available-for-sale from Proceeds income received and interest Investment Dividend income Proceeds from liquidation/maturity from of loans and Proceeds financial asset receivables of subsidiaryAcquisition Payment for available-for-sale financial asset available-for-sale for Payment Disposal of subsidiaries Investments in joint ventures/associates Investments

– Total Total ₦’000 equity Authority (208,617) (249,094) (208,617) 7,435,016 7,435,016 23,686,882 76,287,500 494,770,214 31,121,898 42,036,469 41,827,852 387,609,910 495,019,308 495,019,308 536,598,066

– – – – ₦’000 Authority earnings Retained (249,094) 23,686,882 41,043,623 170,610,404 23,686,882 42,036,469 41,043,623 83,080,092 147,172,616 170,859,498 170,859,498 253,690,496

– – – – ₦’000 reserve Authority Fair value value Fair (208,617) 7,435,016 7,435,016 7,435,016 2,245,070 43,497,310 (41,043,623) 36,062,294 43,497,310 43,497,310 (41,252,240) (41,252,240)

– – – – – – – – – ₦’000 Authority Contribution Contribution 76,287,500 280,662,500 76,287,500 Government by 204,375,000 280,662,500 280,662,500 280,662,500 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA 66 Profit for the year for the Profit assets financial of available-for-sale Net change in fair value Balance at 1 January at Balance 2017 For the year ended 31 December 2018 December 31 ended year the For Statement of Changes in Equity the year for income other comprehensive Total Contribution by Government Contribution by 1 January at Balance 2018 Total comprehensive income for the year for income comprehensive Total 2017 31 December at Balance The accompanying notes on pages 69 to 155 form an integral part of these consolidated and separate financial statements. financial separate and part consolidated of these integral an form 155 to on pages 69 notes The accompanying Profit for the year for the Profit Net change in fair value of financial assets (available-for-sale) Note(s) Total other comprehensive income for the year for income other comprehensive Total the year for income comprehensive Total 2018 31 December at Balance Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 69 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Basis of preparation ofStatement compliance Basis of measurement currency presentation and Functional balances and transactions currency Foreign Financial assets measured at fair value though other other though value fair at measured assets Financial (FVOCI). income comprehensive amortised at cost. measured liabilities and assets Financial or loss profit through value fair at measured assets Financial (FVPL).

3. 3.1 of Nigeria statements financial separate and The consolidated in been prepared have Authority (NSIA) Investment Sovereign (IFRS) Reporting Standards Financial International with accordance International including 34), (IAS information financial Interim on the by issued Interpretations and Standards Accounting Committee Reporting Interpretations Financial International Further reporting IFRS. under companies to applicable (IFRIC) Accounting International the by beissued may standards interpretations the be subject to may and (IASB) Board Standards IFRIC. the by issued 3.2 historical on the been prepared have statements The financial following: the for except basis cost — — — 3.3 (a) financial All Naira. in presented are statements These financial nearest the been to rounded has Naira in presented information The currency of the indicated. otherwise except thousands, is, Authority the of (that environment primary economic functional currency) the is Nigerian Naira. Group’s of the of each statements financial the in included Items primary currency of the the using measured are entities (‘the entity the operates which in environment economic the currency is presentation functional currency’). The Group’s Naira. 3.3 (b) functional the into translated are transactions currency Foreign of the dates the at prevailing rates exchange the currency using Foreign re-measured. are items where or valuation transactions such of settlement the from resulting losses and gains exchange period-end at exchange translation the from and transactions foreign in denominated of monetary liabilities and rates assets except statement, income the in recognised are currencies qualifying as income comprehensive other in deferred when hedges.flow cash hedges qualifying and investment net and borrowings to relate that losses and gains exchange Foreign income the in presented are equivalents cash and cash foreign other All costs’. or income ‘finance within statement income the in presented are losses and gains exchange gains’. exchange ‘net within statement

Investment managers UBS Global Asset Management UBS Global Asset Limited, Income + Research Smith Graham & Co, Management for Fund Team, In-house Management in Nigeria (FAFIN) Finance Agricultural Blue Mountain, UK LLP, Capital Cevian Management,Capital Group JHL Capital Capital Partners, Investment Edgbaston LLP, Somerset, Arbiter Limited, Offshore Group, Marathon Asset ManagementCapital LLP, Prince Chieftain Capital, Management LLP, Xenon Partners, Jamison Capital Street, Helios Partners, Z Capital Equity, Private Royalty Healthcare Partners, Investment Management, Capital Actis AQR Partners, Abraaj Alliance, and Africa Capital Capital, Partners, Unigestion SA, Canyon Group, RWC Goldman Asset Sachs Limited, Partners LiquidityWhitehorse Partners, Management, Stone Cardinal Partners, Capital Reverence Management, Capital L.P Oaktree Partners, General Information Structure and content and Structure a statement of changes in equity in year; the for of changes a statement and flows of cash year; the for a statement accounting of significant a summary comprising notes, information. explanatory other and policies a statement of financial position at the end of the year; year; the of end the at position of financial a statement year; the for income of comprehensive a statement

Fund Stabilisation The (SF) Fund NigeriaThe Infrastructure Fund (NIF) Future The Generations Fund (FGF) 2. Notes to theConsolidated andSeparate Statements Financial 1. Authority’)‘the or Authority (‘NSIA’ Investment Sovereign Nigeria funds excess the invest and manage receive, to established was portfoliodiversified a in sale oil of crude country’s the offrom The by Authority up set was investments. long-term and medium signed Authority was Act, which Investment Sovereign Nigeria the seed in capital. billion US$1 initial an allocated was and 2011, May in October in 2012. operations The Authority commenced office its and registered Nigeria in The domiciled Authority is Crescent, Tigris 1386A, Plot floor, 4th Place, The is Clan address Maitama, Abuja. three established Authority the has its mandate, actualise To Future the (SF), Fund Stabilisation the funds: ‘ring-fenced’ separate (NIF). Infrastructure Fund Nigeria the and (FGF) Fund Generations follows: as managed activities are funds of the The investment (c) (d)  (e) The financial statements comprise: (a) (b)

– – – 2017 249 ₦’000 Authority 8,545,048 31 December 31 8,545,297 8,545,297 76,287,500 11,213,629 141,076,852 76,287,500 (160,173,122) (143,745,184)

– – – – 2018 133 ₦’000 Authority 2,319,562 8,545,297 31 December 31 8,264,206 29,531,728 32,245,474 50,912,476 61,777,335 61,777,335

2017 473 Group ₦’000 (85,223) 316,208 5,000,000 31 December December 31 76,287,500 11,330,588 22,020,278 148,267,906 81,202,277 22,336,959 22,336,959 (162,229,519) (137,261,535)

– 2018 133 Group ₦’000 (153,493) 3,519,262 31 December December 31 30,000,000 22,336,959 43,908,683 32,245,474 26,431,410 29,846,507 50,298,069 76,154,290 76,154,290 29 20 20 20 20 30.1 Notes

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

68

Statement of Cash Flows Cash of Statement (continued) 2018 December 31 ended year the For The accompanying notes on pages 69 to 155 form an integral part of these consolidated and separate financial statements. financial separate and part consolidated of these integral an form 155 to on pages 69 notes The accompanying Net cash generated/(used) in investing activities in investing Net cash generated/(used) Cash flows from financing from activities flows Cash Government Contribution by Proceeds from borrowings from Proceeds Interest expense Interest financing activities from Net cash generated Net cash movement for the year for Net cash movement of year and cash equivalent at beginning Cash Net exchange gains/losses on cash and cash equivalents gains/losses on Net exchange end and cash equivalents at year Cash comprise: and cash equivalents Cash in hand Cash Bank balances Placements with financial institutions Placements Total cash and cash equivalents cash and cash Total Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 71 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Identify the contract(s) with a customer. with Identify contract(s) the

obliged to withhold an amount for the employee’s tax obligation tax obligation employee’s the for amount an withhold to obliged to amount that pay and a share-based payment with associated was if it as be treated will whole the award taxthe authority, beenequity-settled equity-settled have would it provided following the with Entities feature. settlement net the without be affected equity- to changes: likely these by are arrangements to relating features settlement net include that settled awards include cash-settled that share-based payments tax obligations, cash-settled that and arrangements performanceconditions, equity-settled modifiedare to The share-based payments. on or after beginning years for is effective standard of the date 1 January 2018. cycle Annual improvements 2014-2016 2016: December in finalised were improvements Thefollowing transition covering exemptions short-term 1 – deleted IFRS no longer are which 10 IFRS and 19 IAS 7, of IFRS provisions capital election the venture by that – clarifies 28 IAS relevant. to entities trusts similar and unit funds, mutual organisations, value fair at ventures joint or associates in investments measure each for be separately made should or loss profit through The effective recognition. date initial at venture or joint associate on or after 1 January 2018. beginning years for is standard of the Property Investment of – Amendments IAS 40 to Transfers investment or from, to, transfers clarifyThe amendments that property use in been a change has be only if there can made the when occurs use in A change supported evidence. by is that of investment property meet, definition the to meets, or ceases support sufficient to not is alone intention in property. A change standard the in of use a change for The of evidence list a transfer. help to of examples a non-exhaustive as list recharacterised was for two The provided options Board principle. the illustrate impact reclassification the from any with prospectively, transition: the at as earnings retained opening to adjustment as recognised permitted – only or retrospectively recognition, of initial date required are disclosures Additional of hindsight. use the without The effective prospectively. entity adoptsif an requirements the on or after beginning years for is standard of the date 1 January 2018. from Contracts Revenue Customers with 15 IFRS 18 IAS Contracts; Construction 11 IAS supersedes 15 IFRS 15 IFRIC Loyalty Programmes; Customer 13 IFRIC Revenue; Transfers 18 IFRIC Estate; of Real Construction the for Agreements – Barter Revenue 31 SIC and of Assets Customers; from Services. Advertising Involving Transactions revenue entity recognises an that is 15 of IFRS principle The core customers goods or services to of promised depict transfer the to entity the which to reflects that amount an consideration the in goods or services. those for expects exchange in be entitled to core that with accordance in revenue entity recognises An steps: following the applying by principle — Basis of preparation continued In relation to the impairment of financial assets, IFRS 9 IFRS assets, of financial impairment the to relation In an opposed expected as an model, to loss credit requires The expected credit 39. IAS model under loss credit incurred expected for credit account entity to an model requires loss each expected those at in losses changes credit and losses initial since reflect risk to credit in reporting changes date to event necessary no longer a credit for is It recognition. recognised. are losses credit before occurred have the retain requirements The hedge general accounting new currently mechanisms typesthree of hedge accounting flexibility been has greater 9, IFRS Under 39. IAS in available types the hedge for to eligible of transactions introduced types the broadening specifically of instruments accounting, types the and qualify instruments hedging for of risk that for eligible are that items non-financial of components effectiveness the addition, has In test hedge accounting. ‘economic of an principal the with been replaced of hedge assessment Retrospective relationship’. disclosure Enhanced required. effectiveness no longer also is activities management risk entity's about an requirements have also been introduced.

3. — — on or beginning years for Theis effectivestandard the of date after 1 January 2018. the first the in for time standard the adopted has The Group financial statements. 2018 4 Insurance Instruments IFRS with Applying 9 Financial IFRS Contracts 4 – Amendments IFRS to 4 IFRS to amendment an published IASB the 2016, September In about companies of insurance concerns the addresses which and Instruments 9 Financial effective of IFRS different the dates The contracts standard. insurance new forthcoming the insurance for two solutions different provides amendment that entities 9 for IFRS from a temporary exemption companies: reporting the entity at (applied meetspecific requirements optional. are approaches Both approach’. ‘overlay the and level), be the superseded by will amendments) the 4 (including IFRS Accordingly, standard. contracts insurance new forthcoming are approach’ ‘overlay the and temporarythe both exemption insurance new the when beapplicable to expected cease to effective. becomes standard The effective standard of the date the or when on or after 1 January 2018 beginning years for is 9. IFRS entity first applies Classification and Measurement of Share-basedPayment 2 – Amendments IFRS to Transactions clarify the 2016 June 2 in IFRS to made The amendments cash-settled for and payments share-based basis measurement from award an change that modifications for accounting the exception an cash-settled equity-settled. to introduce They also is employer an Where 2. IFRS in principles classification the to New standards, amendments and interpretations in adopted and effective interpretations and Standards year current the With regard to the measurement of financial liabilities liabilities financial of measurement the to Withregard 9 IFRS or loss, profit through value fair at as designated of the value fair the in of change amount the that requires credit the in changes attributable to is that liability financial comprehensive other in presented is liability of the risk effect of the recognition the changes of the unless income, income comprehensive other in risk credit liability’s of the or profit in mismatch accounting an or enlarge create would fair in change of the amount entire the 39, IAS Under loss. through value fair at as designated liability of a financial value or loss. profit in presented is or loss profit All recognised financial assets that are within the scope of scope the within are that assets financial recognised All Measurement and Recognition Instruments: Financial 39 IAS amortised at cost measured be subsequently to required are held are that investments debt Specifically, value. or fair collect the model to objective whose is a business within flows cash contractual have flows, cash that and contractual on the interest and of principal payments solely are that amortised at measured generally are principal outstanding reporting periods. Debt of subsequent end the at cost model whose a business within held are that instruments cash contractual collecting both by achieved objective is contractual have that and assets, financial flows selling and to on specified rise dates giving asset financial of the terms interest and of principal payments solely flows are cash that other FVOCI. All at measured are on outstanding principal, at value fair at measured are equity and debt investments under reporting addition, periods. In of subsequent end the election present to irrevocable an make may entities 9, IFRS equity of an value fair the investment in changes subsequent income comprehensive other in trading) for held not is (that or profit in recognised generally income dividend only with loss. impairment requirements for financial assets; and measurement and classification the to amendments limited other through a ‘fair value introducing by requirements category for measurement (FVOCI) income’ comprehensive certain simple debt instruments.

— b) 9: of IFRS requirements Key — 3.5 3.5.1 instruments 9 Financial IFRS requirements new introduced 2009 November in 9 issued IFRS 9 assets. IFRS of financial measurements and classification the for include to October 2010 in amended subsequently was of financial measurement and classification the for requirements to 2013 November in and derecognition, for and liabilities hedge accounting. general for requirements new the include mainly 2014 July in issued 9 was of IFRS version revised Another include: to a) NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Changes in accounting policyChanges in accounting Group companies Group

assets and liabilities for each balance sheet presented are are presented sheet balance each for liabilities and assets sheet; balance of that date the at rate closing the at translated are statement income each expenses for and income is average this (unless rates exchange average at translated effect cumulative ofthe of approximation reasonable a not case which in transaction the on dates, prevailing rates the dates on the rate the at translated expenses are and income and transactions); of the other in recognised are differences exchange resulting all income. comprehensive 70 The Group has adopted the following new standards and standards new following the adopted has The Group amendments including consequentialany amendments to of 1 January 2018. of application date initial with standards other 3.4 as policies accounting the applied consistently has The Group periods all to statements financial consolidated the out in set statements. financial consolidated on the presented  b) c) of acquisition on the arising adjustments value Goodwill fair and foreign of the liabilities and assets as treated entity are a foreign differences Exchange rate. closing the at translated entity and income. comprehensive other in recognised are arising The results and financial position of all the Group entities (none (none entities Group the of all position financial and The results that economy) currency of a hyper-inflationary the has of which presentation the from a functional currency different have follows: currency as presentation the into translated currency are a) 3.3 (c) Translation differences on non-monetary and assets differences financial Translation or loss profit through value fair at held equities as such liabilities or part as gain or loss value fair profit of the in recognised are on non-monetary assets differences financial Translation loss. measured at fair value, such as equities classified as financial income. comprehensive other in included are FVOCI, at assets Changes in the fair value of monetary securities denominated in of monetary value fair the denominated in securities Changes analysed sale are for available as currency classified foreign the in changes from resulting differences between translation carrying the in amortised security of the changes cost other and to related differences Translation security. of the amount and or loss, profit in recognised amortisedare in cost changes other in recognised carrying are in changes amount other income. comprehensive

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 73 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL right to use one or more underlying assets; and the increase increase the and assets; underlying one or more use to right of stand price the alone to commensurate is consideration in the increase in scope. not would modified, modification the and is lease a finance If been an have would lease but the lease, qualify a separate as effect in was modification if the lease operating from a as for accounted is modification the then inception, carrying the of the addition, In amount lease. separate in investment net the as be measured shall asset underlying effective the of the before date immediately lease the not modifications other all to applied 9 is IFRS modification. lease. a separate as be treated to required be to required are leases operating to Modifications effective the from of the leases new as for date accounted disclosure the been to made also have Changes modification. statements. financial lessor’s the in of leases requirements transaction, the leaseback of a sale and event the In a whether consider to applied are 15 of IFRS requirements the whether determine satisfied to is performance obligation asset. sale of an the as for accounted is asset of the transfer a as be recognised to meets transfer requirements the the If right-of-use new the measure must seller-lessee the sale, carrying of proportion the at previous amount the of asset The buyer- retained. right-of-use the to relates that asset the applicable applying by purchase the for accounts lessor 16. IFRS applying by lease the for and standards to equal not sale is the for of consideration value fair the If adjustments requires 16 IFRS then asset, of the value fair the of the transfer When the sale proceeds. the be to made to to continues seller-lessee the then a sale, not is asset recognise the transferred asset and recognises a financial The proceeds. buyer-lessor transfer the to equal liability proceeds. transfer the to equal asset a financial recognises

— — transactions: leaseback and Sale — — — on or beginning years for Theis effectivestandard the of date after 1 January 2019. the expects first the in The for time Group standard the adopt to currently is The standard impact statements. of this financial 2019 being assessed. – Compensation Negative with Features Prepayment 9 Amendments IFRS to 9 Financial IFRS to made amendments The narrow-scope measure to entities enable 2017 December in Instruments compensation negative with assets financial prepayable certain some and loan include amortised Thesewhich at cost. assets, fair at be measured to have otherwise would securities, debt or loss. profit through value Basis of preparation continued The right-of-use asset is subsequently measured on the cost cost on the measured subsequently is asset The right-of-use impairment and depreciation accumulated less cost modelat liability. lease the of re-measurement any for adjusted and when value fair at measured are assets right-of-use However, property all of investment and meet definition they the value fair on the for property accounted investment is other property, of a class to relates asset model. a right-of-use If revaluation the on measured is which equipment and plant on the be measured may asset right-of-use that then model, model.revaluation interest, by increased subsequently is liability The lease for re-measured and payments lease by reduced or modifications. reassessments affected are against liabilities of lease Re-measurements to beenreduced have assets the unless assets, right-of-use profit in recognised further are case which in adjustments nil, or loss. revised discounting by re-measured is liability The lease the in a change is there when rate a revised at payments to option of an assessment the in or a change term lease purchase the underlying asset. lease revised discounting by re-measured is liability The lease a is there when rate discount original the at payments expected amounts the a residual be in in paid to change future in a change is there when or guarantee value to used index or rate in because of a change payments determine those payments. separate as for accounted are modifications lease Certain scope the decrease which modifications When lease leases. separate as for be accounted to required not are lease of the by liability lease the re-measures lessee the then leases, to asset carrying the right-of-use of the amount decreasing or gain Any lease. of the reflect or partial full the termination is lease the of partialor full the termination to relating loss modifications lease other all For or loss. profit in recognised separate as for be accounted to required not are which a making by liability lease the re-measures lessee the leases, asset. right-of-use the to adjustment corresponding be presented should liabilities lease and assets Right-of-use the then not, If liabilities. and assets other from separately This be must disclosed. included are they which in item line definition the meeting assets right-of-use to apply does not within property be must presented of investment which disclosure different contains 16 property. IFRS investment leases. 17 IAS to compared requirements the to similar remains lessors by leases for Accounting either as classified are leases that in 17 of IAS provisions is classification Lease leases. or operating leases finance been a modification. has if there only reassessed a separate as for be accounted to required is A modification the adding by lease of the scope the increases both if it lease

3. — — — — — — — lessor: as Company — — The lease liability takes into consideration, where appropriate, appropriate, where consideration, into takes liability The lease guarantees value residual payments; lease variable fixed and options; of purchase price exercise lessee; the be by made to lease. the terminating for of penalties payments and The cost of the right-of-use asset includes, where appropriate, appropriate, where includes, asset right-of-use of the The cost made payments lease liability; lease of the amount initial the received; incentives less lease of the commencement to prior any for estimate an and lessee; direct of the costs initial to related removal and restoration dismantling, for provision asset. underlying the Lessees are required to recognise a right-of-use asset and a and asset a right-of-use recognise to required are Lessees or leases leases short-term except leases, all for liability lease are which value, low a has asset underlying the where basis. systematic or other line expensed on a straight

— — The effective date of the standard is for years beginning on or beginning years for Theis effective standard the of date after 1 January 2021. the expects first the in The for time Group standard the adopt to currently is The standard impact statements. of this financial 2021 being assessed. Treatments Uncertainty 23 IFRIC Tax Income over and recognition the apply to how clarifies The interpretation uncertainty is there when 12 IAS in requirements measurement the that probable is if it Specifically, tax treatments. income over all then tax uncertain treatment, the accept will taxauthorities tax planned the to according measured are items tax related accept will tax the authorities that probable not is it If treatment. are items tax the then related tax uncertain treatment, the reflect to uncertainty. the of probabilities basis on the measured as be treated to required are facts in Changes circumstances and prospectively. applied and estimates in changes on beginning years for is The effective interpretation of the date or after 1 January 2019. first the for time expectsThe Group interpretation the adopt to statements. financial 2019 the in exempted is it as affected not amendment is The this Group by of taxes. forms all paying from Leases 16 IFRS Leases, 17 IAS replaces which standard a new is Leases 16 IFRS model. The main accounting lessee a single introduces and to likely are which 16 of IFRS issue the from arising changes follows: as are impact Group the lessee: as Company —

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Standards and interpretations not yet effective yet not interpretations and Standards

Recognise revenue when (or as) the entity satisfies a entity the satisfies as) (or when revenue Recognise obligation. performance in the contract. the in Allocate the transaction price to the performance the obligations to transaction the price Allocate Determine the transaction the price. Determine Identify the performance obligations in the contract. the in Identify performance the obligations

72 The objective of IFRS 17 is to ensure that an entity provides relevant relevant entity provides an that ensure to is The 17 objective of IFRS contracts. those This represents faithfully that information assess to statements of financial users for a basis gives information financial entity’s on the contracts have effectthe insurance that flows. cash performance and financial position, IFRS 17 Insurance Contracts Insurance 17 IFRS recognition, the for principles the establishes 17 IFRS of insurance disclosure and presentation measurement, issued. contracts The Group has chosen not to early adopt the following standards standards following the adopt early to not chosen has The Group are and been published have which interpretations, and on or periods beginning accounting Group’s the for mandatory periods: or later after 1 January 2019 3.5.2 The impact of this interpretation is not significant to the financial financial the to significant not is The interpretation impact of this statements. The effective date of the interpretation is for years beginning on beginning years for is The effective interpretation of the date or after 1 January 2018. IFRIC 22 Foreign Currency Transactions and Advance and Advance Currency Transactions Foreign 22 IFRIC Consideration entity has an when circumstances to applies Theinterpretation advance in consideration of amount an received or paid either a non-monetary in or asset resulting currency, a foreign in and the by addressed The specific issue recognised. being liability transaction of the date the determine to how is interpretation on the use to rate exchange the purposes the of determining for when expense income or asset, related the of recognition initial The non-monetarythe derecognised. is or liability asset transaction,the of for date the specifies that interpretation date the is apply, to rate exchange the purposesof determining non-monetary the recognises asset entity the initially on which or liability. The Group has adopted the standard for the first time in the first the in for time standard the adopted has The Group not is The standard impact statements. of this financial 2018 statements. financial the to significant The effective date of the standard is for years beginning on or beginning years for Theis effective standard the of date after 1 January 2018. IFRS 15 also includes extensive new disclosure requirements. disclosure new extensive includes also 15 IFRS — — — —

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 75 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Joint arrangements Joint acquisition. The Group’s investment in associates includes includes associates in investment TheGroup’s acquisition. on acquisition. identified goodwill but significant reduced is associate an in interest ownership the If amounts of the share a proportionate only retained, is influence is income comprehensive other in recognised previously appropriate. where or loss profit to reclassified in recognised is or loss profit of post-acquisition share The Group’s post-acquisition of its and share statement, income the in recognised is income comprehensive other in movements adjustment a corresponding with income comprehensive other Group’s When the carrying the investment. of the to amount the in its interest or exceeds equals associate an in of losses share Group the receivables, unsecured other any including associate, or legal incurred has it further unless losses, recognise does not of the on behalf payments or made obligations constructive associate. is there whether reporting date each at determines The Group is associate the in investment the that objective evidence any of amount the calculates Group the case, the is this If impaired. amount between difference the as recoverable the impairment the its and carrying recognises and value associate of the the in of associates’ of profit/(loss) ‘share to adjacent amount statement. income downstream and upstream from resulting losses and Profits recognised are its betweentransactions and associate Group the of unrelated extent the to only statements financial Group’s the in are losses Unrealised associates. the in interests investor’s of an evidence transaction the provides unless eliminated of policies Accounting transferred. asset of the impairment ensure necessary beenwhere to changed have associates Dilution Group. the by adopted policies the with consistency gains and losses arising in investments in associates are statement. income the in recognised (e) 4.1 as classified are investments Arrangements – Joint 11 IFRS Under The classification ventures. or joint operations joint either of each obligations and rights contractual on the depends arrangement. structure legal the joint of the than rather investor, ventures. The joint only entity has operations Joint i) recognises operations joint in investment an has entity that An expenses of and revenues liabilities, assets, the to its direct right or incurred held jointly of any its and share operations joint expenses. and revenues liabilities, assets, Joint ventures ii) equity the using for accounted are ventures joint in Interests (f) (see level below), statements financial Group the method at Significant accounting policies Significantaccounting loss without subsidiaries interest ownership in Change of control of subsidiaries Disposal Associates

4. If the business combination is achieved in stages, the acquisition stages, acquisition the in achieved is combination business the If equity held previously carryingacquirer’s of the value date the at value fair to re-measured is acquiree the in interest re- such from arising or losses gains any date; acquisition or loss. profit in recognised are measurement is Group the by be transferred to consideration contingent Any Subsequent date. acquisition the at value fair at recognised is that consideration contingent of the value fair the to changes or or loss profit in recognised is or liability be asset deemed an to Contingent income. comprehensive other to a change as and equity re-measured, as not is classified is that consideration equity. within for accounted is settlement its subsequent on gains unrealised and balances transactions, Inter-company eliminated. are betweentransactions companies Group amounts Whennecessary, eliminated. also are losses Unrealised with conform to been adjusted have reported subsidiaries by policies. accounting Group’s the (b) 4.1 in result do not that interests non-controlling with Transactions equity is, as for – that transactions accounted are of control loss capacity their owners. The in as owners the with transactions as the and paid consideration between of any difference value fair carrying of the of the assets of net value acquired share relevant to on disposals or losses Gains equity. in recorded is subsidiary equity. in recorded also are interests non-controlling (c) 4.1 any subsidiary, a over control have to ceases Group Whenthe the at its value fair to remeasured entity the is in interest retained carrying in change the lost, amount with is control when date carrying initial the The is or loss. value profit fair in recognised the for accounting purposes the of subsequently for amount retained interest as an associate, joint or venture financial asset. other in recognised previously amounts any addition, In accounted entity are respect in of that income comprehensive or assets related of the directly disposed had Group if the as for in recognised previously amounts that mean may This liabilities. or loss. profit to reclassified are income comprehensive other (d) 4.1 significant has Group the which over entities all are Associates a accompanying generally control, but not influence rights. voting the betweenof of 50% and 20% shareholding equity the using for accounted are associates in Investments equity the Under the method, method of accounting. carrying the and cost, at recognised initially is investment investor’s the recognise to decreased or increased is amount of after date the investee of the or loss profit of the share Significant accounting policies Significant accounting Subsidiaries Consolidation

Sale or contribution of assets of betweenSale and its or contribution investor an and IAS 28 10 – Amendments IFRS to venture or joint associate 10 IFRS to amendments scope limited made has The IASB in Investments 28 IAS and Statements Financial Consolidated clarify The amendments the Ventures. Joint and Associates between of assets or contribution sales for treatment accounting that They confirm ventures. or joint its and associates investor an non- the on whether depends treatment accounting the joint or associate an to monetary soldcontributed or assets 3 Business IFRS defined in (as a ‘business’ constitute venture a non-monetary the Where constitute assets Combinations). on the or loss gain full the recognise will investor the business, meet the do not assets the of assets. If sale or contribution the by recognised is or loss gain the of a business, definition the in investors investor’s other of the extent the to only investor prospectively. apply The amendments venture. or joint associate of date application the defer decided to IASB the December In its finalised has IASB the as time such until amendment this project equity on the method. research 4. the by adopted were out below set policies The accounting statements. financial of these presentation the in Group 4.1 (a) 4.1 all entitiesSubsidiaries are (including structured over entities) entity when an controls The Group control. has Group the which its from returns variable to, rights or has exposed is to, Group the affect ability the to has entity the and with those involvement fully are Subsidiaries entity. the over its power through returns the to transferred is control on which date the from consolidated control that date the from deconsolidated They are Group. ceases. for account method to acquisition the applies The Group the for transferred The consideration combinations. business assets the of values fair the is subsidiary a of acquisition of the owners former the to incurred liabilities the transferred, The Group. the by issued equity the and interests acquiree or asset any of value fair the includes transferred consideration arrangement. consideration a contingent from resulting liability contingent and liabilities and acquired assets Identifiable measured are combination a business in assumed liabilities The Group date. acquisition the at values fair their at initially on an acquiree the in interest non-controlling any recognises non- the or at value fair at either basis, acquisition-by-acquisition recognised of the share proportionate interest’s controlling net assets. identifiable of acquiree’s amounts expensed incurred. as are costs Acquisition-related NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Separately recognise changes any in the asset ceiling income. comprehensive other through Any reduction in a surplus should be recognised immediately immediately be recognised should a surplus reduction in Any part as either a gain of past or loss or as service profit cost, in a surplus a reduction in words, other on settlement. In or loss was surplus if that even or loss profit in bemust recognised because impact of the of the recognised previously not asset ceiling. Calculate the current service cost and net interest for the for interest net and service cost current the Calculate reporting of the period amendment, after a plan remainder assumptions updated the using by or settlement curtailment change. of the date the from IAS 23 – clarified that if a specific borrowing remains remains if a specific borrowing that – clarified 23 IAS its for ready is qualifying asset outstanding after related the part becomes it or sale, borrowings. use of general intended on beginning years for The is effective standard of the date or after 1 January 2019. IAS 12 – clarified that the income tax consequences of tax consequences income the that – clarified 12 IAS equity as should classified instruments financial on dividends past the or transactions where to according be recognised recognised. profits were distributable generated that events IFRS 11 – clarified that the party obtaining joint control of a control party the that joint – clarified obtaining 11 IFRS its remeasure not should operation a joint is that business operation. joint the in interest held previously IFRS 3 – clarified that obtaining control of a business that is a is that of a business control obtaining that 3 – clarified IFRS stages. in achieved combination a business is operation joint

74 The effective date of the standard is for years beginning on or beginning years for Theis effective standard the of date after 1 January 2019. — — Plan Amendment, Curtailment or Settlement or Amendments – Curtailment Amendment, Plan IAS 19 to defined for clarify accounting the 19 IAS to The amendments benefit plan amendments, curtailments and settlements. They must: entities that confirm — — — — Annual Improvements to IFRS Standards 2015-2017 Cycle ImprovementsAnnual 2015-2017 Standards IFRS to 2017: December in finalised were improvements The following — Long-term Interests in Associates and Joint Ventures – Ventures Joint and Long-termAssociates in Interests Amendments IAS 28 to interests long-term for clarifyThe accounting amendments the part form of substance in which venture, or joint associate an in which but to venture, or joint associate the in investment net the such for account must Entities applied. not is equityaccounting applying before Instruments AASB 9 Financial under interests AASB 128 in requirements impairment and allocation loss the The effective date Ventures. Joint and Associates in Investments on or after 1 January 2019. beginning years for is standard of the To qualify for amortised cost measurement, the negative negative the qualify amortised measurement, for cost To early for compensation be must ‘reasonable compensation a be within must held contract’ of the asset the and termination model. The collect’ effective to of the‘held business date on or after 1 January 2019. beginning years for is standard

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 77 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Assessment whether contractual cash flows are solely are flows cash contractual whether Assessment interest and of principal payments measurement Subsequent sales activity. However, information about activity sales not information is activity.sales However, assessment part but as overall of an isolation, in considered the objective managing stated for Group’s the of how flows realised. cash how are and achieved is assets financial and amount the change would that events contingent flows; of cash timing leverage features; prepayment and extension terms; flows cash specified from to claim Group’s the limit that terms and arrangements); asset non-recourse (e.g. assets of value time of the modify that consideration features rates). of interest periodical reset money (e.g.

Financial assets that are held for trading or managed and whose and or managed trading for held are that assets Financial at measured are basis value on a fair evaluated performance is cash collect contractual to held neither FVPL are because they flows sell cash to and collectflows contractual to both held nor financial assets. (ii) financial of the value fair defined the as is ‘principal’ case, this In consideration defined as is ‘Interest’ recognition. on initial asset basic other risk, credit the for moneyand of value time the for administrative and risk liquidity (e.g. risks costs and lending margin. profit as well as costs), its when only and when investments debt reclassifies The Group changes. assets those managing model for business flows solely cash are contractual the whether assessing In the considers Group the interest, and principal of payments assessing includes This instrument. of the terms contractual that term a contractual contains asset financial the whether flows cash of contractual or amount timing the change could the making In condition. meet this not would it that such considers: Group the assessment, — — — — — be either will losses and gains value, fair at measured assets For equity in investments For or OCI. or loss profit in recorded depend on will this trading, for held not are that instruments election time the at irrevocable an made has Group the whether fair at equity the for investment account to recognition of initial income. comprehensive other through value Financial liabilities amortised value or fair at cost, measured are liabilities Financial or loss. profit through 4.7.3 financialSubsequent initial measurement, instruments to are on or amortised depending value fair cost, at either measured their classification. Significant accounting Significantpolicies accounting continued assetsFinancial and financial liabilities(policy from 1 January 2018) measurement initial and Recognition Classification Classification model assessment Business

those to be measured subsequently at fair value (either (either value fair at subsequently be measured to those and or loss); profit or through OCI through amortised at cost. be measured to those portfolio the objectives and for policies stated the the and whether particular, In practice. in policies of those operation contractual on earning focuses strategy management’s profile, rate interest a particular maintaining revenue, interest duration the to assets financial of the duration the matching cash or realising assets those funding are that liabilities of the assets; sale of the the flows through and performance portfolio the of the how evaluated is management; Authority’s the reported to affect risksthe model that performance business the of the model) business that within held assets financial the (and managed; risks are those how and – e.g. compensated are business of the managers how of the based value fair on the is compensation whether flows and cash collected; contractual or the managed assets periods, prior in of sales timing and volume frequency, the its and sales expectations such about future for reasons the

4. owned wholly are that Nigeria in affiliates other and Subsidiaries taxes to subjected are Nigeria outside incorporated subsidiaries the in shown is this and of operations based territories on the financial statements.Group's 4.7. 4.7.1 money balances, bank and cash recognises initially The Group market placements, investment securities, other financial assets, the is which trade the on date, borrowings and liabilities other a party becomes Group the contractual on which the to date instrument. the of provisions A financial asset or financial liability is initially measured at fair or loss profit through value fair at not item an for plus, value its directly attributable to are transaction that costs (FVPL), issue. or acquisition 4.7.2 From 1 January 2018, the Group classifies its financial assets in assets itsfinancial classifies Group the 1 January 2018, From categories: measurement following the — — model for business entity’s on the depends The classification of the terms contractual the and assets financial the managing flows.cash (i) objective of the of a business assessment an makes The Group a portfolio at held is because this asset level an which model in information best and managed reflects is business the way the considered The information management. to provided is includes: — — — — — Interest income and interest expense income Investment costs Transaction Net gain from financial instrumentsat fair value through profit or loss Income tax expense that amounts previously recognised in other comprehensive comprehensive other in recognised previously amounts that or loss. profit to reclassified are income is associate or an venture a joint in interest ownership the If only retained, is influence or significant control but joint reduced in recognised previously amounts of the share a proportionate or loss profit to reclassified are income comprehensive other appropriate. where 4.2 recognised are assets expensefinancial on and income Interest method. The rate effective the using or loss interest profit in the exactly that discounts rate the is rate effective interest the through receipts and payments cash future estimated where (or, or liability asset expected financial of the life carrying the of the period) a shorter to amount appropriate, financial asset or liability. profit through value fair at assets financial from income Interest of comprehensive statement the in separately disclosed is or loss FVTPL. at measured on instruments income interest as income 4.3 on earned income and dividends of consists income Investment products. fixed income and fund investments equity, Group’s the 4.4 value fair their at initially measured are instruments financial All and assets of financial case the in transaction except costs, plus loss or profit through value fair at recorded liabilities financial statement. expensed income the in transaction are costs where custodians agents, to paid commissions and fees They include advisers. and 4.5 or profit through value fair at instruments financial from gain Net and changes value fair unrealised and realised all includes loss dividend and interest but excludes differences, exchange foreign expense on short dividend and positions. income, 4.6 of any Authority provisions the the Act from exempts The NSIA of or regulations laws fiscal imports fees, taxes, all and or similar the Federal Government, Government, Federal State Capital Federal of the councils Area and Government Local Territory, pay to mandated The however Authority of Nigeria. is Republic suppliers. and tax of its on behalf employees be Authority the may by received income interest and Dividend of origin. tax country the imposed in withholding subject to gross Authority the is to accruing income investment the Thus tax treated expense is withholding related the and taxes of such statement. income the expense in an as NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Equity method

76 When the Group ceases to consolidate or equity account for an for or equity account consolidate to ceases When Group the or significant control joint of control, because of a loss investment its to remeasured entity the is in interest retained any influence, profit in carrying recognised in change the amount with value fair the carryingfor amount initial the becomes value fair This or loss. as interest retained the for accounting purposes of subsequently any addition, In asset. or financial venture joint associate, an income comprehensive other in recognised previously amounts had Group if the as for accounted entity are respectin of that mean may This or liabilities. assets related of the directly disposed Changes in ownership interests that interests non-controlling with transactions treats The Group equity with transactions as of control a loss in result do not in results interest ownership in A change Group. of the owners between carrying the controlling the adjustment of an amounts in interests reflect to relative their interests non-controlling and of the between difference amount the Any subsidiary. the consideration any and interests non-controlling to adjustment equity reserve within separate a in recognised is received or paid Authority. of the owners attributable to The carrying amount of equity-accounted investments is tested tested is investments The carrying equity-accounted of amount impairment. for Unrealised gains on transactions between the Group and itsbetween on transactions and Group the gains Unrealised of the extent the to eliminated are ventures joint and associates eliminated also are losses Unrealised entities. these in interest Group’s of the impairment of an evidence transaction the provides unless investees of equity policies accounted Accounting transferred. asset with consistency ensure necessary been where to changed have Group. the by adopted policies the When the Group’s share of losses in an equity-accounted equity-accounted an in of losses share Group’s When the including entity, the in itsinterest exceeds or equals investment does not Group the receivables, long-term unsecured other any or obligations incurred has it further unless losses, recognise entity. other of the on behalf payments made Under the equity method of accounting, the investments are are investments the equity the Under methodof accounting, recognise to thereafter adjusted and cost at recognised initially of the profits or losses post-acquisition of the share Group’s the in of movements share Group’s the and or loss, profit in investee other in investee of the income comprehensive other from or receivable received Dividends income. comprehensive a reduction in as recognised are ventures joint and associates carryingthe investment. of the amount 4.1 (f) 4.1 The Authority has investments only in joint ventures, there were were there ventures, joint in only The investments Authority has financial the of end the at as operations joint in investments no year. after initially being recognised at cost in the separate financial financial separate the in cost at recognised being afterinitially statements.

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

79 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Investment in equityin securities debt and Investment equity funds private in Investment products income fixed in Investment assets of financial Impairment assets of non-financial Impairment the valuation of the Investee fund’s underlying investments; investments; underlying fund’s Investee of the valuation the provided; (NAV) value asset net of the date value the and date; value latest the since flowscash (calls/distributions) of basis the where instances in and, of accounting basis the information valuation fair value, fair than other is accounting Partner. General fund’s Investee the by provided 4.7.8 by determined is The of equity securities value fair debt and reporting the date. at price bid closing quoted their to reference amortised is at cost measured assets The of financial value fair by determined is and purposes only disclosure for determined reporting the date. at price bid closing quoted the to reference 4.7.9 one Group’s of the in held investments The of the value fair net the using determined value fair at recognised is subsidiaries obtaining: done by is method. This valuation asset i. ii. iii. iv. 4.7.10 fixed-income as some investments classified has The Group are securities income Fixed year. security financial the during form the in interest of fixeda amount pay which securities debt are payments The interest investors. to payments coupon of repaid is invested principal the typically while periodically made on this recognised is Income maturity. at investor the to made. are payments interest the when investment Receivables 4.7.11 its carrying at measured is receivables The of short-term value fair amount. 4.7.12 of financial on impairment details for disclosures risk See credit assets. 4.7.13 The assets carrying non-financial Authority’s of the amounts property tax are assets deferred investment and than other is there whether determine to reporting date each at reviewed exists, then indication such any If of impairment. indication any estimated. is amount recoverable asset’s the carrying if the of an amount recognised is loss impairment An amount. its recoverable exceeds or its unit cash-generating asset group asset identifiable smallest the is unit A cash-generating from independent largely flows, are cash which generates that in recognised are losses Impairment groups. and assets other in or loss profit in recognised losses Impairment or loss. profit the reduce first to allocated respect are units of cash-generating then and units the to allocated goodwill carrying of any amount unit the in assets carrying the other of the amount reduce to basis. rata on a pro of units) (group Significant accounting Significantpolicies accounting continued values of fair Determination 4. of market use maximum makes technique valuation The chosen the specific to on estimates little possible as as relies inputs, participants would market factors all that incorporates Authority, accepted with consistent is and setting in price, a consider instruments. financial pricing methodologies for economic market represent reasonably techniques valuation to Inputs in factors inherent risk-return of the expectations measures and valuation The Authority calibrates instrument. financial the from prices validity for using them tests and techniques same the instrument in transactions market observable current observable data. market available or based on other at instrument of a financial value The fair of the best evidence of the value fair the – i.e. transaction the price is recognition initial fair the some cases, in However, or received. given consideration be may recognition on initial instrument of a financial value evidenced is value fair such If its from transactiondifferent price. transactions market observable other with current comparison by or repackaging) or modification (without same the instrument in data only include variables whose technique based on a valuation in recognised is observable difference the from then markets, cases other In instrument. the of recognition on initial or loss profit is but immediately loss or profit in recognised not is difference the basis appropriate on an instrument of the life the over recognised or the or sold, redeemed, transferred is instrument the or when observable. becomes value fair of financial values fair the recognition, initial to Subsequent price dealer or prices market basedquoted on are instruments traded active the If in markets. instruments financial for quotations is active instrument not or the is asset a financial for market valuation applicable using by determined is value fair the unlisted, length arm’s of recent use the These include techniques. and models flow pricing cash analyses, discounted transactions, participants. market by used commonly techniques valuation cash estimated used, flow are cash analyses discounted Where the and best estimates flows based on management’s are from reporting the date at rate a market-related is rate discount pricing Where conditions. and terms similar with asset a financial based on observable are inputs used, market are models only are profits or losses and reporting the date at indicators factors in changes to relate they that extent the to recognised setting in a price. consider participants will market that 4.7.7 disclosures and policies accounting Group’s of the A number and financial both for value, of fair determination the require been have values Fair liabilities. and assets non-financial determined and for purposes or measurement disclosure based further information When methods. applicable, following the on is values fair determining in made about assumptions the or liability. asset that specific to notes the in disclosed Amortised cost measurement cost Amortised measurement value Fair Derecognition All financial assets other than those measured as described as measured those than other assets financial All FVPL. at measured are above Financial liabilities at measured as liabilities its financial The Authority classifies or loss. profit through value fair amortised and cost 4.7.4 contractual the when asset financial a derecognises TheGroup or when expire, asset flows cash the financial the from to rights a transaction which in in asset financial the transfers it of the of ownership risks rewards the and all substantially Authority the neither which in or transferred are asset financial of risks rewards the and all substantially nor retains transfers Any asset. financial of the control retain does and not ownership qualify for that assets financial transferred in interest Authority the is by or retained created is that derecognition of statement the in or liability asset a separate as recognised the asset, of a financial On derecognition position. financial the between (or difference carrying the asset of the amount portion the to asset of the carrying allocated amount any (including received consideration the and derecognised), recognised is assumed) liability new any less obtained asset new or loss. profit in its when contractual liability a financial derecognises The Group or expire. or cancelled discharged are obligations 4.7.5 amount the is or liability asset The amortised of a financial cost initial at measured is or liability asset financial the which at the or minus plus repayments, principal minus recognition, method of effective the using amortisation interest cumulative the and recognised amount between difference initial the any impairment. reduction for any minus maturity amount, 4.7.6 or paid asset an sell to be received will that price the is value Fair transaction between orderly an in market a liability transfer to participants date. the at measurement of an value fair the Authority the measures When available, that for active an market in prices quoted using instrument are prices active as if quoted regarded is A market instrument. regularly actual and represent and available regularly and readily a If basis. length arm’s on an transactions market occurring Authority the active, not is instrument a financial for market Valuation technique. valuation a using value fair establishes transactions length arm’s recent using include techniques reference parties available), (if between willing knowledgeable, substantially are that instruments of other value fair current the to pricing flow option and cash analyses discounted same, the models. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Fair value through profit or loss (FVPL): Assets that do not do not Assets that (FVPL): or loss profit through value Fair measured amortised or FVOCI are for cost meet criteria the is that investment on a debt or loss FVPL.at A gain or loss profit in recognised FVPL is at measured subsequently period the in in income other within net presented and arises. it which Fair value through other comprehensive income (FVOCI): (FVOCI): income comprehensive other through value Fair flows cash contractual of collection for held are Assetsthat cash assets’ the where assets, financial the selling for and are interest, and of principal payments solely flows represent carrying the are in amount FVOCI. Movements at measured of impairment recognition the for except OCI, through taken gains exchange foreign and income interest losses, or gains When the or loss. profit in recognised are which losses and or loss gain cumulative the derecognised, is asset financial equity from to reclassified is OCI in recognised previously Interest income. other in recognised and or loss profit interest in included is assets financial these from income method. Foreign rate effective the using interest income foreign net in presented are losses and gains exchange as presented expenses are impairment and gains exchange loss. or of profit statement the in item line a separate Amortised cost: Assets that are held for collection of collection for held are Amortised Assets cost: that flows flows cash those represent cash where contractual at measured are interest and of principal payments solely is assets financial these from income amortised Interest cost. rate effective the using interest income interest in included is on derecognition arising or loss gain method. Any other in presented and or loss profit directly in recognised together withgains/(losses) foreign exchange gains and line a separate as presented are losses Impairment losses. or loss. of profit statement the in item

78 Changes in the fair value of financial assets at FVPL are recognised in recognised FVPL are at assets of financial value fair the in Changes other and or loss of profit statement the in income other of reversal (and losses Impairment income. comprehensive FVOCI are at measured on equity investments losses) impairment value. fair in changes other from reportednot separately Equity instruments fair at equity all investments measures subsequently TheGroup present elected has to management Group’s the Where value. is there OCI, in on equity losses and investments gains value fair to losses and gains value of fair reclassification no subsequent investment. of the derecognition the following or loss profit in be recognised to continue investments such from Dividends receive to right Group’s the when income other as or loss profit payments is established. — — Debt instruments ofSubsequentdebt measurement instruments depends on the cash the and asset the managing model for business Group’s measurement three are There flow asset. of the characteristics instruments: its debt classifies Group the which into categories —

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 81 Annual depreciation rate Annual depreciation 5 years 4 years 3.3 years 4 years ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Subsequent costs Subsequent Depreciation Derecognition Assets and fittings Furniture Motor vehicles equipment Computer Office equipment Depreciation methods, useful lives and residual values are are values residual and lives useful methods, Depreciation appropriate. if adjusted and reporting date each at reassessed 4.9.4 on disposal of property derecognised is item An equipment and benefits expected are economic no future or when its from use asset of the on derecognition arising or loss gain Any or disposal. proceeds between difference the disposal as net the (calculated or loss profit in included is carrying the asset) of the and amount derecognised. is period the in asset the The cost of self-constructed assets includes the cost of materials of materials cost the includes assets of self-constructed The cost directly attributable costs to other any directand labour, intended their for condition working a to assets the bringing and items the removing and of dismantling costs the use, capitalised and located are they on which site the restoring the to software integral is costs. that Purchased borrowing part as capitalised of is equipment functionalityrelated the of equipment. When parts different of property item have of an or equipment (major items separate as for accounted are they lives, useful of property equipment. and components) 4.9.2 part of property item of an of replacing The cost or equipment probable is if it carrying the item of the in amount recognised is benefits part the embodied economic within future the will that The reliably. beflow can Authority the its measured and cost to part derecognised. carrying is replaced of the amount servicingThe day-to-day of property of the costs equipment and incurred. as or loss profit in recognised are 4.9.3 basis on a straight-line or loss profit in recognised is Depreciation part of property of each item of an lives useful estimated the over reflects most closely this expected the since equipment and benefits economic future of the of consumption pattern the over depreciated are assets Leased asset. embodied the in Depreciation lives. useful their and term lease of the shorter earlier the at ceases and use for available is asset an when begins for held as or classified derecognised is asset the that date of the Assets Sale 5 Non-current for Held IFRS with accordance sale in Operations. Discontinued and comparative and current the for lives useful The estimated follows: as period are Significant accounting Significantpolicies accounting continued Cash and cash equivalents Property and equipment recognition Initial Assets carried at amortised cost: For loans and receivables, receivables, and Assetsloans amortised carried For at cost: difference the as measured was loss of the amount the value between present carrying the and asset’s the amount losses credit future flows cash (excluding future of estimated financial the at discounted been not incurred) had that The carrying of rate. effective amount original interest asset’s was loss of the amount the and reduced was asset the or held-to-maturity a loan If or loss. profit in recognised for rate discount the rate, interest a variable had investment effective current the was loss impairment any measuring As contract. the practical a under determined rate interest on the impairment measure could Group the expedient, observable an market using value fair instrument’s of an basis the of period, amount the subsequent a in If, price. be could decrease the and decreased loss impairment after impairment the occurring event an objectively to related debtor’s the in improvement an as (such recognised was recognised previously of the reversal the rating), credit or loss. profit in recognised was loss impairment objective was there If available-for-sale: as Assetsclassified assets, financial available-for-sale for of impairment evidence between difference the as – measured loss cumulative the any less value, fair current the and cost acquisition the recognised previously asset financial on that loss impairment equity from recognised and removed – was or loss profit in on equity losses instruments Impairment or loss. profit in reversed not were or loss profit in recognised were that period. value fair the If subsequent a in loss or profit through of a debt instrument classified as available-for-sale increased be objectively could period increase the and a subsequent in was loss after impairment the occurring event an to related reversed was loss impairment the or loss, profit in recognised or loss. profit through

4. — — 4.8 banks, fixed with deposits comprise equivalents cash and Cash of maturities original with instruments financial liquid highly and are which date, acquisition the from months three than less are and value, fair their in changes of risk insignificant subjectto of its short-term management Authority the the in by used commitments. the amortised carried in at cost are equivalents cash and Cash position. of financial statement 4.9 4.9.1 at recognised of property initially are items equipment All and or fair exchanged, of consideration value the includes Cost cost. those and assets, or subsidised of donated case the in value working to item the bringing directly attributablecosts to use. its for intended condition For other monetary other non-monetaryFor and classified securities income. comprehensive other – in available-for-sale as For available-for-sale financial assets that are monetary are that assets financial available-for-sale For currency – translation a foreign in denominated securities amortised the of the in cost changes to related differences changes other and or loss profit in security recognised were other in recognised carrying the were in amount income. comprehensive For financial assets at FVPL – in profit or loss within other other within loss or FVPL profit in – at assets financial For income.

— the sold, were available-for-sale as classified Whensecurities other in recognised adjustments value fair accumulated gains as or loss profit to reclassified were income comprehensive securities. investment from losses and Impairment reporting period of each end whether the at assessed The Group of or group asset a financial that objective was evidence there of or a group asset A financial impaired. was assets financial financial assets was impaired and impairment losses were aas impairment of objectivewas evidence if there only incurred after initial the occurred that events oneof more or result (or event loss event’) that and ‘loss (a asset of the recognition flows cash of the future impact an had estimated on the events) be reliably could that assets of financial or group asset financial as classified of equity case the In investments estimated. fair the in decline or prolonged a significant available-for-sale, indicator an security the of considered value was its below cost that the assets are impaired. — Reclassifications were made at fair value as of the reclassification reclassification of the as value fair at made were Reclassifications or amortised became as value cost new cost the Fair date. recorded or losses gains value of fair no reversals and applicable, Effective made. subsequently were date reclassification before and loans to reclassified assets financial for rates interest at determined were held-to-maturity and categories receivables of cash estimates in increases Further date. reclassification the prospectively. rates effectiveflows adjusted interest measurement Subsequent on change not did recognition initial at The measurement the to Subsequent above. see description 9, of IFRS adoption held-to-maturity and receivables and loans recognition, initial effective the amortised carried using at cost were investments interestmethod. Available-for-sale financial assets and financial or Gains value. fair carried at subsequently FVPL were at assets as recognised were value fair the in changes from arising losses follows: — NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Accounting policies applied until 31 December 2017 December 31 applied until policies Accounting

available-for-sale financial assets. held-to-maturity investments; and loans and receivables; and loans financial assets at fair value through profit or loss; profit through value fair at assets financial

80 Reclassification a non-derivative reclassify trading to choose could The Group category trading financial if the for held out of the asset financial near the in it purpose the of selling for held no longer was asset were receivables and loans than other assets Financial term. category trading for held the of out be permittedreclassified to was that event a single from arising circumstances rare in only addition, In term. near the in recur to unlikely highly and unusual would that assets financial reclassify to choose could Group the for held out of the receivables and loans of meet definition the the had Group if the categories or available-for-sale trading the for assets financial hold these ability and to intention of reclassification. date the maturity at or until future foreseeable The classification depended on the purpose for which the depended which purpose on the for The classification investments were acquired. Management determined the the in and, recognition initial at of its investments classification case of assets classified as held-to-maturity, re-evaluated this reporting period. of each end the at designation — — — Classification in assets its financial classified Group the 2017, December 31 Until categories: following the — 4.7.14 elected but has 9 retrospectively, IFRS applied has The Group the As a result, information. comparative restate to not be accounted to continues provided information comparative policy. accounting previous Group’s the with accordance in for The recoverable amount of an asset or cash-generating unit is is unit or cash-generating asset of an amount The recoverable In sell. to costs less its and value fair use in of its value greater the flows cash are future estimated the use, in value assessing rate a pre-tax discount using value present their to discounted of value time of the assessments reflects market that current losses Impairment asset. the risks the specificmoney and to reporting date each at assessed periods are prior in recognised longer or no decreased has loss the that indications any for the that extent the to only reversed is loss exists. impairment An carrying the carrying exceed does not asset’s amount amount or of depreciation net been determined, have would that been had recognised. loss impairment no if amortisation, or loss. profit in recognised are losses of impairment Reversals

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 83 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Below grants) borrowings market (Government Capital and other commitments Sale of NPK fertilisers NPK of Sale of control when recognised is revenue fertilisers, NPK of sales For been goods the when have being transferred, goodsthe has Agro-dealers premises. blender’s the at up pick for available made sale. this under customers only the are governments state and customers. the to fertilisers the deliver to no provision are There goods the when have Group the by recognised is A receivable agro-dealers state the and by up pick for been available made the which at time in point the represents this as government, based theon unconditional becomes consideration to right the only as its with customers, has company of sale the contract No element due. is payment before required is of time passage credit with made are sales the as deemed is present of financing practice. market with consistent is which 90 of days terms customers to granted warranties and policies no return are There customers, The sold contract. directly the to goodsunder are of intermediary. no form is there based on concessions sold on price are fertilisers The NPK of Nigeria. Government Federal the with agreed amounts based price on the recognised is sales these from Revenue and (agro-dealers customers the with specifiedcontract the in loss a to leads price agreed the Where governments). state reimburses government federal the company, the for position price. cost below selling entitythe for 4.17 benefits Limited, NAIC-NPK its subsidiary through The Group, Sector Support Real Facility of Nigeria’s Bank Central the from of Nigeria/ Government Federal the where Scheme (RSSF) banks provide some commercial through of Nigeria Bank Central interest subsidised at industries certain in companies to finance fair their at recognised are government the from Grants rates. will grant the that assurance a reasonable is there where value attached all with comply will Group the and be received deferred are costs to relating grants Government conditions. period the over statement income the in recognised and intended are they that costs the with them match necessary to to compensate. 4.18 standards of the any defined in not is ‘commitments’ The term outflow an to commit to intention the as to be referred but may benefits. embodying economic of resources Group the from incur to made is a decision when arises a commitment Generally, similar (or contract of a purchase form the in a liability be would commitment a contractual Such documentation). determine to actions taken to, limited but not by, accompanied outflow or a reliable resource eventual the of amount the establish be satisfied to to conditions and quote, a e.g. estimate, delivery schedules. e.g. obligation, an

Significant accounting Significantpolicies accounting continued benefits Short-term Revenue the Group has a present right to payment for the asset; asset; the for payment to right a present has Group the customer; the to been has transferred asset of the title legal the asset; of the possession physical taken has customer the of risks rewards and significant the has customer the and asset; of the ownership asset. the accepted has customer the fertilisers. of NPK Sales Interest/investment income. Identify the contract with the customer customer Identify the with contract the Identify distinct goods the or services transaction the price Determine transaction the price Allocate revenue recognise to when Determine

4. more due are that plan a defined contribution to Contributions the periodafter the of which end the in months 12 than present their to discounted service the are render employees reporting the date. at value 4.15.2 an on measured are benefit obligations employee Short-term service expensed related the as are and basis undiscounted provided. is expected beamount the paid for to recognised is A provision if the plans or profit-sharing bonus cash short-term under pay to obligation or constructive legal a present Authority has employee the of past by service provided a result as amount this reliably. be can estimated obligation the and 4.16 entity’s of an course the in arising income defined as is Revenue ordinary activities. a entity the satisfies as) (or when recognised is Revenue good or promised a transferring by performanceobligation transferred is asset An customer. the to asset) an service(i.e. asset. of that control obtains customer the as) (or when is performancea obligation whether determines TheGroup a or whether time, over recognised) is revenue satisfied (and recognised) is revenue satisfied (and is performance obligation the by derived revenue contracts. All all for time in point a at met because has it time in a point at recognised is entity (NSIA) be considered. should which of control of transfer indicators all following: the includes This — — — — — sources: following the from revenue recognises The Group — — to revenue of recognising principle meet core the to order In customers goods or services to of promised depict transfer the which to reflects that of consideration amount an amount the in goods or those for entity expectsan exchange in be entitled to are: steps five these services, adopted; a five-step model is a) b) c) d) e) Contingent assets Contingent Contingent liabilities Contingent Employee benefits benefits employment Post

Contingencies 4.14 4.14.1 past from events arises that asset a possible is asset A contingent occurrence the by only be confirmed will existence whose and not events future uncertain of one or more or non-occurrence entity. of the control the within wholly inflow an when of economic disclosed is asset A contingent virtually is of income realisation When the probable. benefit is its and a contingent not is asset related the then certain, appropriate. is recognition that ensure to continually assessed are assets Contingent reflected financial the in appropriately are developments statements. 4.14.2 A contingent liability is a possible obligation that arises from past from arises that obligation a possible is liability A contingent the by only be confirmed will existence whose and events future uncertain of one or more or non-occurrence occurrence entity; of the or a present control the within wholly not events recognised not but is past from events arises that obligation outflow an that probable not resources of becauseis it settle theto benefits be required embodyingwill economic be measured cannot obligation the of amount or the obligation; sufficient reliability. with of an possibility the unless disclosed is liability Contingent A remote. benefit is embodyingoutflow economic of resources outflow an which for part the for of obligation of the provision is benefits probable embodying is economic resources where extremely circumstances the in rare except recognised, are liabilities Contingent be can made. estimate no reliable outflow an whether determine of to continually assessed become probable. benefit has economic 4.15 4.15.1 plans Defined contribution are plans defined contribution to contributions for Obligations due. are they when or loss profit expense in an as recognised scheme Pension retirement The a funded defined Authority contribution operates the of provisions the under itsbenefit for employees scheme employer the and The employee Act Reform 2014. Pension qualifying of the each respectively 10% and 8% are contributions salary.employee’s are plans defined contribution to contributions for Obligations in or loss benefit profit expense in employee an as recognised service entitling rendered have periodthe employees the when contributions. the to them NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Trade payables Trade Trade receivables Trade Intangible assets – software Inventories

82 4.13 the in been acquired have that obligations are payables Trade as classified are payable Accounts of business. course ordinary in (or or less one year within due is if payment liabilities current they not, If if longer). cycle business of the operating normal the are payables Trade liabilities. non-current as presented are at measured subsequently and value fair at initially recognised method. effective the amortised using cost interest Net realisable value is the estimated selling price in the ordinary the in price selling estimated the is value realisable Net of completion costs estimated the less of business, course and selling. Inventories are valued at the lower of cost and net realisable realisable net and of cost lower the at valued are Inventories in incurred expenditures includes of inventories The cost value. the costs. In production or conversion inventories, the acquiring cost progress, in work and manufacturedof case inventory based overheads production of share appropriate an includes activityon normal level. 4.12 Trade receivables are recognised initially at fair value and value fair at initially recognised are receivables Trade effective the amortised using at cost measured subsequently is collection If impairment. for provision less method, interest cycle of operating normal the in (or expected or less one year in not, assets. If current as classified are they if longer), business the assets. non-current as presented are they 4.11 Subsequent expenditure on software only expenditure capitalised is assets Subsequent benefits embodied economic the in future the increases it when is expenditure other All relates. it which to specific asset or loss profit in recognised is Amortisation expensed incurred. as of three life useful estimated the over basis on a straight-line The amortisation use. for available is it that date the from years, each at of software life useful method reassessed and are appropriate. if adjusted and end year financial Software acquired by the Authority is stated at cost less cost at stated AuthoritySoftware the is by acquired accumulatedamortisation and accumulated impairment losses. expected the that probable future is Software if it recognised is flow will to asset the attributable to are benefits that economic software of the reliably. cost entity; the the and be can measured part of software forms cost the of Expenditure that meets that part as software. capitalised of the is criteria recognition the model. After initial cost the using for Software accounted is software the accumulated less cost carried at recognition, is losses. impairment accumulated any and amortisation 4.10

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 85 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Financial risk management risk Financial Approachrisk management to Credit risk risk of credit Management

6. risks: activities a variety expose to it financial of The Group’s and risk credit risk), price and risk currency (including risk market programme management risk overall risk. Theliquidity Group’s seeks and markets to unpredictability the on financial of focuses effects financial adverse potential Group’s the on minimise performance. 6.1 risks is managing for strategy outlook,With a global Group’s the the and universe investment the within risk understand to affect can of monitoring, aim that the with externalities this, andcontrolling mitigating against undesired events. best recommended possible, wherever adopted, has The Group effective cost and evaluation identification, the practice in are they that possible, far as as ensure, of risks to control the to acceptable is that a level to or reduced eliminated seeks the explain to Framework Risk The Group’s Authority. and management, risk to approach underlying Authority’s of Board the of responsibilities and roles the documents parties. key It department other and Management Risk Directors, and process, aspects management key risk of the outlines also reporting procedures. main the identifies 6.2 instrument a financial a counterparty to that risk the is risk Credit has it that or commitment obligation an discharge to fail will the to loss a financial in resulting Group, the with into entered trade held, securities debt from principally arises It Group. cash and cash from also and advances, and receivables equivalents. 6.2.1 to its exposure minimise to is policy risk on credit The Group’s dealing by of default risk higher perceived with counterparties the hence standards, credit meeting counterparties with only ratings. meet credit set that counterparties with deals only Group Critical accounting estimates and judgements accounting Critical continued assets financial of Impairment equity investments of private value Fair 5. 5.1.3 forward-looking of more use the information 9 requires IFRS supportable and forecasts of future reasonable including capability developed the has The Group conditions. economic the capture and scenarios of economic model a number to a represents ECL overall the ensure to losses impact on credit Appropriate outcomes. of economic distribution reasonable the around been established has oversight and governance process. 5.1.4 one of by held equity private investments of the The values fair reporting the at been determined has subsidiaries Group’s the into takes method. This valuation asset net the using date different the from obtained as values asset net the account financial available most recent funds’ equity investee private distributions and contributions considering information, reporting the and date between valuation asset net last the and unquoted are equityperiod. These private investments end the at as available not was information market comparable based on values fair the reportingof the period. Determining be will investment the that assumes approach valuation this The values. these sensitivity of at reporting the date at realised disclosed is made assumptions the in changes to values fair the 6. Note in Financial assets and assets Financial liabilities classification active market. For financial assets at fair value through OCI OCI through value fair at assets financial For active market. Authority the performs unquoted, are which equity investments available using investments on these exercise valuation a fair values. fair their determine to inputs applicable and one of by held equity private investments of the The values fair reporting the at been determined has subsidiaries Group’s the into takes method. This valuation asset net the using date different the from obtained as values asset net the account financial available most recent funds’ equityprivate investee distributions and contributions considering information, reporting the and date between valuation asset net last the and unquoted are equity period.These investments private end the at as available not was information market comparable based on values fair the reportingof the period. Determining be will investment the that assumes approach valuation this The values. these sensitivity of at reporting the date at realised disclosed is made assumptions the in changes to values fair the 6. Note in value fair following the using values fair The Authority measures making in used reflectsprocess and that nature the hierarchy the measurements: for active an market in (unadjusted) price market Quoted 1: Level instrument. identical an based on observable either inputs, techniques Valuation 2: Level This prices). from derived (i.e. or indirectly prices) as directly (i.e. market quoted using: valued instruments category includes for prices quoted instruments; similar for active in markets prices considered are that markets in instruments or similar identical all where techniques valuation or other active; than less observable directly indirectly or are inputs from significant market data. based on not are that inputs using techniques Valuation 3: Level instruments all category This includes observable data. market based on not inputs includes technique valuation the where a have observable unobservable the and could inputs data category This effect valuation. significant instrument’s on the for prices based valued on quoted are that instruments includes unobservable adjustments significant where instruments similar reflect to between required differences the are or assumptions instruments. 5.1.2 assets for scope provide policies The accounting Authority’s different into inception on be designated to liabilities and of the Details circumstances. certain in categories accounting are liabilities and assets of financial classification Authority’s 4.7. Note in given NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Valuation of financial instruments of financial Valuation Critical judgementsCritical in applying the Authority’s policies accounting Critical accounting estimates and judgements accounting Critical Intercompany receivablesIntercompany

84 The Authority’s accounting policy on fair value measurements is is policy measurements value on fair The accounting Authority’s assets financial of quoted The 4. values fair Note under discussed through value fair at assets financial and OCI through value fair at an in quoted prices to reference by determined are or loss profit 5.1.1 Critical accounting judgements made in applying the Authority’s Authority’s the applying in made judgements accounting Critical include: policies accounting 5.1 The estimates and underlying assumptions are reviewed on an reviewed are assumptions underlying and The estimates recognised are estimates accounting to on-going Revisions basis. any in and revised, are estimates the period the which in in Board the with periods affected.future discusses Management of the selection disclosure and development, the of Directors the and estimates, and policies accounting critical Authority’s These disclosures estimates. and policies of these application supplement the commentary on financial management. risk The estimates and associated assumptions are based on are assumptions associated and Theestimates believed are factors other that various and experience historical which of results the circumstances, the under be reasonable to about carrying judgements the of making values basis the form other from apparent readily not are that liabilities and assets of differ estimates. these may from results Actual sources. The preparation of financial statements in conformity with IFRS IFRS with conformity in statements of financial The preparation requires management judgements, make to estimates and affect reported and that of policies application the assumptions expenses. and incomes liabilities, and of assets amounts 5. Intercompany receivables represent balances due from the from due balances represent receivables Intercompany The year. financial of the end the at as subsidiaries Authority's carrying the represents statements financial on the balance year. of the end the at as amount 4.20 Comparatives 4.19 to been reclassified have necessary, where figures, Comparative accounting current the in classifications in changes to conform year. These preconditions ensure that the information relating to to relating information the that ensure These preconditions measurement. of reliable capable and relevant is commitments reporting the on or before a contract into enter may The Group a periodse.g. accounting subsequent over expenditure for date of purchase the of infrastructure construction assets, for contract consultancy significant or equipment and plant of items major reportingexists the at a commitment events, contracts. these In has but work expenditure for contracted has Group the as date been made. have no payments and commenced not

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

87 – – – – – – – – – – ’000 2017 ₦ Authority 6,363,645 6,766,061 7,747,972 6,541,532 9,292,907 7,800,593 5,803,799 3,737,387 31 December 31 65,416,925 17,742,162 134,641,851 271,854,834 271,854,834

– – – – – – – – – – – ’000 2018 ₦ Authority 4,043,465 4,109,896 6,217,504 6,719,465 3,270,312 3,394,422 31 December 31 28,732,784 16,603,012 30,239,146 182,472,004 285,802,010 285,802,010

– – – – – – – ’000 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦ 175,437 6,363,645 6,766,061 7,747,972 6,541,532 1,864,400 9,292,907 5,322,660 7,800,593 5,803,799 3,737,387 31 December December 31 66,409,768 17,742,162 134,641,851 280,210,174 280,210,174

– – – – – – – – – ’000 2018 Group ₦ 4,109,896 4,043,466 6,217,503 3,394,422 6,719,465 3,270,312 1,641,036 1,641,036 31 December December 31 28,732,784 16,603,012 30,239,146 182,472,004 287,443,046 285,802,010 Financial risk managementFinancial continued BAA1 (Moody) B2 (Moody) B (S&P) BBB+ (GCR) (Fitch) CCC A2 (Moody) A3 (Moody) B (Fitch) B+ (Fitch) A- (GCR) AAA (Fitch) A (Moody) Investment securities Investment ratings credit with external Counterparties assets at amortised cost Financial (2017: Held-to-maturity and loans & receivables) A+ (S&P) B (S&P) A1+ (Fitch) B2 (Moody) B3 (Moody) BB+ (Fitch) A+ (Fitch) Total financial assets at amortised cost (exclusive of impairment) amortisedat financial assets cost (exclusive Total Counterparties with external credit ratings credit with external Counterparties assets at amortised cost Financial (iv) 6.

– – – – – – – – ’000 2017 832 ₦ 1,952 Authority 13,628 883,526 682,052 3,041,302 5,489,286 31 December 31 8,545,048 32,599,743 38,113,681 33,483,269 72,280,954

– – – – – – – – ’000 2018 575 ₦ Authority 20,377 227,499 1,045,784 1,736,947 4,334,246 31 December 31 1,066,161 27,794,206 32,245,474 30,346,432 32,245,474 29,531,728 35,974,338

– – – – ’000 2017 Group ₦ 9,135 5,593 13,628 73,031 339,003 883,526 316,208 316,208 6,492,094 3,624,422 4,045,473 7,762,495 31 December December 31 32,599,743 12,391,280 22,020,278 33,822,272 46,219,145

– – – – – – – – ’000 2018 575 Group ₦ 20,377 5,922,236 8,976,731 4,548,081 31 December December 31 16,113,745 27,794,206 32,245,474 16,113,902 32,245,474 43,908,683 22,056,358 35,581,170 As at 31 December 2018, all financial assets were neither past neither were assets financial all 2018, December 31 As at are assets financial quality The of these credit nor impaired. due below:table the in disclosed NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Exposure to credit risk credit to Exposure

B2 (Moody) B (Fitch) Total money market placements market money Total A-2 (S&P) A+ (Fitch) Counterparties with external credit ratings credit with external Counterparties B (GCR) B (S&P) BBB+ (S&P) Bank balances ratings credit with external Counterparties A (Fitch) A+ (Fitch) B (GCR) B2 (Moody) bank balances Total Money market placements Money market ratings credit with external Counterparties B+ (Fitch) A- (S&P) Counterparties without external credit ratings credit without external Counterparties Other receivables receivables Trade assets) other assets (Financial Total Intercompany receivables Intercompany staff to Advances 86 Credit quality of financial assets maximum the represents assets Thecarrying financial of amount credit exposure per credit rating. 6.2.2

Notes to theConsolidated andSeparate Statements Financial (continued) (iii) Other assets (i) (ii) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

89 – ’000 Total Group ₦ 8,333,282 3,984,976 1,641,036 32,245,474 43,908,683 11,134,143 16,113,745 10,260,970 93,069,036 26,841,410 22,963,236 178,487,028 448,983,019

– – – – – – – – – ’000 Group ₦ America 14,376,955 26,841,410 22,963,236 64,181,601

– – – – – – – – – – – – – Asia ’000 Group ₦ ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL

– – – – – – – – – – – – – ’000 Group ₦ Middle East Middle

– – – – – – – – – – – – – ’000 Group ₦ Europe

– – – – – – – – – – – – – ’000 Group ₦ Rest of Africa Africa of Rest

– – – ’000 Group ₦ Nigeria 8,333,282 3,984,976 1,641,036 32,245,474 29,531,728 11,134,143 16,113,745 10,260,970 93,069,036 178,487,028 384,801,418 Financial risk managementFinancial continued 6. assets of financial risk of 6.2.3 Concentration Geographical sectors at as region geographical by carrying categorised as their at amounts, exposure risk Group's the down breaks table Thefollowing of based country on the regions to exposures allocated has Group the table, this For 2017. December 31 and 2018 31 December of its counterparties. domicile 31 December 2018 and cash equivalents Cash Money market placements Bank balances Other assets Other receivables Account receivables receivables Account Advances to staff to Advances Cost incurred on behalf of incurred Cost partyrelated Investment securities Investment amortisedAt cost Eurobonds Nigerian treasury bills Open market operations bills) bills (OMO Fixed deposits Fixed Loans and receivables: Loans At FVTPLAt US treasury notes Fixed income products Fixed

– ’000 2017 ₦ Authority 869,908 869,908 2,388,190 1,528,500 6,075,231 31 December 31 9,991,921 121,597,009 131,588,930

– – – – ’000 2018 ₦ Authority 1,626,000 7,934,647 31 December 31 7,934,647 33,327,803 113,515,375 148,469,178

– ’000 2017 Group ₦ 869,908 869,908 2,388,190 1,528,500 6,075,231 31 December December 31 9,991,921 138,780,522 148,772,443

– – – – ’000 2018 Group ₦ 1,626,000 9,474,482 31 December December 31 9,474,482 33,327,803 130,141,210 165,095,013

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Financial assets at FVOCI (2017: Available for sale) for assets at FVOCI (2017: Available Financial ratings credit with external Counterparties B2 (Moody) BBB- (GCR) Baa3 (Moody) Baa3 (Moody) parties ratings credit without external Counter and loss profit at FV through assets Financial at FVTPL financial assets Total Total financial assets at FVOCI (2017: Available for sale) Available (2017: at FVOCI financial assets Total Counterparties without external credit ratings credit external without Counterparties sale) for at FVOCI assets (2017: Available Financial ratings credit with external Counterparties AAA (Moody)

88

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

91 ’000 Total ₦ 1,952 Authority 8,545,048 1,565,578 32,599,743 38,113,681 17,341,779 24,805,655 12,208,697 254,513,055 389,695,188

– – – – ’000 ₦ America Authority 927,055 2,763,225 6,541,531 24,805,655 12,208,697 47,246,163

– – – – – – – – – – Asia ’000 ₦ ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Authority

– – – – – – – – – – ’000 ₦ Authority Middle East Middle Credit risk measurement risk Credit Credit grading risk

– – – – – – – – ’000 The Authority considers a debt security to have low credit risk risk credit low security have a debt to The Authority considers globally the to equivalent is rating risk credit their when sovereign a is it or grade’ ‘investment of definition understood Bonds and bills Treasury local the currency e.g. in issued debt Government. Nigerian the by issued default from result portion the that are ECL of ECL 12-month 12 the within possible are that instrument on a financial events losses credit are ECL Lifetime after reporting the date. months expected the over life events default possible all from result that instrument. of a financial 6.2.5 purposes management risk for exposure credit of Theestimation exposure the as of models, use the requires and complex is expected flows cash conditions, market in changes with varies of a risk of credit The assessment of time. passage the and likelihood the to as furtherportfolio estimations entails of assets of default and ratios loss associated of the of defaults occurring, measures The between Group counterparties. correlations Default at Exposure (PD), Default of Probability using risk credit approach the to similar is This (LGD). Default Given Loss and (EAD) Expected (ECL) Loss purposes the of measuring for used Credit below ECL of 6.2.5.2 measurement on Note to Refer 9. IFRS under more details. for 6.2.5.1 reflect of that gradings its assessment risk credit uses The Group The Group counterparties. individual of default of probability the of categories various the to tailored models rating uses ₦ Europe Authority 7,747,972 7,747,972

– – – – – – – – ’000 ₦ Authority 6,363,645 Rest of Africa Africa of Rest 6,363,645

– – ’000 ₦ 1,952 Nigeria Authority 638,523 5,781,823 32,599,743 38,113,681 17,341,779 233,859,907 328,337,408 Financial risk managementFinancial continued assets of financial Impairment financial assets that are debt instruments; and receivables; and assets other financial guarantee contracts issued. low have to determined are that securities investment debt and reporting the date; at risk credit on receivables) other than (other instruments financial other their since significantly increased not has risk credit which initial recognition.

6. 31 December 2017 and cash equivalents Cash Bank balances 6.2.4 on a forward-looking assesses Group the 1 January 2018, From its with debt expected the associated losses basis credit FVOCI. amortised carried and The at impairment cost instruments been a has there methodology on whether depends applied risk. credit in increase significant approach simplified the applies Group the trade receivables, For to expected losses requires lifetime which 9, permitted IFRS by receivables. of the recognition initial from be recognised expected for credit allowances loss The Authority recognises not are that instruments financial following on the (ECL) losses measured at FVPL: — — — on equity investments. recognised is loss No impairment to equal amount an at allowances loss The Authority measures as measured are which following the for except ECL, lifetime ECL: 12-month — — always are receivables and assets other for allowances Loss ECL. lifetime to equal amount an at measured Other assets Other receivables Account receivables Account Intercompany receivables Intercompany Advances to staff to Advances Investment securities Investment Held-to-maturity: Eurobonds Loans and receivables: Loans deposit Fixed Available-for-sale US treasury notes Fixed income products Fixed

– ’000 ’000 Total Total Group ₦ ₦ 5,593 Authority 316,208 175,437 609,069 2,171,076 3,984,976 32,245,474 29,531,728 22,020,278 13,613,809 32,599,743 10,260,970 17,341,779 93,069,036 24,805,655 22,963,236 24,805,655 12,208,697 178,487,028 262,692,959 397,519,179 386,389,227

– – – – – – – – – – – – – – – ’000 ’000 Group ₦ ₦ America America Authority 927,055 11,528,527 24,805,655 22,963,236 24,805,655 12,208,697 47,768,891 49,469,934

– – – – – – – – – – – – – – – – – – – – – Asia Asia ’000 ’000 Group ₦ ₦ Authority 6,541,533 6,541,533

– – – – – – – – – – – – – – – – – – – – – – – ’000 ’000 Group ₦ ₦ Authority Middle East Middle Middle East Middle

– – – – – – – – – – – – – – – – – – – – – ’000 ’000 Group ₦ ₦ Europe Europe Authority 7,747,972 7,747,972

– – – – – – – – – – – – – – – – – – – – – ’000 ’000 Group ₦ ₦ Authority 6,363,645 Rest of Africa Africa of Rest Rest of Africa Africa of Rest 6,363,645

– – – – – ’000 ’000 Group ₦ ₦ 5,593 Nigeria Nigeria Authority 316,208 175,437 609,069 2,171,076 3,984,976 32,245,474 29,531,728 10,491,751 12,686,754 32,599,743 10,260,970 17,341,779 93,069,036 178,487,028 242,039,809 349,750,288 316,266,143 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Cash and cash equivalents Cash Money market placements Cash and cash equivalents Cash Money market placements 90 31 December 2018

31 December 2017

Notes to theConsolidated andSeparate Statements Financial (continued) Bank balances Bank balances Other assets Other receivables Other assets Other receivables Advances to staff to Advances Account receivables Account Investment securities Investment amortisedAt cost Eurobonds Advances to staff to Advances Nigerian treasury bills Investment securities Investment Held-to-maturity: Eurobonds Open market operations bills) bills (OMO Nigerian treasury bills Fixed deposits Fixed Loans and receivables: Loans deposit Fixed At FVTPLAt US treasury notes Available-for-sale Nigerian treasury bills Fixed income products Fixed US treasury notes Fixed income products Fixed Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 93 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL The financial 90 instrument is or more pastdays due on contractual payments; if the Authorityexcept the can rebut that ‘90past days does due’ presumption not a default for that represent event particular financial instrument. All facilitiesAll with a rating grouped of D are stagein 3.

— — Stage 3 Stage 3 The financial performing instrument is with or but more 30 days less 90 than days past contractual due on any payment; if the Authorityexcept the can rebut that past days does due’‘30 presumption not credit in risk significant increase represent for particular that financial instrument. More than three (3) notches downgrade notches in More three (3) than the external rating of the obligor for financial instruments rated S&P were that equivalent of AAA AA- to origination. at downgrade notches More two than in (2) the external rating of the obligor for financial instruments rated S&P were that BB- to origination.equivalent at of A+ downgrade or more notch the in One (1) externalrating of the obligor forfinancial instruments rated S&P were equivalent that of B+ and below origination. at

— — — — Stage 2 Stage 2 Financial risk managementFinancial continued Quantitative criteria

The financial performing instrument is pastwith days 30 less than due on any contractual payment. Less than three (3) notches downgrade notches in three (3) than Less the external rating of the obligor for financial instruments rated S&P were that equivalent of AAA AA- to origination. at downgrade notches two than inLess (2) the external rating of the obligor for financial instruments rated S&P were that BB- to origination.equivalent at of A+ No downgrade the in external rating of the obligor for financial instruments were that rated S&P equivalent of B+ and below at origination.

Stage 1 — 6. 6.2.6.1 Stage 1 — — — Backstop:ii. decrease/increase significant assess to presumption past due days 30 known otherwise as The backstop the Authority uses indicator contractual which for days of number the and performance status instrument’s financial the on depends of SICR Evidence risk. credit in past due. are payments basis. Authority the annual on an by be reviewed will criteria quantitative these for The thresholds The use of quantitative criteria requires the Authority to refresh its quantitative metrics at least annually. The the Authority adopted annually. least metrics at its quantitative refresh Authority the to requires criteria The of quantitative use stage allocation: vis-à-vis (SICR), Risk Credit in Increase Significant purpose the of assessing for criteria quantitative following i. External rating parameter: of risk. Evidence credit in increase/decrease significant assess to of obligors external ratings in changes The Authority monitors of notches (number of movement extent the and recognition initial at on rating depends (SICR) Risk Credit in Increase Significant reporting date. at as downgrade/upgrade) higher with obligors Generally, of SICR. evidence grade as rating each across movement notches The different Authority applies The rating. credit lower with obligors with compared when SICR, evidence to downgrade notches more require would rating credit is movement a one-notch while instance, grades. For rating the down movement with increases exponentially PD that is logic AAA an for deemed significant is movement a three-notch origination, at CCC rated instrument a financial for deemed significant rated financial instrument. Authority: of the instruments financial the stages to allocating in used criteria quantitative of the a table is Below Significant increase in credit risk credit in increase Significant the risk of default on the exposure as at the date of initial of initial date the at as exposure on the of default risk the recognition. based on internal and external objective evidence of external objective and evidence based on internal impairment. reporting the date; at as exposure on the of default risk the with

— since significantly increased has risk credit whether Assessing identifying requires instrument of a financial recognition initial Modifying instrument. of the the recognition of initial date the affect also may this instrument of a financial terms contractual assessment. factors to used quantitative and qualitative of the Details in highlighted are risk credit in increase significant the determine nextthe sub-head. — in is instrument a financial of whether assessment the into Inputs reflect vary to time may over significance their and default changes in circumstances. 6.2.6 considers that a framework established has The Group past due days ‘backstop’ (30 and quantitative, qualitative, on risk credit the whether determine to indicators presumption) a particular financial instrument has increased significantly since Group’s the with The aligns framework recognition. initial credit managementinternal risk process. increased has risk credit whether determining for Thecriteria varywill portfolio backstop by include significantly will and based on delinquency. aon default) of risk (i.e. risk credit the whether determining In financial instrument has increased significantly initial since supportable and reasonable consider will Group the recognition, or cost undue without available and relevant is that information information qualitative and effort, quantitative both including experience, based historical Authority’s on the analysis and The forward-looking and expert information. assessment credit in increase significant a whether assess primarily Authoritywill its with staging line in exposure an for occurred has risk credit criteria by comparing: — NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Measurement of ECL Measurement

quantitative: e.g. 90 days overdue status and non-payment and status overdue 90 days e.g. quantitative: Authority; the to same of the issuer obligation of another and qualitative: e.g. breach of covenants that are deemedas are that of covenants breach e.g. qualitative: default events; the borrower is more than 90 days past due on any material material on any past due 90 days than more is borrower the Group. the to obligation credit the borrower is unlikely to pay its credit obligations to the to obligations its credit pay to unlikely is borrower the actions such to Group the by recourse without full, in Group or held); is security any (if realising as financial guarantee contracts: they are measured as the as measured are they contracts: guarantee financial any less holder the expectedreimburse to payments the Authority from the expects that amounts recover to party. other or any debtor the holder, financial assets that are credit-impaired at the reporting date: reporting the date: at credit-impaired are that assets financial between difference the as gross the measured are they future of estimated value present carrying the and amount flows; and cash financial assets that are not credit-impaired at the reporting the at credit-impaired not are that assets financial cash of all value present the as measured are they date: between flows difference shortfalls the cash the to due (i.e. cash the and contract the with accordance entitythe in flows Authority the expects that receive); to

92 — — In assessing whether a borrower is in default, the Group will will Group the default, in is a borrower whether assessing In are: that indicators consider Overdrafts are considered past due once the customer has has customer the once past due Overdrafts considered are is that or been advisedlimit of a advised limit an breached outstanding. amount current the than smaller — — Default definition be in to asset a financial consider will Group the 9, IFRS Under default when: — — — ECL are a probability-weighted estimate of credit losses. They losses. of credit estimate a probability-weighted are ECL follows: as measured are 6.2.5.2 The credit grades are calibrated such that the risk of default risk the that such calibrated are grades The credit example, For grade. risk higher each at exponentially increases between A- PD A and the an in difference the that means this between PD the a B in difference the than lower grade is rating grade. B-and rating counterparty. Specific information collected at the time oftime the at collected Specific information counterparty. and income, disposable as (such assets financial the acquiring industry and type) turnover and exposures; for of collateral level external with supplemented is model. This rating this fed into is on individual information scoring bureau credit as such data expert enable models the addition, judgement In borrowers. internal final the be fed into to unit management risk the from which considerations for allows This exposures. for rating credit into inputs part as data be other captured not of the may the model.

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 95 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Stage 3 There is significant drop in theThere in significant obligor’s drop is or profitabilityrevenue the reporting at which in a could result significantdate changethe in borrower’s ability meet to its the origination date. to relative obligations support financial in reduction Significant entityfrom a parent or other affiliate the at reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date. Significant deterioration liquidity/ in solvency of the obligor levels the at reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date. Other factors those other than above listed suggestthat the ability that of the obligor meet to contractual the at obligations reportingchanged has materially date from the origination date.

— — — — Stage 2 Financial risk managementFinancial continued Government policies little have or no negative impact on the viability or profitabilityof the obligor thereporting at which in a could result significantdate changethe in borrower’s ability meet to its the origination date. to relative obligations Nosignificant downturn the in obligor’s industry the reporting at to relative date or the notthe downturn origination is date expected significantly impact to the obligor’s ability meet to contractual the origination date. to relative obligations There the no in significant obligor’s drop is or profitabilityrevenue the reporting at which in acould result significantdate changethe in borrower’s ability meet to its the origination date. to relative obligations Little or reduction financial support in entityfrom a parent or other affiliate the at reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date. No significant deterioration liquidity/ in solvency of the obligor levels the at reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date. financial institutions,For no significant deterioration obligor’s in CAMELS (i.e. Capital, Asset Management Quality, Capability, Earnings, Liquidity, and Sensitivitythe reportingat risks) market to which in a could result significantdate changethe in borrower’s ability meet to its the origination date. to relative obligations No significant deterioration internal in the indicators ofprice at credit risk reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date. Other factors those other than above listed suggestthat the ability that of the obligor meet to contractual the at obligations reporting changed not has materially date from the origination date.

6. Stage 1 — — — — — — — — Withdrawal of from operating licence obligor. the Voluntary liquidation/insolvency of obligor. the If it becomes probable the that bankruptcyobligor enter may or other financial reorganisation. Disappearance ofactive an for market the financial instrument because of financial difficulties. The or origination purchase of a financial instrument a deep at reflects that discount the incurred credit losses. deemed are that of covenants Breach defaultas events. Other factors qualitative representing prudential default the in CBN’s as such guideline definition of default.

Financial instrumentsFinancial purchased are that or originated credit as impaired. Thefinancial instrument objective has evidence of the impairment reporting at evidenced as (but by to) date limited not the following: — — — — — — —

— — Stage 3 Significant downturn the in obligor’s industry the reporting at to relative date orthe the downturn origination is date expected significantly impactto the obligor’s ability meet to contractual the origination date. to relative obligations Government policies significanthave negative impact on the viability or profitability ofthe obligor the reportingat which in a could result significantdate change the in borrower’s ability meet to the origination to its relative obligations date. Litigationagainst the to obligor likely is impact a material orhave on revenue profit the reporting at which could date a significant change in the in result borrower’s ability meet to its obligations the origination date. to relative The borrower suffered has a regulatory its to size/ significant relation in fine is that profit the reporting at which could date significanta change in the in result borrower’s ability meet to its obligations the origination date. to relative Evidence that full repayment of interest full of repayment interest that Evidence ofand principal the realisation require will or other form of support.collateral Expectation of forbearance or Expectation forbearance of difficulties. financial to due restructuring An actual An or expected changethe in or macroeconomic, regulatory, technological of the environment borrower the reporting at a in results date significant change the in borrower’s ability meet theto to its relative obligations origination date. The financial instrument had has a since credit in risk significant increase not (but by evidenced as origination the following factors: to) limited

— — — — — — — — Stage 2 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

An actualAn or expected change the in or macroeconomic, regulatory, technologicalof the environment borrower the reporting at does date significanta change in in result not the borrower’s ability meet to its the origination to relative obligations date. No expectation of forbearance or financial to due restructuring difficulties. No full evidence of repayment that and principal the require will interest or other form of collateral realisation support.of Qualitative criteria

The financial instrument meetslow CBN free and gilt ‘risk i.e. criteria exception risk edged’. financial instrumentsAll will inception at bestage in if purchased or except 1 originated credit as impaired. The financial instrument had not a has since credit in risk significant increase not (but by evidenced as origination the following factors: to) limited — — — The borrower did suffer not a regulatory its to size/ significant relation in fine is that profit the reporting at which could date a significant change the in in result borrower’s ability meet to its obligations the origination date. to relative No against litigation the obligor is that impact a material have on profit to at likely the reporting a in result which could date significant change the in borrower’s ability meet theto to its relative obligations origination date.

94 Below is a table of the qualitative criteria used in allocating stages to the financial instruments of the Group: of the instruments financial the stages to allocating in used criteria qualitative of the a table is Below — — — — — The Authority shall override the stage allocation using quantitative assessment if the financial instrument meets the qualitative meets qualitative the instrument financial if the assessment quantitative using stage the allocation override The Authority shall below. stage detailed as impairment a different for criteria Stage 1 The Authority uses a wide range of qualitative criteria for staging purposes, leveraging on IFRS 9 recommendations and a range of a range and 9 recommendations on IFRS purposes, leveraging staging for criteria The of qualitative range a wide Authority uses factors.other 6.2.6.2

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 97 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Incorporating FLI into multi-year EAD and LGD estimation EAD LGD and multi-year into FLI Incorporating allowance ECL the affecting variable Macroeconomic 6.2.8.2  for estimates The LGD EAD case base and Authority the adjusts expected are be significantly to parameters these periods where based forward-looking on averages historical their from different information. macroeconomic 6.2.8.3 in rate growth domestic product (GDP) gross historical The real key the as identified were price oil crude and inflation Nigeria, Group. the of risk impacting credit the variables economic used were years ten last the for variables on these data Historical and optimistic (base, scenarios economic three the determine to anddownturn) their scenario weightings. Financial risk managementFinancial continued ECL the in incorporated Forward-looking information models multi- into forward-looking information Incorporating estimation PD year Rating outlook from external rating agencies for the obligor the for agencies outlook external rating from Rating or the related sovereign. The expected forecasts (e.g. impact of local macroeconomic rate, inflation rate, exchange rate, localgrowth GDP obligor. on the etc.) rate unemployment may that information specificOther qualitative obligor ratings. in change of future indication an provide 6. 6.2.8 forward-looking information. incorporates ECL of The calculation the identified and performed analysis has The Group historical expected and risk impactingcredit variables economic key portfolio. each for losses credit entity need an undertake an not that states 9 [B5.5.51] IFRS reasonable all consider but shall information for search exhaustive undue without available is that supportable and information of expected estimate the to or effortcost relevant is that and incorporate to required not entity is an addition, In losses. credit aof life entire the over conditions economic forecastsfuture of extrapolate entity to sufficesan it for Rather, instrument. financial available from future the far in are periods that for projections information. 6.2.8.1 different from originating instruments The financial Authority has be impracticable may it to such, as and world, of the regions the all for conditions economic on future information obtain FLI incorporated The therefore Authorityregions. has relevant a two-step approach: using estimation PD multi-year into Step 1: (PIT) PDs (TTC) Point-in-Time Through-the-Cycles to Convert PDs and rates default historical global with regression logistic using rate, growth GDP global (i.e. variables macroeconomic global based fact on the is This that price). oil and rate inflation global and industries across comparable are grades external rating jurisdictions. Step 2: by impact conditions the of local economic Incorporate financial of each rating the in of change likelihood the analysing analysis This specific based information. on obligor instrument the considering by every at be reporting conducted date will information: following i. ii.  iii. For unsecured products, LGDs are typically product at are set products, LGDs unsecured For achieved recoveries in differentiation limited the to due level by influenced are These borrowers. LGDs different across sales debt contracted including strategies, collection and price. For revolving products, the exposure at default is predicted is default at products, exposure the revolving For a ‘credit adding and balance drawn taking current by expected the for factor’ allows drawdown which conversion These of default. time the by limit remaining of the vary utilisation product by type limit assumptions current and data. default recent Group’s of the basedband, on analysis based on collateral primarily is products, secured this For to discounts historical values, type projected collateral and repossession to time sales, forced market/book to due values and recovery costs observed. For amortising products, this is based on the contractual based contractual on the is products,amortising this For or month a 12 over borrower the by owed repayments expected any for be adjusted also will This basis. lifetime overpayments made Early by a borrower. repayment/ the into incorporated also are assumptions refinance calculation.

— in included also is Forward-lookinginformation economic These LGD. EAD and PD, lifetime and 12-month the determining vary product ‘Forward-looking the by type. to assumptions Refer an for subhead models’ ECL the in incorporated information in its and inclusion of forward-lookingexplanation information ECL calculations. how as – such calculation ECL the underlying The assumptions change values collateral how and PDs of the maturitythe profile on a team Finance the by reviewed and monitored – are etc. periodic basis. techniques estimation in changes been no significant have There between made model the waswhen assumptions significant or reporting period. the and adopted — based on the determined are LGDs lifetime and The 12-month post made These default. factors impact recoveries the which vary product by type. — The 12-month and lifetime EADs are determined basedtheon determined EADs are lifetime and The12-month product by type. varies which expected profile, payment — NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Measuring ECL – Explanation of inputs, assumptions and – Explanation of inputs, assumptions ECL Measuring techniques estimation

Loss Given Default (LGD) represents the Group’s expectation Group’s the represents (LGD) Default Given Loss by varies LGD exposure. on a defaulted of loss extent of the typetype and seniority and of counterparty, of claim is support. credit LGD or other of collateral availability the at of exposure per unit loss a percentage as expressed or on a 12-month calculated is LGD (EAD). of default time of loss percentage the is LGD 12-month where basis, lifetime next the in expected occurs be 12 default if the made to expected loss of percentage the is LGD Lifetime and months expected remaining the over occurs be default if the made to asset. financial of the lifetime EAD is based on the amounts the Group expects Group the based amounts be on the EAD is owed to or EAD) (12M months next the over of default, 12 time the at a for example, For EAD). (Lifetime lifetime remaining the over current the includes Group the commitment, revolving expected is further that to any amount plus balance drawn of time the by limit contractual current the to up be drawn occur. it should default, The PD represents the likelihood of a borrower defaulting on defaulting borrower a of likelihood the represents ThePD and of default per ‘Definition (as obligation its financial (12M months next the over 12 either above), credit-impaired’ of the PD) (Lifetime lifetime remaining the or over PD), obligation.

96 The Lifetime PD is developed by applying a maturity profile to to a maturity profile applying developed by is PD The Lifetime The looks maturity profile defaults how at PD. 12M current the recognition on a portfoliodevelop of initial point the from amortised The asset cost. financial of the lifetime the throughout observed is and data based on historical is maturity profile a portfolio within assets all and be same the across to assumed analysis. supported historical by is This grade band. credit The ECL is determined by projecting the PD, LGD and EAD for and LGD PD, the projecting by determined is The ECL or collective exposure individual each for and month future each This together. multiplied are components Thesesegment. three is which month, future each for ECL an effectively calculates The summed. and reporting the date to back discounted then effective original the is calculation ECL the in used rate discount thereof. approximation or an rate interest — — — The Expected Credit Loss (ECL) is measured on either a 12-month a 12-month on either measured is The Expected (ECL) Loss Credit significant a on whether depending basis or Lifetime (12M) or recognition initial since occurred has risk credit in increase Expected be credit-impaired. to considered is asset an whether of product Probability of the discounted the are losses credit Default Given Loss and (EAD), Default at Exposure (PD), Default follows: defined as (LGD), 6.2.7

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

99 – ’000 Total Group ₦ 3,984,976 1,641,036 2,955,668 2,955,668 (2,955,668) 10,260,970 93,069,036 35,581,170 178,487,028 323,024,216 320,068,548

– – – – – – – – – – – ’000 Group ₦ Stage 3 Lifetime exposure

– – – – – – – – – – – ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦ Stage 2 Lifetime exposure

– – – – – – ’000 Group ₦

– ’000 Group ₦ Stage 1 exposure 12 months’ 3,984,976 1,641,036 2,955,668 2,955,668 (2,955,668) 10,260,970 93,069,036 35,581,170 178,487,028 323,024,216 320,068,548 Financial risk managementFinancial continued allowance Loss Write-off policy transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases (or decreases) of decreases) (or increases significant experiencing instruments financial to 2 or 3 due between Stages 1 and transfers Stage and down’) between12-month ‘step (or up’ ‘step consequent period, the the and in credit-impaired or becoming risk credit Lifetime ECL; instruments financial for releases as well period, the as during recognised instruments financial new for allowances additional period; the in derecognised inputsof refreshing regular from period, the arising in LGDs EADs and PDs, in changes to due ECL of impactmeasurement the on to models; assumptions; and models to made changes to due of ECL impacts measurement on the basis; value on a present measured is ECL as of time, passage the to due ECL within unwind discount and movements; other and currencies foreign in denominated assets for retranslations exchange foreign written off. are that assets to write-offs and related derecognised assets of allowances financial

Financial assets measured at amortised at assets measured cost Financial Eurobonds 6. 6.2.10 a variety impacted period the by in is of factors, described below: as recognised The allowance loss — — — — — — — written off no assets period. the were There during of theend between the and assets beginning the financial of allowance loss the in changes the of explanation an for 14.1 See Note annual period. 6.2.11 practical efforts all part, recovery whole or in in exhausted there off assets, has it when writes The concluded has Group financial and enforcement ceasing (i) expectation include of recovery no reasonable is there that Indicators expectation of recovery. no reasonable is no is there that such is collateral the of value the and collateral on foreclosing method is recovery Group’s activity the where (ii) and full. in expectation of recovering reasonable no outstanding contractual were there activity.Currently, enforcement subjectto still write-off are may that Theassets Group financial 2018. December ended 31 year the during assets financial on such amounts taken are allowances the amortised based on stage at which cost in measured assets financial Group’s the The analyses below table equity are instruments. income comprehensive other through valued fair assets financial All on them. Nigerian treasury bills Open Market bills) Operations bills (OMO Fixed deposits Fixed Loans and receivables and receivables Loans Other assets Loss allowance (investment securities and other assets) (investment allowance Loss Carrying amount Individually impaired Collectively impaired impaired Collectively

– – – 2% 3% 3% ’000 2023 40% 40% 30% ₦ 2,378 70.00 73.50 56.50 (1,448) Authority 25,781 61,065 Net effect Net (23,807) (54,473)

2% 3% 3% ’000 2022 40% 40% 30% ₦ 70.00 71.30 55.00 Authority 596,636 570,855 569,407 547,048 570,855 631,920 573,233 570,855 516,382 ECL AllowanceECL

– – – 2% 3% 3% ’000 2021 40% 40% 30% Group ₦ 2,591 70.00 69.71 53.50 (1,659) 28,594 67,798 Net effect Net (26,501) (60,571)

3% 3% 3% ’000 2020 40% 40% 30% Group ₦ 70.00 65.00 51.90 662,669 634,075 632,416 607,574 634,075 701,873 636,666 634,075 573,504 ECL allowanceECL 3% 4% 4% 2019 40% 40% 30% 69.40 60.00 50.10 Best Optimistic Downturn Best Optimistic Downturn Best Optimistic Downturn NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Economic variable assumptions variable Economic

Oil prices Inflation rate Growth rate

98 The table below demonstrates the sensitivity of the ECL allowance to movements in the significant forward-looking indicators for forward-looking indicators significant the in movements to allowance ECL sensitivity of the the The demonstrates below table constant: held variables other all with assets, financial — — — Sensitivity analysis on ECL modelSensitivity on ECL analysis includes: Group of the allowance impact with forward-looking ECL on the The information most significant The most significant period-end assumptions used for the ECL estimate as at 31 December 2018 are set out below. The scenarios out below. set are 2018 December 31 at as estimate ECL the for used period-endThe most assumptions significant portfolios. all for used were ‘downturn’ and ‘optimistic’ ‘best’, (%) rate a GDP growth 6.2.9

Notes to theConsolidated andSeparate Statements Financial (continued) 10% decrease No change 10% decrease Oil prices 10% increase No change 10% decrease rate Inflation 10% increase No change Growth rate Growth 10% increase b Inflation (%) rate c Oil price (USD) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

101 ’000 ’000 ’000 Total Total Total Group ₦ ₦ ₦ Authority Authority 1,698,057 1,520,494 1,911,529 4,152,936 1,591,131 6,676,418 1,908,441 5,906,505 5,906,505 7,759,434 15,456,623 18,331,582 36,481,719 12,902,016 14,002,831 16,961,833 18,568,248 32,826,034 18,808,521 50,484,550 16,961,833

– – – – – – – – – – – – – – – ’000 ’000 ’000 Group ₦ ₦ ₦ 2 years 2 years 2 years Authority Authority Greater than Greater Greater than Greater Greater than Greater 5,035,582 5,035,582 5,035,582 5,035,582 21,449,259 21,449,259

– – – – – – – – – – – – – – ’000 ’000 ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦ ₦ ₦ 2 years 2 years 2 years Authority Authority 228,332 725,719 725,719 954,051 725,719 7,872,118 7,872,118 Between 1 and Between 1 and Between 1 and

– – – – – – – – – – – – – – – ’000 ’000 ’000 Group ₦ ₦ ₦ Authority Authority and 1 year and 1 year and 1 year 124,657 124,657 124,657 124,657 4,034,513 4,034,513 Between 6 months Between 6 months Between 6 months

’000 ’000 ’000 Group ₦ ₦ ₦ Authority Authority 20,547 20,547 1,698,057 1,520,494 1,911,529 4,152,936 1,591,131 6,448,086 1,908,441 3,125,829 7,759,434 15,456,623 18,331,582 12,902,016 14,002,831 16,961,833 Up to 6 months Up to 6 months Up to 6 months 18,568,248 26,711,744 12,922,563 17,128,660 16,961,833 Market risk Financial risk managementFinancial continued 6.4 market in moves adverse by caused instruments of financial values fair the in changes unfavourable from of loss risk the is risk Market of the volatilities implied and spreads credit equity commodity prices, prices, rates, interest rates, exchange foreign as such variables, risk exposed market is The to Group Group. the to capital and/or of earnings a loss in result could losses risk Market rates. market market. the in its direct from own investments erosion capital experience can and its proprietary investments through traditional two: namely, into be can categorised exposure potential Group’s the classes, asset certain in investments to With regards Alternative equity instruments. fixed listed income and cash, include investments Traditional investments. alternative and investments less generally are and hospitality, equities, and securities hedge unquoted funds, equity, private assets, estate real are investments assets, estate real are investments alternative as to referred being classes asset the Currently, investments. traditional than liquid infrastructure hospitality and projects. equity, private Trade payables Trade Trade payables Trade 31 December 2017 Trade payables Trade 31 December 2018 6. 31 December 2017 Intercompany payables Intercompany Intercompany payables Intercompany Other payables Other payables Other payables Payables to related parties related to Payables Total liabilities Total Total liabilities Total Borrowings NAIC NPK loan guaranteed by NSIA by NAIC NPK loan guaranteed NAIC NPK loan guaranteed by NSIA by NAIC NPK loan guaranteed Total liabilities Total Unfunded commitments with private equity fund managers Unfunded commitments with private equity fund managers Unfunded commitments with privateUnfunded commitments equity fund managers Total commitments Total Total commitments Total Total commitments Total

– – ’000 ’000 ’000 2017 Total Total 249 Group ₦ ₦ ₦ Authority Authority 570,855 570,855 (570,855) 8,545,048 1,733,962 3,984,976 31 December 31 8,545,297 10,260,970 18,756,444 36,481,719 93,069,036 19,069,581 178,487,028 285,802,010 285,231,155 56,972,125 19,069,581

– – – – – – – – – – – – – – ’000 ’000 ’000 2018 133 Group ₦ ₦ ₦ 2 years Stage 3 Lifetime Authority Authority exposure Greater than Greater 31 December 31 29,531,728 32,245,474 21,449,259 61,777,335 21,449,259

– – – – – – – – – – – – – – ’000 ’000 ’000 2017 473 Group Group ₦ ₦ ₦ 2 years Stage 2 Lifetime Authority exposure 316,208 7,872,118 31 December December 31 7,872,118 22,020,278 Between 1 and 22,336,959

– – – – – – – – – ’000 ’000 ’000 2018 133 Group Group ₦ ₦ ₦ Authority and 1 year 4,034,513 31 December December 31 4,034,513 43,908,683 32,245,474 76,154,290 Between 6 months

– ’000 ’000 Group ₦ ₦ Stage 1 Authority exposure 570,855 570,855 12 months’ (570,855) 1,733,962 3,984,976 3,125,829 10,260,970 18,756,444 93,069,036 19,069,581 Up to 6 months 178,487,028 285,802,010 285,231,155 23,616,235 19,069,581

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Management of liquidityManagement risk Liquidity risk Exposure to liquidity to risk Exposure

100 The table below shows the Group's current cash levels: cash current Group's the The shows below table The Group’s approach to managing liquidity is to have sufficient funds to meet its liabilities, as and when due, without incurring incurring without due, when and as meet its liabilities, to sufficient funds have to is liquidity managing to approach The Group’s fund to levels cash maintaining by its risk liquidity manages The Group reputation. Group’s the to damage or risking losses undue expenses. operating short-term 6.3.1 Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations arising from its financial liabilities that are are that liabilities its from financial arising difficulty obligations meeting in encounter will Group the that risk the is Liquidity risk to be settled disadvantageous to a manner in have will obligations such or that asset, financial or another cash settled delivering by Group. the 6.3

Notes to theConsolidated andSeparate Statements Financial (continued) Total cash and cash equivalents Total Bank balances with financial institutions Placements 31 December 2018 The table below analyses the Group’s non-derivative financial liabilities and unfunded commitments with private equity private fund with commitments unfunded and liabilities non-derivative financial Group’s the The analyses below table maturity contractual the to date sheet balance the period at based remaining on the maturity groupings relevant into managers flows. cash undiscounted contractual the are table the in disclosed The amounts date. 6.3.2 Cash in hand Cash Financial assets measured at amortised at assets measured cost Financial Eurobonds Trade payables Trade Nigerian treasury bills Other payables Open Market bills) Operations bills (OMO Borrowings Fixed deposits Fixed Total liabilities Total private equity fund managers Unfunded commitments with Total commitments Total Loss allowance (investment securities and other assets) (investment allowance Loss Individually impaired Carrying amount Collectively impaired impaired Collectively Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

103 000 000 Total Total Group ₦’ ₦’ Authority 1,465,369 3,534,631 1,911,529 6,676,418 1,591,131 1,520,494 17,218,015 18,825,895 18,331,582 22,336,959 17,517,216 37,623,421 46,219,145 15,456,623 49,804,646 32,517,508 (17,218,015) (18,825,895) 262,692,958 285,232,084 31,919,529 18,568,248 61,777,335 344,360,304 376,517,901 386,389,699 429,331,573

– – – – – – – – – – – – – – – – – – – – 000 000 Euro Euro Group ₦’ ₦’ 9,418 (9,418) Authority 188,357 188,357 188,357

– – – – – – – – 000 000 USD USD ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦’ ₦’ Authority 1,865,350 7,463,900 1,865,350 17,218,015 18,816,477 17,341,779 24,805,655 35,254,036 15,086,631 49,804,646 (17,218,015) (18,816,477) 253,737,553 285,232,084 33,828,914 344,360,304 376,329,544 346,225,654 376,329,544 – – – – – – – – 000 000 Naira Naira Group ₦’ ₦’

Authority 46,179 175,437 3,534,631 6,676,418 1,465,369 8,955,405 7,250,328 1,591,131 1,520,494 18,331,582 12,817,766 10,965,109 15,456,623 25,053,608 30,054,179 40,164,045 18,568,248 27,760,064 52,813,672 Financial risk managementFinancial continued 6. foreign of currency exposure Concentration foreign of currency exposure Concentration Sensitivity at 5% depreciation Sensitivity at 5% appreciation Net financial asset FCY exposure exposure Net financial asset FCY Sensitivity at 5% depreciation Payable to Federal Government of Nigeria Government Federal to Payable monetary financial liabilities Total Borrowings Sensitivity at 5% appreciation Other payables grant government to income relating Deferred Other payables exposure Net financial asset FCY Investment securitiesInvestment (held-to-maturity) securitiesInvestment (loans and receivables) securitiesInvestment (available-for-sale) Other assets monetary financial assets Total payables Trade monetary financial liabilities Total 31 December 2017 and cash equivalents Cash 31 December 2018 and cash equivalents Cash payables Intercompany Other assets monetary financial assets Total payables Trade Investment securitiesInvestment (at amortised cost) Investment securitiesInvestment (at FVTPL) 000 Total Group ₦’ 1,733,962 8,951,162 76,154,290 49,804,646 35,581,170 18,756,444 18,294,839 26,052,673 20,212,926 (20,212,926) 287,443,046 73,789,080 448,983,152 404,258,511 – – – – – – – – – 000 Euro Group ₦’ 9,418 (9,418) 188,357 188,357 188,357 – – – 000 USD Group ₦’ 1,460,574 49,804,646 48,205,869 35,124,807 15,047,640 20,203,508 (20,203,508) 287,443,046 16,508,214 420,578,368 404,070,154 – – – – – 000 Naira Group ₦’

456,363 273,388 3,708,804 8,951,162 27,760,064 18,294,839 26,052,673 28,216,427 57,280,866 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Foreign exchange risk risk exchange Foreign Non-trading assets/Non-financial assets assets assets/Non-financial Non-trading Trading assets/Financial assets assets/Financial Trading

valuation risk – which derives from the valuation methodology chosen for unlisted assets. A critical associated risk is that which which that is risk associated critical A assets. unlisted methodology for chosen valuation the from derives which – risk valuation private assets, estate real in its investments through risk valuation to exposure has model. The Group valuation the to relates project and development. instruments alternative other as well as equity investments market risk – comprising equity, interest rate, interest basis and currency risks; and basis interest rate, interest equity, – comprising risk market

102 Concentration of foreign of currencyexposure Concentration The tables below show the sensitivity of the Group’s total comprehensive income to appreciation or depreciation of the Naira in Naira of the or depreciation appreciation to income comprehensive total Group’s sensitivity of the the The show below tables other currencies. to relation 31 December 2018 The Group has an investment in a foreign operation, whose net assets are exposed to foreign currency translation risk as a result of a result as risk currency translation exposed foreign are to assets net whose operation, a foreign in investment an has The Group Non- currency. presentation Group’s the functional currency to operation’s the from statements of its financial translation the from arising exposure Currency standards. the with accordance in risk exchange exposed foreign not to are assets monetaryfinancial relevant the in denominated equivalents cash and cash through primarily managed is subsidiary foreign Group’s of the assets net the currencies.foreign Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency in denominated are or liabilities assets or recognised transactions commercial future when arises risk exchange Foreign functional currency. Group’s the not is that 6.4.3 Key performance measures are set and a robust monitoring and reporting framework is put in place to monitor performance of the monitor to place put in reporting and is framework monitoring a robust and set are performance measures Key securities. unlisted and alternative in investment Authority’s 6.4.2 Trading assets are carried at fair value using publicly available market rates for traded securities. Positions are monitored regularly and regularly monitored are traded for Positions securities. rates market available publicly using value fair carried at are assets Trading performance relevant benchmarks. measured to 6.4.1 The identification, measurement and management of market risk is categorised as follows: follows: as categorised is risk of market management and measurement The identification, The Group manages market risk by actively controlling positions taken by investment managers in accordance with the investment investment the with accordance in managers investment by taken positions actively controlling by risk market manages The Group limits position other and limits allocation asset classes, asset permissible outlines strategy fund. The investment each for strategy expected are provide managers to investment and escalated are Exceptions profile. portfolio risk the and to appetite risk according portfolios bring would limits. of actiona plan that within — The Group’s Market Risk Framework includes: includes: Framework Risk Market The Group’s —

Notes to theConsolidated andSeparate Statements Financial (continued) Investment securitiesInvestment (at FVTPL) – Monetary Cash and cash equivalents Cash Investment securitiesInvestment (at amortised cost) Other assets monetary financial assets Total payables Trade Other payables Deferred income relating to government grant government to income relating Deferred Payable to Federal Government of Nigeria Government Federal to Payable Borrowings monetary financial liabilities Total Sensitivity at 5% appreciation Net financial asset FCY exposure exposure Net financial asset FCY Sensitivity at 5% depreciation Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – 105 ’000 2017 ₦ Authority (1,850,718) (1,881,171) 31 December 31 12,208,697 24,805,655 37,014,352 Sensitivity 5% to weakening Impact of 5% weakening Sensitivity 5% to weakening Sensitivity 5% to weakening

– – – – – – ’000 2018 ₦ Authority 1,850,718 1,881,171 31 December 31 Sensitivity 5% to strengthening Impact of 5% strengthening Sensitivity 5% to strengthening Sensitivity 5% to strengthening

’000 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group ₦ 609,069 31 December 31 12,208,697 24,805,655 37,623,421

– – – – ’000 2018 Group ₦ 31 December 31 Impact on Impact on Impact on Impact on Other income comprehensive Other income comprehensive Other income comprehensive Other income comprehensive Financial risk managementFinancial continued Available-for-sale – Treasury bills Treasury – Available-for-sale Available-for-sale – Fixed income products income – Fixed Available-for-sale In thousands of Nigerian Naira Available-for-sale – US treasuryAvailable-for-sale notes In thousands of Nigerian Naira In thousands of Nigerian Naira Authority 31 December 2017 In thousands of Nigerian Naira Group 31 December 2018 Group 31 December 2017 Authority 31 December 2018 6. carried assets financial fixed interest Group’s on the (increase/decrease) changes rate impact the The of interest shows below table income. effect the and value fair at comprehensive on other

000 Total ₦’ Authority 1,698,057 4,152,936 1,908,441 8,545,297 7,759,434 17,341,779 37,014,352 72,280,954 17,734,981 (17,734,981) 254,513,055 389,695,437 354,699,628

– – – – – – – – – – 000 Euro ₦’ Authority

– 000 USD ₦’ Authority 302,826 1,402,976 5,799,016 1,705,802 24,805,655 17,341,779 53,945,925 17,734,981 (17,734,981) 254,513,055 356,405,430 354,699,628

– – – – – 000 Naira ₦’

Authority 295,081 3,850,110 1,908,441 2,746,281 6,053,632 12,208,697 18,335,029 33,290,007 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA Interest rate risk 104 Investment securitiesInvestment (available-for-sale) Net interest income sensitivity income Net interest instruments rate variable holds Group the where risk. These are rate interest to rise give two types are that There of scenarios at measured instruments debt holds Group or the rates interest market in a change to due risk rate flow cash interest to susceptible risk. rate be interest exposed value fair will to which value fair Interest rate risk is the risk of loss to net interest income (NII) arising from changes in market interest rates on rate sensitive assets and assets sensitive on rate rates interest market in changes from arising (NII) income interest net to of loss risk the is risk rate Interest liabilities. 6.4.4 Investment securitiesInvestment (held-to-maturity) securitiesInvestment (loans and receivables) Other assets monetary financial assets Total payables Trade Cash and cash equivalents Cash Concentration of foreign of currency exposure Concentration 31 December 2017 (continued) Notes to theConsolidated andSeparate Statements Financial payables Intercompany Other payables Total monetary financial liabilities Total Sensitivity at 5% appreciation Sensitivity at 5% depreciation Net financial asset FCY exposure exposure Net financial asset FCY Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

107 ’000 ’000 ’000 ’000 ’000 ’000 Total Total Total Total Total Total Group Group Group ₦ ₦ ₦ ₦ ₦ ₦ Authority Authority Authority 869,908 762,044 523,000 609,069 523,000 869,908 1,528,500 7,411,647 1,528,500 8,951,482 7,934,647 9,474,482 22,963,236 26,841,410 43,559,000 69,343,323 12,208,697 69,220,300 24,805,655 23,825,778 12,208,697 24,805,655 40,400,222 69,220,300 163,469,013 131,588,930 148,772,443

– – – – – – – – – – – – – ’000 ’000 ’000 ’000 ’000 ’000 Group Group Group ₦ ₦ ₦ ₦ ₦ ₦ Level 3 Level 3 Level 3 Level 3 Level 3 Level 3 Authority Authority Authority 523,000 523,000 523,000 1,539,835 2,062,835 43,559,000 69,343,323 64,770,690 23,825,778 40,400,222 64,770,690 88,596,468 112,902,323 105,170,912

– – – – – – – – ’000 ’000 ’000 ’000 ’000 ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group Group ₦ ₦ ₦ ₦ ₦ ₦ Level 2 Level 2 Level 2 Level 2 Level 2 Level 2 Authority Authority Authority 869,908 762,044 609,069 869,908 1,528,500 2,736,060 1,528,500 2,736,060 2,736,060 2,736,060 22,963,236 26,841,410 12,208,697 24,805,655 12,208,697 24,805,655 50,566,690 38,542,852 39,151,921

– – – – – – – – – – – – – – – – – – – ’000 ’000 ’000 ’000 ’000 ’000 Group Group Group ₦ ₦ ₦ ₦ ₦ ₦ Level 1 Level 1 Level 1 Level 1 Level 1 Level 1 Authority Authority Authority 4,449,610 4,675,587 4,449,610 4,675,587 4,449,610 4,675,587 4,449,610 4,675,587 Fair value hierarchy continued value hierarchy Fair Currency 21.6.1) swap (Note Currency 21.6.1) swap (Note income products Fixed 31 December 2017 Private equity investments equity investments Private Hedge funds and long only equity investments Hedge funds and long only equity investments US treasury notes Fixed income products Fixed Hedge fund managers Private equity investments Private Nigeria debt fund infrastructure assetsFinancial fair at value through profit or loss 31 December 2018 US treasury notes MTN securities, Bridge Academies Limited and ChieftainLimited Investments Bridge securities, Academies MTN NG Clearing Ltd NG Clearing Ltd securitiesInvestment available-for-sale 31 December 2017 Private equity investments Private Nigeria treasury bills income products Fixed Nigeria debt fund infrastructure Hedge fund managers US treasury notes securitiesInvestment FVOCI at 31 December 2018 NG Clearing Ltd NG Clearing Ltd and Chieftain Limited Investments Bridge securities, Academies MTN securities Investment available-for-sale 31 December 2017 7. 7. securities Investment FVOCI at 31 December 2018

’000 ’000 2017 2017 ₦ ₦ Authority Authority 222,481 (222,481) 4,429,823 31 December 31 31 December 31 (4,429,823)

’000 ’000 2018 2018 ₦ ₦ Authority Authority 233,779 (233,779) 7,934,647 31 December 31 31 December 31 (7,934,647)

’000 ’000 2017 2017 Group Group ₦ ₦ 222,481 (222,481) 5,258,546 31 December 31 31 December 31 (5,258,546)

’000 ’000 2018 2018 Group Group ₦ ₦ 233,779 (233,779) 9,474,482 31 December 31 31 December 31 (9,474,482) Financial instruments Financial instruments. Quoted markets. Equity in over-the-counter instruments quoted (OTC) equityUnquoted instruments and debt instruments.

Fair value input description Fair Quoted prices (unadjusted) from active markets. prices from Quoted (unadjusted) 1 Inputs prices other than quoted included in Level observablethat are as prices) or indirectly (i.e. either directly prices). derived from (i.e. Inputs not based on observable that are market data unobservable(that is, inputs). NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Equity securities price risk Fair value hierarchy Fair

106 The table below summarises the impact of increases/decreases on the Group’s other comprehensive income and equity. The analysis The analysis equity. and income comprehensive other Group’s on the impact the of increases/decreases The summarises below table constant: held variables other all with 5% by increased/decreased equity had the that prices based assumption the on is The Group is exposed to equity securities price risk because of investments held by the Group and recognised on the consolidated consolidated the on recognised and Group the by held because of investments risk exposed equity is price The to securities Group from arising risk its price manage risk. To exposedcommodity not price to is FVOCI. The at Group position of financial statement the with its portfolio.portfolio of the diversifies equity in accordance Group the done Diversification in securities, is investments Group. the by set limits 6.4.5

Notes to theConsolidated andSeparate Statements Financial (continued) The following tables analyse within the fair value hierarchy the Authority's financial assets (by class) measured at fair value at at value fair at measured class) (by assets financial Authority's the hierarchy value fair the within analyse tables The following All fair value measurements disclosed recurring are fair value 2018. measurements.31 December Unquoted equity instruments and debt instruments are measured in accordance with the International Private Equity and Venture Venture Equity and Private International the with accordance in measured are instruments debt equity and instruments Unquoted of measurement. time the at available information most the appropriate to reference with guidelines valuation Capital Level Fair value hierarchy Fair hierarchy: following the to portfolio investment the according in value fair at measured instruments financial classifies The Group 1 Level 2 Level 3 Level 7. 7. Other comprehensive income would increase/(decrease) as a result of gains/(losses) on equity securities measured at FVOCI by the FVOCI by at on equity measured securities of gains/(losses) a result as increase/(decrease) would income Other comprehensive above. shown amounts The table below shows the effect in other comprehensive income and equity of changes in available quoted securities (quoted on (quoted securities quoted available equity in and of changes income effect the The shows below table comprehensive other in the in decrease and increase A 5% The above. table the from impact excluded Group. was the in (LSE)) Exchange Stock London the below: been sensitivity analysis the equity in used has price Equity instruments measured at FVOCI (2017: Available-for-sale) at FVOCIEquity (2017: Available-for-sale) instruments measured LSE – Chieftain Inc. Hanesbrands Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – 109 ’000 ’000 ’000 2017 2017 2017 ₦ ₦ ₦ Authority Authority Authority 33,809 205,618 (402,353) 2,379,983 3,547,827 1,995,276 31 December 31 31 December 31 31 December 31 (3,165,947) 59,039,615 12,630,092 12,332,548 64,770,690 23,825,778

– – – – – – – – – – – – ’000 ’000 ’000 2018 2018 2018 ₦ ₦ ₦ Authority Authority Authority 523,000 523,000 31 December 31 31 December 31 31 December 31 64,770,690 23,825,778 (64,770,690) (23,825,778)

– – – – – ’000 ’000 ’000 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group Group ₦ ₦ ₦ 205,618 147,259 (402,353) 1,143,600 2,379,983 3,547,827 2,655,815 31 December 31 31 December 31 31 December 31 (5,920,717) 1,143,600 59,039,615 28,399,511 15,118,354 64,770,690 40,400,222

– – – – – – – – ’000 ’000 ’000 2018 2018 2018 Group Group Group ₦ ₦ ₦ 78,400 (299,000) 1,143,600 1,139,835 31 December 31 31 December 31 31 December 31 2,062,835 64,770,690 40,400,222 (64,770,690) (40,400,222) Fair value hierarchy continued value hierarchy Fair Closing balance Closing Exchange gain Exchange Financial assets measured at FVOCI/Available-for-sale FVOCI/Available-for-sale at assets measured Financial and NG Clearing Limited – Bridge Academies Opening balance Additions value movement Fair Available-for-sale – Hedge funds Available-for-sale Opening balance Additions Disposals, repayments and distributions received and distributions received repayments Disposals, Fair value movement Fair IFRS 9 reclassification gain Exchange Closing balance Closing Available-for-sale – Private equity – Private Available-for-sale Opening balance value movement Fair IFRS 9 reclassification gain Exchange Additions and distributions received repayments Disposals, Closing balance Closing 7. 7. in hedgeInvestments funds and private equity funds measured FVOCI at financial available reported latest as the in valuation on the Authority the relies investments, of these value fair the determining In that of reasons aware Authority the is unless manager, investment the by provided statements account capital and/or statements value a fair assign to Authority the right reserves cases, the such In value. of fair be best the not approximation may a valuation such manager. differs one which the reported from investment the by investments such to measured assets financial for 2018 December ended 31 year the for 3 instruments Level in changes the presents table The following at FVOCI.

’000 ’000 Total Total ₦ ₦ Authority 762,044 869,908 869,908 1,626,000 26,933,165 69,343,323 26,841,410 22,963,236 148,469,178

– – – – – – ’000 ’000 ₦ ₦ Level 3 Level 3 Authority 26,933,165 69,343,323 96,276,488

– – ’000 ’000 ₦ ₦ Level 2 Level 2 Authority 762,044 869,908 869,908 1,626,000 26,841,410 22,963,236 52,192,690

– – – – – – – – – ’000 ’000 ₦ ₦ Level 1 Level 1 Authority NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

108 These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity little possible as as rely and available is it where of observable data use the market maximise techniques These valuation 2. Level in included is observable, instrument the are instrument an value fair to required inputs significant all If specific estimates. (b) Financial instruments in Level 2 Level in instruments Financial (b) directly either or liability, observable asset the are for 1 that Level within included prices quoted than other inputs are 2 inputs Level platform a trading which but for active traded an market not in are equity in that securities investments They include or indirectly. reporting the at as asset the purchase to order in pay participants would market which for be can determined price a exists on which markets. alternative Over-the-Counter the at i.e. date 3 Level in instruments Financial (c) of what The determination or liability. respective the asset been valuing in applied have unobservable that are 3 inputs inputs Level data be observable market to The data Authority considers Authority. the by judgement significant requires ‘observable’ constitutes sources independent by proprietary provided not and verifiable, and reliable or updated, distributed regularly available, readily is that year. the during between no transfers levels were There market. relevant the in actively involved are that (a) Financial instruments in Level 1 Level in instruments Financial (a) A 2018. December 31 at as prices market based on quoted traded is active in markets instruments The of financial value fair industry group, broker, dealer, exchange, an from available regularly and readily are prices active as if quoted regarded is market arm’s an on transactions market occurring regularly actual and represent prices those and agency, regulatory or service, pricing are These instruments price. bid current the is Group the by held assets financial for used price market The quoted basis. length included in Level 1. Specific 3. Level in included is instrument the based on observable data, not is inputs market significant of the one or more If instruments. similar for quotes or dealer prices market quoted include instruments financial value to used techniques valuation 31 December 2017

Financial assetsFinancial fair at value through profit or loss 31 December 2018

Notes to theConsolidated andSeparate Statements Financial (continued) Currency 21.6.1) swap (Note Currency 21.6.1) swap (Note equity investments Private only equityHedge funds and long investments Nigeria debt fund infrastructure US treasury notes income products Fixed Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– 111 ’000 ’000 Group Group ₦ ₦ Fair value Fair Fair value Fair 8,333,282 1,911,529 6,676,418 1,733,962 46,219,145 11,134,143 17,843,278 16,113,745 18,331,582 26,052,673 18,756,444 18,294,839 262,692,958 286,829,901 26,919,529 64,837,918 326,755,381 322,411,071 – – ’000 ’000 Group Group ₦ ₦ Level 3 Level 3 8,333,282 1,911,529 6,676,418 1,733,962 46,219,145 11,134,143 16,113,745 18,331,582 26,052,673 18,756,444 18,294,839 262,692,958 268,251,836 26,919,529 64,837,918 308,912,103 303,833,006 – – – – – – – – – – – – – – – ’000 ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group ₦ ₦ Level 2 Level 2 17,517,216 18,578,065 17,517,216 18,578,065 – – – – – – – – – – – – – – – – – – – ’000 ’000 Group Group ₦ ₦ Level 1 Level 1

– ’000 ’000 Group Group ₦ ₦ 8,333,282 1,911,529 6,676,418 1,733,962 46,219,145 11,134,143 17,517,216 16,113,745 18,331,582 26,052,673 18,756,444 18,294,839 Carrying value Carrying value 262,692,958 286,822,091 26,919,529 64,837,918 326,429,319 322,403,261 Fair value hierarchy continued value hierarchy Fair value fair at not measured liabilities financial and assets of financial hierarchy value Fair Financial assets Financial Other receivables Financial assets Financial Other receivables 31 December 2017 7. 7. 7.1.1 31 December 2018 Held-to-maturity Trade receivables Trade Loans and receivables Loans Cost incurred on behalf of related party on behalf of related incurred Cost of in respect 2nd Niger Bridge Advances to staff to Advances Financial liabilities Financial payables Trade Financial assets measured at amortisedmeasured assets cost Financial Other payables of in respect Government Federal to Payables the 2nd Niger Bridge Financial liabilities Financial Borrowings Trade payables Trade Other payables Payables to Federal Government in respect of in respect Government Federal to Payables the 2nd Niger Bridge

– – – – – – – – – – – – – – ’000 ’000 ’000 ’000 ’000 2017 2017 2017 2017 2018 ₦ ₦ ₦ ₦ ₦ Authority Authority Authority Authority Authority 541,095 277,155 546,976 (541,095) (277,155) (546,976) 31 December 31 31 December 31 31 December 31 31 December 31 December 31 Difference Difference Difference

– – ’000 ’000 ’000 ’000 ’000 2017 2017 2018 2018 2018 Group Group Group ₦ ₦ ₦ ₦ ₦ Authority Authority 690,135 310,182 554,476 (690,135) (310,182) (554,476) 6,068,415 1,635,462 4,433,012 31 December 31 31 December 31 31 December 31 31 December 31 December 31 (2,995,848) (1,600,642) (9,221,262) 23,825,778 25,953,500 64,770,690 (16,592,617) 26,933,165 69,343,323 Difference Difference Difference

– – – – – – – – – – – – – – ’000 ’000 2017 2017 Group Group ₦ ₦ 31 December 31 31 December 31 Inputs value NAV/Fair value NAV/Fair Inputs value NAV/Fair value NAV/Fair Inputs value NAV/Fair value NAV/Fair

– – ’000 ’000 2018 2018 Group Group ₦ ₦ 9,003,662 1,942,102 4,433,012 31 December 31 31 December 31 (3,504,546) (4,282,440) (9,221,262) 40,400,222 25,953,500 64,770,690 (16,592,617) 43,559,000 69,343,323 Increase Decrease Increase Increase Decrease 5% changes in fair value movement 5% changes in fair value movement 5% changes in fair value movement Decrease

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

110

Notes to theConsolidated andSeparate Statements Financial (continued) Additions and distributions received repayments Disposals, value movement Fair IFRS 9 reclassification gain Exchange balance Closing Financial assets at fair value through profit or loss profit through fair value assets at Financial equity – Private Opening balance Additions and distributions received repayments Disposals, value movement Fair IFRS 9 reclassification gain Exchange balance Closing Sensitivity analysis of fair value 3 financial movements for Level assets measured FVOCI at FVOCI: at measured assets 3 financial Level for movements value of fair sensitivity analysis the The shows below table Financial assets at fair value through profit or loss profit through fair value at assets Financial – Hedge funds Opening balance Fair value movement Fair value movement Fair value movement Fair value movement Fair value movement Fair 2017. in or loss profit through value fair at classified 3 instruments no Level were There Financial assets at fair value through profit profit through fair value assets at Financial or loss Available-for-sale financial assets Available-for-sale Financial assets measured at FVOCI FVOCI at assets measured Financial Fair value movement Fair Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

113 ’000 Total 893 ₦ 12,893 (45,613) (89,629) 796,525 245,960 209,300 (887,151) (943,923) 538,816 (219,461) 3,208,212 1,617,016 (3,762,225) (2,617,160) 23,818,216 18,052,191 27,403,230 11,405,258 46,503,536 46,502,643 76,154,290 44,189,369 13,647,879 20,685,075 48,258,049 26,052,673 (3,204,887) (30,608,117) 46,121,104 44,154,788 46,185,074 461,391,586 45,965,613 46,504,429 74,310,722 617,698,108 – – – – – – – – – – – – – – – – – ’000 ₦ 9,848 8,610 56,554 12,893 (19,778) 66,402 46,624 174,755 272,950 (808,081) (752,847) (752,847) Unallocated (752,847) (752,847) (752,847) 13,072,833 15,951,222 13,533,431 15,951,222

– – – – – ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Fund ₦ (6,010) (10,739) 141,802 209,300 (334,086) (750,495) (836,988) The Nigeria The 538,816 8,494,318 1,164,032 7,679,155 1,344,066 (2,617,160) Infrastructure 27,403,230 10,379,868 20,846,925 20,846,925 20,327,973 40,582,636 13,647,879 20,685,075 30,236,130 26,052,673 (3,204,887) (30,608,117) 17,145,221 16,377,977 20,308,110 173,264,283 20,308,110 20,846,926 56,288,803 269,851,912

– – – – – – – – – – – – ’000 Fund 893 ₦ (23,907) (54,080) 493,622 658,791 The Future Future The (850,939) (129,262) 658,791 Generations (219,461) 1,469,123 1,249,818 5,378,109 1,016,780 2,418,184 (1,410,122) 11,490,431 18,409,220 18,408,327 25,260,097 20,081,103 19,022,915 18,629,573 195,350,614 18,410,112 18,410,112 223,028,895

– – – – – – – – – – – – – – ’000 Fund ₦ (5,032) (36,212) (15,696) (64,166) 575,057 161,101 (669,772) (707,034) 3,823,619 4,938,373 8,000,238 8,000,238 1,013,794 1,411,906 8,828,378 8,707,272 8,000,238 8,000,238 8,000,238 1,411,906 17,493,387 92,776,689 The Stabilisation Stabilisation The 111,283,870 Fund information continued Fund Interest income Interest 8. and results revenue Fund 31 December 2018 31 Investment income Investment Interest income on instrument measured at FVPL measured income on instrument Interest Net gain on financial assets Net gain on financial Net foreign exchange gains exchange Net foreign Total operating segment income segment operating Total Investment management fees Investment Local custodian fees custodian Local Global custodian fees Global custodian Impairment on financial assets charge Total operating fund profit operating Total Revenue from infrastructure subsidiaries investment Revenue from Expense from infrastructure subsidiaries infrastructure investment Expense from Loss from infrastructure subsidiaries investment subsidiaries infrastructure from Loss Other income Operating and administrative expenses Operating and administrative Interest expense Interest Share of profit of investment in associate of investment of profit Share Profit before tax before Profit Taxation Profit for the year from continuing operations continuing year from for the Profit Profit from discontinued operations discontinued from Profit Profit for the year for the Profit Profit attributable to: attributable Profit Owners of NSIA Non-controlling interest Reportable fund assets and cash equivalents Cash Investment securitiesInvestment Other assets Inventories Investment in subsidiaryInvestment Investments accounted for using the equity method for accounted Investments Property and equipment Intangible assets Reportable fund liabilities Other liabilities Borrowings

– ’000 ’000 ₦ ₦ Authority Authority Fair value Fair value Fair 1,567,530 2,171,076 3,456,830 1,698,057 4,152,936 1,908,441 1,520,494 1,591,131 7,759,434 17,667,341 30,346,432 15,456,623 254,513,055 289,110,934 18,568,248 273,747,926 325,085,272 – – ’000 ’000 ₦ ₦ Level 3 Level 3 Authority Authority 1,567,530 2,171,076 3,456,830 1,698,057 4,152,936 1,908,441 1,520,494 1,591,131 7,759,434 30,346,432 15,456,623 254,513,055 274,971,114 18,568,248 256,080,585 310,945,452 – – – – – – – – – – – – – – ’000 ’000 ₦ ₦ Level 2 Level 2 Authority Authority 17,341,779 14,139,820 17,341,779 14,139,820 – – – – – – – – – – – – – – – – – – ’000 ’000 ₦ ₦ Level 1 Level 1 Authority Authority

– ’000 ’000 ₦ ₦ Authority Authority 1,567,530 2,171,076 3,456,830 1,698,057 4,152,936 1,908,441 1,520,494 1,591,131 7,759,434 17,341,779 30,346,432 15,456,623 Carrying value Carrying value 254,513,055 285,232,084 18,568,248 273,422,364 321,206,422 Products and servicesProducts in times of economic stress. stabilisation support provide the Federation to To future to provide in order investments growth portfolio in a diversified of appropriate invest To reserves in Nigeriageneration of Nigerians such a time as the hydrocarbon base for a solid savings exhausted. are returns in Nigeria projects in infrastructure and contribute financial invest that meet our targeted To in Nigeria. of essential infrastructure the development to NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Fund information Fund

112 Information regarding the results of each fund is included below. Performance is measured based on fund as included in the internal internal the in based included on fund as measured is Performance below. included fund is of each results the regarding Information most is information such that believe directors the performanceas measure to used profitability is reports.management Funds fund. profitability of each the evaluating in relevant The Stabilisation Fund (SF) Stabilisation Fund The (FGF) Generations Fund Future The NigeriaThe Infrastructure Fund (NIF) For each of the funds, the management reviews the internal management report. The objective and principal investment products report. investment The management objective principal and internal the reviews management the funds, of the each For follows: respectiveof the reportable as are segments Reportable Fund The Authority has three funds being the Stabilisation Fund (SF), the Future Generations Fund (FGF) and the Nigeria Infrastructure Nigeria the and (FGF) Fund Generations Future the (SF), Fund Stabilisation the being funds The three Authority has contain and objectives strategies and investment different entail they as separately managed is funds of the Each (NIF). Fund products. different in investments 8. 31 December 2017

31 December 2018

Notes to theConsolidated andSeparate Statements Financial (continued) Financial assets Financial Other assets Financial assets Financial Other receivables Held-to-maturity Account receivables receivables Account Loans and receivables Loans Intercompany receivables receivables Intercompany Advances to staff to Advances Financial liabilities Financial payables Trade Financial instruments at amortised cost Financial Intercompany payables Intercompany Other payables Financial liabilities Financial payables Trade Intercompany payables Intercompany Other payables Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – 115 ’000 ’000 ’000 ’000 ’000 2017 2017 2017 2017 2017 ₦ ₦ ₦ ₦ ₦ (2,683) Authority Authority Authority Authority Authority 869,908 362,081 174,327 443,692 362,081 1,720,619 1,565,720 4,156,247 6,847,302 1,329,377 31 December 31 31 December 31 31 December 31 31 December 31 31 December 31 4,153,564 4,156,247 12,544,352 21,339,050

– – ’000 ’000 ’000 ’000 ’000 2018 2018 2018 2018 2018 ₦ ₦ ₦ ₦ ₦ Authority Authority Authority Authority Authority 762,044 440,462 356,063 162,125 (290,218) 884,039 796,525 1,906,370 3,230,018 1,174,257 1,386,859 5,905,172 1,250,077 31 December 31 31 December 31 31 December 31 31 December 31 31 December 31 (4,724,175) 1,174,257 1,386,859 16,195,559 23,512,933

– – – – ’000 ’000 ’000 ’000 ’000 2017 2017 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group Group Group Group ₦ ₦ ₦ ₦ ₦ (2,683) 869,908 174,327 443,692 219,465 1,720,619 1,565,720 4,156,247 2,603,755 7,055,751 1,329,377 31 December 31 31 December 31 31 December 31 31 December 31 31 December 31 4,153,564 4,156,247 2,603,755 12,544,352 21,766,964

– ’000 ’000 ’000 ’000 ’000 2018 2018 2018 2018 2018 Group Group Group Group Group ₦ ₦ ₦ ₦ ₦ 762,044 536,178 440,462 356,063 162,125 305,283 (290,218) 245,960 796,525 536,178 2,412,789 3,230,018 3,208,212 5,905,172 1,250,077 31 December 31 31 December 31 31 December 31 31 December 31 31 December 31 (5,868,673) 3,208,212 16,195,559 23,818,216 Net gain on financialassets at fair value through profit(FVTPL) orloss Net gain on financialassets Interest income on financialassets at FVTPL Interest income Interest Investment income Investment

Net gains on sale of equity instruments Unrealised gain on financial swap Unrealised Realised gain on financial swap hedge funds and other securities value changes on private equity, Fair 12.1 Net loss on US treasuryproducts income and fixed notes Net gain on financial assets at fair value through profit or loss (Note 12.1) (Note or loss profit Net gain on financial assets at fair value through Interest income on US treasuryInterest notes 12. Interest income from fixed income products fixed income from Interest 11. Investment income from securities income from Investment Interest income on US treasury income on US Interest notes deposits income on fixed Interest market income on open Interest bills operation income on bank balances Interest 10. Interest income on Eurobonds Interest Interest income on NigerianInterest treasury bills 9.

’000 Total 536 ₦ 7,960 1,201 (6,765) (47,755) (85,223) 434,988 (654,562) (402,038) (709,082) 2,603,755 4,153,564 1,652,172 2,453,380 3,534,631 (4,719,621) 21,766,964 31,367,992 22,556,738 22,336,959 49,134,358 13,797,596 16,306,560 29,285,918 (2,146,165) (33,514,157) (4,719,621) 30,176,455 29,467,373 429,852,525 22,959,312 22,557,274 22,557,274 32,820,549 533,882,579 – – – – – – – – – – – – – – – – – 63 ’000 600 214 814 814 ₦ 7,960 48,502 669,615 Unallocated 3,106,940 5,881,620 (2,425,830) (2,417,056) 3,825,120 5,881,620 (2,425,830) (2,417,056) (2,417,056) (2,417,056)

– – – – – ’000 Fund ₦ 1,138 (6,765) (3,758) (51,628) (85,223) 434,988 (10,523) The Nigeria The 1,485,712 8,596,589 9,404,928 2,453,380 3,534,631 (1,946,727) Infrastructure 8,596,589 8,596,589 8,596,589 10,916,155 31,367,992 31,237,818 13,797,596 16,258,058 15,453,462 (2,146,165) (33,514,157) (1,946,727) 12,350,239 12,339,716 172,267,774 18,988,093 245,420,692

– – – – – – – – – – – – – ’000 Fund 536 ₦ (37,720) 223,348 The Future Future The (669,889) (347,026) (402,038) Generations (707,609) (347,026) 6,742,228 2,603,755 3,270,519 7,774,644 6,234,299 6,234,299 11,382,641 12,839,850 12,132,241 180,338,298 11,785,215 11,383,177 11,383,177 188,112,942

– – – – – – – – – – – – – – – ’000 (38) (38) Fund ₦ 9,050 (6,277) 15,327 (57,102) 934,673 4,107,981 4,994,564 2,050,447 1,716,537 4,985,552 4,994,602 4,994,564 4,994,564 4,994,564 1,716,537 77,246,453 17,226,925 96,523,825 The Stabilisation Stabilisation The NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

114

31 December 2017 31

Notes to theConsolidated andSeparate Statements Financial (continued) Interest income Interest Investment income Investment Net gain on financial assets Net gain on financial Net foreign exchange gains/(losses) exchange Net foreign Total operating segment income segment operating Total Investment management fees management Investment Local custodian fees custodian Local Foreign custodian fees custodian Foreign Total fund investment management and custodian fees and custodian management fund investment Total Total operating fund profit operating Total Revenue from infrastructure subsidiaries infrastructure investment Revenue from Expense from infrastructure subsidiaries infrastructure investment Expense from Loss from infrastructure subsidiaries subsidiaries infrastructure from Loss investment Other income Operating and administrative expenses Operating and administrative Total operating and administrative expenses and administrative operating Total Finance cost Finance Share of profit of investment in associate of investment of profit Share Profit before tax before Profit Taxation Profit after tax Profit Profit attributable to: attributable Profit Owners of NSIA Non-controlling interest Reportable fund assets and cash equivalents Cash Investment securitiesInvestment Other assets Inventories Investment in associate Investment Property and equipment Intangible assets Reportable fund liabilities Other liabilities Borrowings Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – – – 117 ’000 Total ₦ 3,268 Authority 249,094 318,493 321,761 570,855

– – – – – – – – – – – – – – – – – ’000 ₦ credit- Authority impaired Purchased

– – – – – – – – – – – – – – – – – ECL ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL ₦ Stage 3 Lifetime Authority

– – – – – – – – – – – – – – – – – ECL ’000 ₦ Stage 2 Lifetime Authority

– – – – – – – – – – – – ECL ’000 ₦ Stage 1 3,268 Authority 12-month 249,094 318,493 321,761 570,855 Impairment charge on financialassets continued Loss allowance as at 1 January as at 2018 allowance Loss 14. Movements with P&L impact Movements Transfers: Stage 2 1 to Stage from Transfer Stage 3 1 to Stage from Transfer Transfer from Stage 2 to Stage 1 Stage 2 to from Transfer Changes in financial assets during the year Changes in financial assets during the Changes in PDs/LGDs/EADs Changes in PDs/LGDs/EADs Changes to model assumptions and methodologies model assumptions and methodologies Changes to Modification of contractual of financial assets cash flows Unwind of discount Unwind FX and other movements FX and other movements Total net P&L charge during the period during net P&L charge Total Other movements with no P&L impact with no P&L Other movements Transfers: Stage 2 Stage 1 to from Transfer Transfer from Stage 1 to Stage 3 Stage 1 to from Transfer Transfer from Stage 2 to Stage 1 Stage 2 to from Transfer Financial assets derecognised during the period derecognised assets Financial Write-offs Loss allowance as at 31 December 2018 31 December as at allowance Loss

– – – – – – – – – – – – ’000 ’000 ’000 2017 2018 Total Group ₦ ₦ ₦ 3,268 Authority Authority 321,761 321,761 940,655 943,923 1,703,128 31 December 31 31 December 31 1,703,128 2,011,745 2,955,668

– – – – – – – – – – – – – – – – – ’000 ’000 ’000 2018 2018 Group Group ₦ ₦ ₦ credit- Authority impaired Purchased 943,923 943,923 31 December 31 31 December 31 18,901,727 18,901,727

– – – – – – – – – – – – – – – – – ECL ’000 ’000 2017 Group Group ₦ ₦ Stage 3 Lifetime 1,652,172 31 December 31 1,652,172

– – – – – – – – – – – – – – – – – ECL ’000 ’000 2018 Group Group ₦ ₦ Stage 2 Lifetime 31 December 31 18,052,191 18,052,191

– – – – – – – – – – – – ECL ’000 Group ₦ Stage 1 3,268 12-month 940,655 943,923 2,011,745 2,955,668 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Net foreign exchange gains Impairment charge on financialassets

116

13.

Notes to theConsolidated andSeparate Statements Financial (continued) The following tables explain the changes in the loss allowance of financial assets between the beginning and the end of the annual annual of the between end the assets and beginning the of financial allowance loss the in changes the explain tables The following period: 14. Net foreign exchange gains exchange Net foreign Financial assets at amortised assets cost Financial Loss allowance as at 1 January as at 2018 allowance Loss Movements with P&L impact Movements Transfers: Stage 2 Stage 1 to from Transfer Stage 3 Stage 1 to from Transfer Transfer from Stage 2 to Stage 1 Stage 2 to from Transfer Changes in financial assets during the year Changes in financial assets during the Changes in PDs/LGDs/EADs Changes in PDs/LGDs/EADs Changes to model assumptions and methodologies model assumptions and methodologies Changes to Modification of contractual cash flows of financial assets Unwind of discount Unwind FX and other movements FX and other movements Total net P&L charge during the period net P&L charge Total Other with no P&L impact movements Transfers: Stage 2 Stage 1 to from Transfer Transfer from Stage 1 to Stage 3 Stage 1 to from Transfer Transfer from Stage 2 to Stage 1 Stage 2 to from Transfer Financial assets derecognised during the period assets derecognised Financial Write-offs Loss allowance as at 31 December allowance 2018 Loss Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – 119 ’000 ’000 2017 2017 558 ₦ ₦ 7,960 7,960 Authority Authority 37,500 40,888 30,000 13,500 772,662 298,931 131,033 145,688 1,699,330 31 December 31 31 December 31 3,170,090

– – 63 ’000 ’000 2018 2018 ₦ ₦ Authority Authority 57,818 41,900 15,000 55,256 100,000 361,218 533,047 190,494 1,927,727 1,025,390 31 December 31 31 December 31 1,025,390 3,282,523

– – ’000 ’000 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 720 Group Group ₦ ₦ 7,960 7,960 46,959 64,079 79,528 23,245 853,547 136,950 261,857 1,891,816 1,360,920 31 December 31 31 December 31 4,719,621

63 ’000 ’000 2018 2018 Group Group ₦ ₦ 57,818 71,900 15,000 55,256 100,000 488,039 855,930 190,493 1,927,726 1,769,216 8,600,000 1,036,042 31 December 31 31 December 31 3,762,225 11,405,258 Operating expenses and administrative Other income 1.01 billion of fiduciary income relates to fund management fees earned on management of Nigeria Bulk Electricity Trading Plc Plc Electricity Bulk Trading of Nigeria on management earned fees fund management to relates of fiduciary income billion 1.01 (NBET) funds. on differential cost for of Nigeria Government Federal the by disbursement approved to relates of fertiliser on sales differentials Cost settle shortfalls to the Group the of to granted was differential The cost Ltd. NAIC-NPK subsidiary Group the by of fertiliser sales the (PFI). Initiative Fertiliser Presidential 2018 and 2017 the of the tenor the benefit of the over value fair of the amortisation line straight the from arose loan rate market below Benefit from information. additional for 29.1 See Note borrowing. 18. Directors’ expenses (Non-executives) Directors’ Personnel expenses (Note 18.1) (Note expenses Personnel Depreciation Amortisation fees Audit Non audit fees fees Other professional expenses General and administrative Office rent and other expenses expenses Travel Benefit from below market below loan Benefit from rate Cost differential on fertiliser on sales differential Cost Fiduciary income 17.

– – – – – – – – – – ’000 ’000 ’000 2017 2017 2017 ₦ ₦ ₦ Authority Authority Authority 31 December 31 31 December 31 31 December 31

– – – – – – – – – – – ’000 ’000 ’000 2018 2018 2018 ₦ ₦ ₦ Authority Authority Authority 31 December 31 31 December 31 31 December 31

’000 ’000 ’000 2017 2017 2017 Group Group Group ₦ ₦ ₦ 6,593 50,417 5,079,373 7,280,272 3,332,832 31 December 31 31 December 31 31 December 31 31,317,575 33,507,564 17,815,087 31,367,992 33,514,157 33,507,564

– – ’000 ’000 ’000 2018 2018 2018 Group Group Group ₦ ₦ ₦ 3,399,132 5,272,195 2,318,539 31 December 31 31 December 31 31 December 31 27,403,230 30,608,117 19,618,251 27,403,230 30,608,117 30,608,117 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Revenue fromRevenue infrastructure subsidiaries investment Expense from infrastructure subsidiaries investment Cost of sales of fertilisers of of sales Cost

118

15.

Notes to theConsolidated andSeparate Statements Financial (continued) 16. Guarantee fee income in 2017 represents the amortised portion of the non-refundable fee calculated as a percentage of the a percentage amortised the as portion represents fee calculated non-refundable of the 2017 in fee income Guarantee for guarantee providing for Limited, Company Guarantee Infrastructure Credit subsidiary, Group's the by earned amount guaranteed of the results the and year, financial the during subsidiary the in of control a loss was There entities. some issuing by bonds issued of statement the in entities controlled jointly and associated from of profit part as been included share of the have subsidiary income. comprehensive Revenue from sale of fertiliser represents revenue from sale of finished and packaged fertiliser to agro-dealers and State Governments. State agro-dealers and packaged to and fertiliser sale of finished from revenue represents sale of fertiliser from Revenue Revenue from sale of fertiliserRevenue from Guarantee fee income fee Guarantee 16.1 Cost of sales of fertiliser 16.1) Cost (Note Guarantee fee expenses fee Guarantee Raw materials consumed Blending plants fees Direct trucking, and other logistics storage clearing expense and testing Fertiliser Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – – 121 ’000 ’000 ’000 2017 2017 2017 ₦ ₦ ₦ Authority Authority Authority 869,908 7,800,593 9,541,186 31 December 31 31 December 31 31 December 31 17,341,779 17,341,779 254,513,055 131,588,930 17,341,779 17,341,779 404,313,672

– – – – – – – – – ’000 ’000 ’000 2018 2018 2018 ₦ ₦ ₦ Authority Authority Authority (569,926) 3,984,976 7,934,647 31 December 31 31 December 31 31 December 31 93,069,036 10,260,970 285,802,010 285,232,084 178,487,028 285,232,084 148,469,178 285,232,084 285,232,084 441,635,909

– – – – – – – – – – – – ’000 ’000 ’000 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group Group ₦ ₦ ₦ 175,437 869,908 7,976,030 9,541,186 31 December 31 31 December 31 31 December 31 17,341,779 17,517,216 262,692,958 148,772,443 17,517,216 17,517,216 429,852,525

– – – – – – – – – ’000 ’000 ’000 2018 2018 2018 Group Group Group ₦ ₦ ₦ (620,955) 1,641,036 3,984,976 9,474,482 31 December 31 31 December 31 31 December 31 93,069,036 10,260,970 286,822,091 287,443,046 178,487,028 286,822,091 165,095,013 286,822,091 286,822,091 461,391,586 21.1 21.2 21.3 21.4 21.5 21.6 Financial assetsFinancial measured amortised at cost Held-to-maturity investments Investment securities Investment

Impairment/expected loss credit Maturity analysis: Current Open market bills) bills (OMO operations deposits Fixed and receivables Loans Nigerian treasury bills Eurobonds 21.2 Nigerian treasury bills Eurobonds Held-to-maturity 21.1 21. Maturity analysis: Maturity analysis: Current Non-current Financial assets measured at amortised assets measured cost Financial Loans and receivables and Loans Financial assets measured at FVOCI assets measured Financial Available-for-sale investments investments Available-for-sale Financial assets at fair value through profit or loss profit at fair value through assets Financial

– – ’000 ’000 ’000 2017 2017 2017 249 ₦ ₦ ₦ Authority Authority Authority 96,065 1,603,265 8,545,048 31 December 31 31 December 31 31 December 31 8,545,297 1,699,330

– – ’000 ’000 ’000 2018 2018 2018 133 ₦ ₦ ₦ Authority Authority Authority 103,385 1,824,342 31 December 31 31 December 31 31 December 31 1,927,727 29,531,728 32,245,474 61,777,335

’000 ’000 ’000 2017 2017 2017 473 Group Group Group ₦ ₦ ₦ 98,722 85,223 85,223 316,208 1,793,094 31 December 31 31 December 31 31 December 31 1,891,816 22,020,278 22,336,959

’000 ’000 ’000 2018 2018 2018 133 Group Group Group ₦ ₦ ₦ 103,385 1,824,341 2,617,160 31 December 31 31 December 31 31 December 31 2,617,160 1,927,726 43,908,683 32,245,474 76,154,290 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Personnel expenses Interest expense Interest Cash and cash equivalents

120

18.1

Notes to theConsolidated andSeparate Statements Financial (continued) 19. Salaries and allowances Defined contribution plan 20. Effective interest on borrowings relates to the interest expense the Group incurred in connection with the borrowing of funds. The funds. of borrowing the connection with in incurred expense Group the interest the to relates on borrowings Effective interest Presidential the finance to Group) of the subsidiary (a NAIC-NPK to of Nigeria Bank Central the by provided was borrowed amount borrowings. of the details for 29 See stop-gap Note provided financing. Authority the initially which for Initiative Fertiliser Effective interest on borrowings interest Effective Money market placements classified as cash and cash equivalents are placements with less than 90 days maturity period. 90 days than less with placements are equivalents cash and cash as classified placements Money market Cash on hand Cash Bank balances Money market placements Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – 123 ’000 ’000 2017 2017 ₦ ₦ Authority Authority 29,138 869,908 869,908 869,908 869,908 31 December 31 31 December 31 34,167,273 38,113,681 72,280,954 72,310,092 72,280,954 72,310,092 72,310,092

– – ’000 ’000 2018 2018 (929) ₦ ₦ Authority Authority 109,269 762,044 2,171,076 3,456,830 1,626,000 31 December 31 31 December 31 30,346,432 35,973,409 36,082,678 22,963,236 26,841,410 17,238,887 26,933,165 69,343,323 131,230,291 35,974,338 36,082,678 36,082,678 148,469,178 148,469,178

– – – – – – – – – ’000 ’000 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group ₦ ₦ 869,908 869,908 869,908 869,908 2,915,213 1,073,895 31 December 31 31 December 31 35,296,096 10,923,049 46,219,145 48,060,463 46,219,145 49,134,358 49,134,358

– – ’000 ’000 2018 2018 Group Group ₦ ₦ 762,044 8,333,282 1,626,000 31 December 31 31 December 31 (2,334,713) 11,134,143 16,113,745 33,246,457 10,942,912 44,189,369 22,963,236 26,841,410 17,238,887 43,559,000 69,343,323 147,856,126 35,581,170 44,189,369 44,189,369 165,095,013 165,095,013 For swap instruments, the balance in 2018 shows the fair value of the financial assets arising from the currencyswap the from arising assets financial of the value fair the shows 2018 in balance the instruments, swap For million) $455 (2017: million of $515.5 amount contract The notional (CBN). of Nigeria Bank Central the with transactions of volume the indicate amounts The notional measured. were value fair in changes the onwhich basis the represents counterparty the of As result a risk. credit the nor risk market the neither of indicative period are and the end at as transactions is backed counterparty(CBN) the as to minimal, be asset financial on the risk impact the of credit assessed have we involved, not was adjustment value a credit foregoing, of the In lieu of Nigeria. Government Federal of the guarantee sovereign the by the derivative. of valuation fair the on effected Other assets Investment securities Investment continued assetsFinancial fair at value through profit or loss Financial assets: Financial Other receivables receivables Intercompany Impairment/expected loss credit financial assets Total Account receivables Account of Nigeria Government on behalf of the Federal incurred Cost Non-financial assets: Prepayment Total other assets Total Maturity analysis: Current Non-current Fixed income products Fixed US treasury notes Maturity analysis: Maturity analysis: Current Currency 21.6.1) swap (Note equity investments Private only equityHedge funds and long investments Nigeria (NIDF) Infrastructure Debt Fund Non-current 21.6.1 22. 21. 21.6

– – – – – – – ’000 ’000 ’000 2017 2017 2017 ₦ ₦ ₦ Authority Authority Authority 1,528,500 2,388,190 31 December 31 31 December 31 31 December 31 12,208,697 24,805,655 69,220,300 21,437,588 254,513,055 254,513,055 131,588,930 254,513,055 131,588,930 254,513,055 131,588,930

– – – – – – – – – – – – – – ’000 ’000 ’000 2018 2018 2018 ₦ ₦ ₦ Authority Authority Authority 523,000 7,411,647 7,934,647 31 December 31 31 December 31 31 December 31 7,934,647 7,934,647

– – – – – ’000 ’000 ’000 2017 2017 2017 Group Group Group ₦ ₦ ₦ 609,069 609,069 1,528,500 2,388,190 31 December 31 31 December 31 31 December 31 12,208,697 24,805,655 69,220,300 38,012,032 262,692,958 262,692,958 148,163,374 262,692,958 148,772,443 262,692,958 148,772,443

– – – – – – – – – – – – – – ’000 ’000 ’000 2018 2018 2018 Group Group Group ₦ ₦ ₦ 523,000 8,951,482 9,474,482 31 December 31 31 December 31 31 December 31 9,474,482 9,474,482 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Loans and receivables Financial assetsFinancial measured FVOCI at Available-for-sale investment securitiesAvailable-for-sale investment

122

21.3

Notes to theConsolidated andSeparate Statements Financial (continued) 21.4 Fixed deposits and OMO bills deposits and OMO Fixed MTN securities, Bridge Academies Limited and Limited Bridge securities, Academies MTN Chieftain Investments Maturity analysis: Non-current 21.5 Equity instruments NG Clearing Ltd Fixed income products Fixed Nigeria (NIDF) Infrastructure Debt Fund Nigerian treasury bills US treasury notes Hedge funds and long only equity managers securities MTN Private equity investments equity investments Private Maturity analysis: Current Non-current Maturity analysis: Maturity analysis: Current Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– 125 ’000 ₦ 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Carrying amount 2017 7,063,155 9,014,500 16,085,655

– – ’000 ₦ 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Carrying amount 2018 5,108,826 5,116,826 2017 interest 1,954,329, which led to a reduction led to which 1,954,329, ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 99.97% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 100.00% 100.00% 100.00% % of ownership 2018 interest 99.7% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 50.00% 100.00% % of ownership

Nigeria Nigeria Nigeria Nigeria Nigeria Nigeria Nigeria Nigeria Nigeria Place of business/ of Place Country of incorporation of Country United States of America States United United States of America States United Investments in subsidiariesInvestments continued Information on subsidiary the controlled entities Authority by NSIA Motorways Investment Corporation is a wholly-owned subsidiary domiciled in Nigeria. The subsidiary was set up to invest invest to up set was The subsidiary Nigeria. in domiciled a wholly-owned is subsidiary Corporation Investment Motorways NSIA in incorporated was transport road The infrastructure. company plaza related and toll bridges, of roads, development the in 2014. The funds. Partner equity General private investee portfolio a other holds in that a Partnership of investments is LP Brussels KG was The company LP. Brussels partner KG in a limited is NSIA NSIA. owned by is which I LLC, Acquisition KG is Partnership of the of ($11,667,637) of capital a return was there year, financial the During 2014. in incorporated in the capital apportionment NSIA. owned capital by the in private in invest to up set was The subsidiary Nigeria. in domiciled a wholly-owned is subsidiary Limited Equity Co. Private FGF 2015. in incorporated was Theequities. company equities private in invest to up set was The subsidiary Nigeria. in domiciled a wholly-owned is subsidiary Limited Investments FGF 2015. in incorporated was The company investments. other and investment of agricultural carry to setup business was on the It Nigeria. in domiciled of NSIA, owned subsidiary a wholly is NAIC 2016. in incorporated was kinds. The of all company businesses and land agricultural in investment management, and equities. private in invest to up set was The subsidiary Nigeria. in domiciled a wholly-owned is subsidiary Beta Limited PE FGF 2015. in incorporated was The company develop, hold, acquire, purchase, to and in investing a wholly-owned is subsidiary Limited Company Property Investment NSIA incorporated was kind. The company of any property landed estate or real tenure), any (of land any account to turn and work in 2014. invest to up set was The subsidiary Nigeria. in domiciled wholly-owned is subsidiary Limited Company Investment Power NSIA other and lines, transmission turbines, gas to limited but not including power to of infrastructure related development the in 2014. in incorporated was The company infrastructure equipment. and distribution and transmission generation, 24. 24.1 Name of entity NSIA Motorways Investment Corporation (NMIC) (i) i) ii) iii) iv) v) vi) vii) vii) KG Brussels LP (ii) KG KG Acquisition I LLC Acquisition KG FGF Private Equity Co. Limited (iii) Limited Equity Co. FGF Private FGF Investments Limited (iv) Limited FGF Investments NSIA Agriculture Investment Company (v) Company Investment NSIA Agriculture FGF PE Beta Limited (vi) FGF PE Beta Limited NSIA Property Investment Company Limited (vii) Limited NSIA Property Company Investment NSIA Power Investment Company Limited (viii) Limited Company Investment NSIA Power NSIA Healthcare Development and NSIA Healthcare (ix) Limited Investment Company Infrastructure Credit Guarantee Company Company Infrastructure Guarantee Credit (24.2) Limited

– – – – – – ’000 ’000 2017 2017 ₦ ₦ Authority Authority 7,096,155 8,989,500 8,062,750 8,022,905 31 December 31 31 December 31 16,085,655 16,085,655 16,085,655 16,085,655

– – – – – – – ’000 ’000 2018 2018 ₦ ₦ Authority Authority 5,116,826 5,116,826 31 December 31 31 December 31 5,116,826 5,116,826 5,116,826 16,085,655 (10,968,829)

’000 2017 Group ₦ 4,175,582 9,622,014 31 December 31 13,797,596 13,797,596 13,797,596

’000 2018 Group ₦ 8,991,275 31 December 31 11,693,800 20,685,075 20,685,075 20,685,075 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Investments in subsidiaries in Investments

Inventories

124 23. Expected credit losses on trade receivables from the Group's subsidiary NAIC-NPK Limited have been accounted for in line with the with line in for been accounted have Limited NAIC-NPK subsidiary Group's the from Expected on trade receivables losses credit full in balance its receivable recovered has Company the reporting the date, to Subsequent reporting standards. financial applicable obligors. various the from Cost incurred on behalf of the Federal Government of Nigeria relates to the cost the Group has incurred on behalf of the Federal Federal of the on behalf incurred has Group the cost the to relates of Nigeria Government Federal of the on behalf incurred Cost project. Bridge Niger 2nd on the of Nigeria Government

Notes to theConsolidated andSeparate Statements Financial (continued) 24. There were no inventories pledged as security for liabilities (2017: Nil). (2017: pledged security as liabilities for no inventories were There Raw materials Finished goods Finished Maturity analysis: Current Additions during the year Additions Disposal of subsidiary/loss of control the end of the year At At the beginning of the year the beginning At Investment types: Investment in equityInvestment shares shares preference in irredeemable Investment Maturity analysis: Non-current Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – - 127 ’000 ’000 ’000 2017 2017 2017 490 Group ₦ ₦ ₦ Authority Authority 2,453,380 1,600,000 1,600,490 31 December 31 31 December 31 31 December 31 2,453,380 1,600,490 1,600,490 Carrying amount

– – – – – – ’000 ’000 ’000 2018 2018 2018 Group ₦ ₦ ₦ Authority Authority 2,758,781 1,600,490 9,014,500 31 December 31 31 December 31 31 December 31 2,758,781 10,614,990 Carrying amount 10,614,990 10,614,990

0% 0% ’000 ’000 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 490 49% Group Group Group ₦ ₦ interest 60,049 20.91% 434,988 1,957,853 2,453,380 % ownership ownership % 31 December 31 31 December 31 2,453,380 2,453,380 495,037.00

’000 ’000 2018 2018 2018 30% 30% 49% Group Group Group ₦ ₦ interest 59,960 20.91% 209,300 269,260 2,453,380 % ownership ownership % 31 December 31 31 December 31 10,925,239 13,647,879 13,647,879 13,647,879

Group Place of Place business/ Country of Country incorporation Nigeria Mauritius Nigeria Nigeria 25.4 25.3 25.1 25.2 Notes Investments accounted for using accounted theInvestments equity method Pandagric Novum Ltd Novum Pandagric Panda Agriculture Operations and Management Ltd Agriculture Panda Investment in associates in Investment Nigeria Mortgage (NMRC)Company Refinance (FHFL) Limited Homes Funds Family Interests in associates and joint ventures and joint associates in Interests capital share have below listed The entities 2018. December 31 at as Group of the ventures joint and associates the are out below Set their also is or registration The of incorporation country Group. the directly by held are which shares, solely of ordinary consisting held. rights proportion the same the as of voting is interest proportion the and of ownership of business, place principal Addition during the year Addition of fair value reserves and joint venture Share of associate the end of the year At Maturity analysis: Non-current Name of company At the beginning of the year the beginning At Share of profit of associate and joint venture and joint of associate of profit Share Associates and joint ventures Associates follows: as are income of comprehensive statement the in recognised The amounts Associates balance: of this movement a detailed The shows below 25. follows: as are position of financial statement the in recognised The amounts

– – ’000 ’000 2017 2017 90% 90% ₦ ₦ 100% interest Authority 9,014,500 31 December 31 9,014,500 % of ownership

– – ’000 ’000 2018 2018 90% 90% ₦ ₦ 100% interest Authority 9,014,500 31 December 31 (9,014,500) % of ownership Nigeria Nigeria Nigeria Country of of Country incorporation Place of business/ business/ of Place 991.5 million from Africa Finance Corporation (AFC), as additional investment investment additional as (AFC), Corporation Africa Finance from million 991.5 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Loss of control in of Infrastructure control Loss Limited (InfraCredit) Credit Guarantee Company NSIA Healthcare Development and Investment Company Limited is a wholly-owned subsidiary domiciled in Nigeria. The Nigeria. in domiciled a wholly-owned is subsidiary Limited Company Investment and Development Healthcare NSIA to related arrangement or any authority in or body corporation, involved company, any in invest to established was subsidiary 2014. in incorporated was The company management. service delivery and/or infrastructure or healthcare healthcare of modern medical pathology laboratory, radiography, and ancillary healthcare services. The company was incorporated incorporated was services. The company healthcare ancillary and radiography, of modern pathology medical laboratory, in 2016. providers as carry to out business established company liability limited a is AKTHLimited Medical Diagnostics Advanced incorporated was services. The company healthcare ancillary and radiography, of modern pathology medical laboratory, in 2017. Company Investment Agriculture Nigeria under established was It 2016. in incorporated was company liability Limited NAIC-NPK process, treat, manufacture, to and plants of fertiliser proprietors as carry and run on business establish, to ownership) (100% fertility the or water. of soil improving to or artificial) suited (natural substances all and fertilisers in deal and supply produce, FMCU Advanced Medical Diagnostics Limited is a limited liability company established to carry out business as providers providers as carry to out business established company liability a limited is Limited Medical Diagnostics Advanced FMCU

As stated above, there was loss of control of the Group's investment in InfraCredit through sale of 50% equity interest to a new to equity sale of 50% interest through InfraCredit in investment Group's of the of control loss was there As above, stated information. more for equity the 25 method’ Note using in for accounted period. the See ‘Investments during shareholder in the company. This amount represents AFC's investment in the company. The company recognised this investment in share capital share in investment this recognised The company company. the in investment AFC's represents amount This company. the in the by company the in of control loss also and of ownership dilution led to investment The additional year. of the end the at as joint a as InfraCredit in its investment The recognises Authority now reporting the date. Authorityat as Investment Sovereign Nigeria Ventures. Joint and Associates in – Investments 28 IAS with line in equity accounting using for accounted is which venture 126

ix) subsidiaries: following the in interest indirect Thehas Authority also

Notes to theConsolidated andSeparate Statements Financial (continued) During the year, InfraCredit received $21.98 million and and million $21.98 received InfraCredit year, the During xi) xi) xi) 24.2 x) x) FMCU Advanced Medical Diagnostics Limited (x) Limited Medical Diagnostics Advanced FMCU Cash paid for purchase of shares in subsidiary of shares purchase paid for Cash in subsidiary investment joint venture from to Transfer Opening balance AKTH (xi) Limited Medical Diagnostics Advanced (xii) NAIC-NPK Limited Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 129 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Investments accounted for using accounted theInvestments equity method continued Operations Agriculture Panda and Management Ltd Pandagric Novum Ltd Advanced MedicalLUTH Services Limited (LUTH) Limited (Mauritius) Management Company UFF-NAIC Agriculture Limited (Mauritius) Company UFF-NAIC Investment Agriculture Properties Agricultural Panda Management Ltd Properties Agricultural Panda Management Ltd

25. 25.3 153361. number company with on 2 February 2018 Mauritius in incorporated and shares by limited A company This Limited. Management Properties Agricultural Panda by acquired land and assets farms, all manages and operates The company – a non-Group entity. Ltd Holdings Novum and Limited (Mauritius) Company Investment Agriculture UFF-NAIC owned by entity is 25.4 2017. November on 16 Nigeria in incorporated and shares by limited A company Properties Agricultural Panda and Ltd (Mauritius) & Management Operations Agricultural Panda owned by currently is The company Nigeria. in incorporated duly entity Nigerian a – Ltd Management deal improve, alter, repair, import, export, or lease, purchase, or hire or let take sell, to been established has Limited Novum Pandagric of kinds of all packaging processing, raising, growing, developing, for used accessories, tools, implements, equipment, machinery, in pooling, grading, harvesting, procurement, production, farming, of carry products. also can It businesses agricultural the on concessions ventures, joint partnerships, into enter to able is The forms. company their all in horticulture and agriculture marketing businesses. and farms of integrated development the in entities other with collaborate generally and Limited. Properties Management Agricultural Panda by farm acquired the assets manages and operates currently The company 25.5 of modern pathology medical laboratory providers as carry to out business established company liability a limited is The company 2016. in incorporated was services. The company 25.6 purpose vehicle a special is company This 147877. number registration with 2017 on 8 June Mauritius in incorporated A company Limited. Company Investment Agriculture NSIA and Limited (Mauritius) Management UFF owned by company (SPV) UFF- the to advisory and services exclusively management services investment and management asset provide to established was It ancillary and its affiliates and/or shareholders of the each to and/or Limited (Mauritius) Company Investment Agriculture NAIC activities. 25.7 company with 2017 March on 27 Mauritius in incorporated was Limited (Mauritius) Company Investment Agriculture UFF-NAIC of commitment initial An Fund. Agricultural African Old Mutual and between NSIA venture a joint is The company 146100. number of USD200m size commitment of a total been a target with made has Fund Agricultural African Old Mutual and NSIA from USD25m UFF Fund, Agricultural African Old Mutual by provided are venture joint the parties. to funds the Although third other from of Old Mutual. behalf on act representatives as Limited Management parts various in agriculture driven technology high as well as investments agribusiness and farmland pursuing The currently fund is of Nigeria. 25.8 153425. number company with of February 2018 on 6th Mauritius in incorporated was which shares by limited a company is Panda investment purpose the of long-term for Nigeria in agri-businesses and land agricultural acquire to established was The company operations. farming for fixed assets on acquiring focus also will The company thereto. activities ancillary related and 25.9 2017. on 9 of November Nigeria in incorporated and shares by limited A company Investment Agriculture UFF-NAIC and Limited (Mauritius) PropertiesManagement Agricultural Panda owned by is The company

– – – – – – – – – – – – – – ’000 ’000 2017 2017 490 Group ₦ ₦ Authority 1,600,000 31 December 31 31 December 31 1,600,490 1,600,490 2,453,380 Carrying amount Carrying amount

– – – – – ’000 ’000 490 2018 2018 500 Group ₦ ₦ 1,009 3,052 Authority 1,600,000 1,870,802 9,014,500 9,017,288 1,907,188 31 December 31 31 December 31 1,600,490 9,014,500 1,910,740 Carrying amount Carrying amount 10,614,990 10,889,099 13,647,880

0% 0% 0% 0% 0% 0% 0% 0% 2017 2017 50% 49% 50% Group 100% 100% interest interest Authority 20.91% % ownership ownership % % ownership ownership % 31 December 31

2018 2018 50% 49% 50% 30% 50% 30% 50% 50% 50% 50% 50% 50% 50% Group interest interest Authority 20.91% % ownership ownership % % ownership ownership % 31 December 31

Group Place of Place Place of Place Authority business/ business/ Country of Country Country of Country incorporation incorporation Nigeria Nigeria Nigeria Mauritius Mauritius Mauritius Nigeria Nigeria Nigeria Mauritius Mauritius Mauritius Nigeria Nigeria 25.5 25.1 25.2 25.6 25.3 25.7 25.4 25.8 25.6 25.9 25.7 25.5 Notes Notes 25.10 25.10 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Family Homes Fund Limited Homes (FHFL) Fund Family Nigeria Mortgage(NMRC) Company Refinance

128 Set out below is the summarised financial information for FHFL which is accounted for using the equity the method. using for accounted is which FHFL for information financial summarised the is out below Set Family Homes Fund Limited (FHFL) is an innovative private sector driven financing solution to Nigeria’s housing challenges. It is an is It challenges. housing Nigeria’s to solution financing sector driven private innovative an is (FHFL) Limited Homes Fund Family the to relating liabilities no contingent are There 2016. September in established was and Ministry Federal of Finance of the initiative associate. the in interest Group’s 25.2 25.1 its for available price market no quoted is there entity and business a government is (NMRC) Company Mortgage Refinance Nigeria financial summarised the is out below Set associate. the in interest Group’s the to relating liabilities no contingent are There shares. equity the method. using for accounted is which NMRC for information

Name of company

Notes to theConsolidated andSeparate Statements Financial (continued) Family Homes Funds Limited (FHFL) Limited Homes Funds Family Investment in associates Investment Nigeria Mortgage (NMRC)Company Refinance Name of company Investment in joint venture in joint Investment Medical Services Advanced Limited LUTH Management Company UFF-NAIC Agriculture (Mauritius) Limited Panda Agriculture Operations and Management Ltd Agriculture Panda Company Investment UFF-NAIC Agriculture (Mauritius) Limited Ltd Novum Pandagric Panda Agricultural Properties Management Ltd Management Properties Ltd Agricultural Panda venture in joint Investment Limited Company Infrastructure Guarantee Credit and associates ventures in joint investment Total The Authority has indirect investments in joint ventures in the following entities: in the following in joint ventures AuthorityThe investments has indirect Management Company UFF-NAIC Agriculture (Mauritius) Limited Panda Agricultural Properties Management Properties Ltd Agricultural Panda Company Investment UFF-NAIC Agriculture (Mauritius) Limited Infrastructure Credit Guarantee Company Limited Limited Company Infrastructure Guarantee Credit in joint venture investment Total and associates ventures in joint investments Total Medical Services Advanced (LUTH) Limited LUTH Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – – 131 ’000 ’000 ’000 FHFL FHFL FHFL 2017 2017 2017 ₦ ₦ ₦ 1,000 1,732 1,000 7,060 85,701 (85,701) (85,701) 127,688 (174,901) (175,901) (174,901) 1,201,739 1,500,000 31 December 31 31 December 31 31 December 31 1,332,159 1,332,159 1,507,060

– – – – – – – – ’000 ’000 ’000 FHFL FHFL FHFL 2018 2018 2018 368 ₦ ₦ ₦ 1,000 2,245 95,494 146,293 365,737 (298,557) (146,293) (146,293) (299,557) (298,557) 1,259,966 8,789,834 1,500,000 31 December 31 31 December 31 31 December 31 12,620,971 21,201,697 22,768,877 22,768,878 23,067,434

– – – – ’000 ’000 ’000 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL NMRC NMRC NMRC ₦ ₦ ₦ 41,553 96,779 27,379 18,931 335,784 269,907 569,449 2,453,380 2,453,380 2,650,750 1,105,830 1,912,900 5,925,232 1,920,782 8,225,029 7,402,781 31 December 31 31 December 31 31 December 31 11,733,044 31,761,737 22,816,413 11,733,044 42,540,618 42,540,618 30,807,574

– – – – – ’000 ’000 ’000 2018 2018 2018 NMRC NMRC NMRC ₦ ₦ ₦ 41,785 40,620 93,917 545,727 142,433 662,702 2,758,781 2,758,781 3,497,055 1,604,080 2,125,444 5,925,231 6,505,444 31 December 31 31 December 31 31 December 31 13,193,595 17,024,218 45,033,440 37,598,419 17,743,249 13,193,595 69,291,882 69,291,882 56,098,287 Investments accounted for using accounted theInvestments equity method continued Other liabilities Net assets of associate/joint venture venture Net assets of associate/joint of net assets share Group Difference Carrying value of associate of losses not recognised Share Reconciliation of the summarised financial information presented to the carrying amount of its interest in NMRC and FHFL: and NMRC in carrying the of its interest to amount presented information financial summarised of the Reconciliation Retained earnings Statutory reserves Statutory risk reserve credit value reserves Fair equity Total liabilities and equity Total and reserves Capital Share capital Share premium Share Total assets Total Intangible assets Cash and cash equivalents Cash Property and equipment and reserves Capital Investment propertiesInvestment Loans and advances and Loans securitiesInvestment Inventories Other assets 25. Summarised statement of financial position Summarised statement Tax liabilities Tax Borrowings Debt securities issued liabilities Total

– – – – – – – – – – – – – ’000 ’000 FHFL 2017 2017 ₦ ₦ 9,947 (185,848) (175,901) (175,901) (175,901) 31 December 31 31 December 31

– – – – – – – – ’000 ’000 FHFL 2018 2018 (633) ₦ ₦ 2,788 155,001 (102,777) (175,216) (123,625) (123,625) (123,625) 9,014,500 31 December 31 31 December 31 9,017,288

’000 2017 NMRC ₦ 40,172 11,105 (19,058) 287,178 (132,297) (898,610) 6,149,675 31 December 31 (2,173,194) (1,050,891) 1,945,960 1,926,902 2,214,080

’000 2018 NMRC ₦ 6,981 6,741 (94,387) (92,105) (177,083) (819,333) (983,979) 7,079,510 31 December 31 (3,177,341) 1,935,496 1,841,109 1,749,004 The Group lost control of InfraCredit during the year as stated above. This was as a result of additional investment in investment of additional a result as was This above. stated as year the during of InfraCredit lost control The Group over control joint exercises it that period. the assessed The during Group (AFC) Corporation Africa Finance by InfraCredit 50%. of interest its retained through company investee the below: shown as is position financial venture’s joint of the The share Authority's NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Infrastructure Limited (InfraCredit) Credit Guarantee Company

130 25.10.2 25.10.1 This is a company jointly owned with Africa Finance Corporation (AFC). The company provides local currency guarantees to enhance enhance to local guarantees currency provides The company (AFC). Corporation Africa Finance owned with jointly company a is This its with eligibility conform that creditworthy Nigeria infrastructure in assets finance to issued instruments quality of debt credit the Investment Sovereign Nigeria of the owned subsidiary a fully was The company 2016. in incorporated was The company criteria. in investment additional to due Authority the lost control 2018, December on 19 However, 2018. December 19 Authority until an to InfraCredit in investment the diluted now has AFC by investment This (AFC). Corporation Africa Finance by InfraCredit joint venture’. in ‘investment 25.10 The company has acquired farm assets from Novum Agric Industries in pursuit of its objectives. pursuit in Industries Agric Novum farm from assets acquired has The company Company (Mauritius) Limited. The company has been established to sell, purchase, import, export, take or let or hire or lease, repair, repair, import, export, or lease, purchase, or hire or let take sell, to been established has The company Limited. (Mauritius) Company processing, raising, growing, developing, for used accessories, tools, implements, equipment, machinery, in deal improve, alter, harvesting, procurement, production, of farming, carry products. also can It of agricultural businesses kinds on the of all packaging forms. their all in horticulture and agriculture marketing pooling, grading,

Notes to theConsolidated andSeparate Statements Financial (continued) Summarised statement of comprehensive income of comprehensive Summarised statement Summarisedinformation financial associates of of the opinion the in which, 2018, December 31 at as Group of the associates of the information financial the is out below Set Group. the to material are directors, Fair value of retained interest in joint venture interest value of retained Fair profit of associate’s Share income other comprehensive from of profit/(loss) Share results unrecognised of accumulated Share Carrying amount as at 31 December 2018 Balance at start of the year Net write back of financial assets Interest expense Interest Other income and amortisationDepreciation expenses Personnel Operating expenses tax before Profit Income tax year for the Profit/(loss) Other income comprehensive income comprehensive Total Interest income Interest Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – – – – – – 133 ’000 ’000 2017 2017 LUTH 500 500 500 (500) ₦ ₦ Limited UFF-NAIC Agriculture Investment 31 December 31 31 December 31 Company (Mauritius)

– ’000 ’000 2018 2018 LUTH (306) ₦ ₦ Limited UFF-NAIC 12,687 (78,294) (99,545) (99,545) (99,545) (99,545) (62,422) Investment 599,862 228,682 Agriculture (355,309) (617,863) 166,260 166,260 (433,296) (433,602) (433,603) 1,337,749 31 December 31 31 December 31 (1,165,869) Company (Mauritius)

– – – – – – – – – – – – – – ’000 ’000 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL ₦ ₦ Limited (6,938) UFF-NAIC (6,938) (6,938) (6,938) InfraCredit Agriculture Management 31 December 31 31 December 31 Company (Mauritius) (Mauritius) Company

– – – – – – – – – – – ’000 ’000 2018 2018 ₦ ₦ (617) (617) (617) Limited (7,923) UFF-NAIC 27,782 InfraCredit (20,476) Agriculture Management 8,832,679 8,832,679 31 December 31 31 December 31 17,665,357 Company (Mauritius) (Mauritius) Company Investments accounted for using accounted theInvestments equity method continued Loss attributable to: to: attributable Loss Parent Non-controlling interest Operating expenses tax before Profit Income tax period the for Loss Other income comprehensive loss comprehensive Total Other income Interest income Interest Project related cost related Project InfraCredit was a subsidiary in the past financial year, thus there are no comparative numbers. no comparative are there thus year, past the financial in a subsidiary was InfraCredit Difference Difference Net assets of associate/joint venture venture Net assets of associate/joint income of comprehensive Summarised statement Group share of net assets share Group Carrying value of associate of losses not recognised Share 25. LUTH: and InfraCredit in carrying the of its interest to amount presented information financial summarised of the Reconciliation Non-controlling interest Non-controlling interest Total comprehensive income attributable to: to: attributable income comprehensive Total Parent

– – – – – – – – – – – – – – – – ’000 ’000 2017 2017 LUTH LUTH 500 500 500 (500) ₦ ₦ 1,000 1,000 1,000 1,000 31 December 31 31 December 31

– – – – – – – – – – – – ’000 ’000 2018 2018 LUTH LUTH 350 350 350 ₦ ₦ 1,000 1,000 (99,545) (100,545) 1,776,165 1,675,620 31 December 31 31 December 31 1,776,165 1,676,620 1,676,620

– – – ’000 ’000 2017 2017 ₦ ₦ 9,005 1,138 (9,698) (6,593) 50,417 InfraCredit InfraCredit 239,854 991,595 398,599 140,772 (676,789) (522,143) (402,809) (402,809) 8,022,905 8,964,409 1,181,037 2,184,593 31 December 31 31 December 31 2,184,593 8,501,362 10,685,955 10,685,955

– ’000 ’000 2018 2018 ₦ ₦ 2,133 79,130 34,226 InfraCredit InfraCredit (78,079) (47,436) 340,000 524,155 933,958 122,378 (682,398) (363,643) 169,598 169,598 1,983,190 1,756,389 31 December 31 31 December 31 12,813,690 16,045,810 17,413,426 13,763,541 14,570,079 32,235,436 17,665,357 32,235,436 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

132 Summarised statement of comprehensive income income of comprehensive Summarised statement Summarisedinformation financial ventures of joint of the opinion the in which, 2018, December 31 at as Group of the ventures joint of the information financial the is out below Set Group. the to material are directors,

Notes to theConsolidated andSeparate Statements Financial (continued) Net foreign exchange gain/loss gain/loss exchange Net foreign income fee Guarantee Other income expense fee Guarantee Impairment loss on financial assets Operating expenses year for the Profit/(loss) income comprehensive Total Summarised statement of financial position Summarised statement Interest and investment income and investment Interest Capital and reserves and reserves Capital Ordinary capital share Total liabilities Total Debt capital capital shares Preference value reserves Fair Investment securitiesInvestment Other assets Intangible assets assets Total Other liabilities Retained earnings equity Total Cash and cash equivalents Cash Property and equipment liabilities and equity Total Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

135 ’000 Total Group ₦ 64,079 57,818 (24,816) 183,575 257,149 321,228 321,228 354,230 (169,036) 1,626,239 1,971,246 1,617,016 16,444,213 16,627,788 16,627,788 (16,113,745) 16,306,560

– – – – – – – – – ’000 Group ₦ 1,343,974 1,343,974 construction Assets under under Assets 1,343,974 16,113,745 16,113,745 16,113,745 (16,113,745) 16,113,745

– ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 295 267 587 Group Office ₦ 1,776 2,071 1,018 3,982 5,000 5,000 1,484 (4,680) 20,113 21,889 21,889 (20,113) 16,889 equipment

– ’000 Group ₦ (2,611) 69,061 37,048 94,655 17,468 24,313 (54,972) 41,500 81,126 Computer 124,188 193,249 193,249 175,325 112,123 112,123 133,825 equipment

– ’000 Group Motor ₦ vehicles (4,526) 55,000 19,869 24,068 (55,000) 55,849 127,523 182,523 182,523 207,322 334,845 106,805 126,674 126,674 146,216 188,629

– ’000 Group ₦ 9,170 76,981 39,401 37,600 54,671 22,760 77,431 77,431 73,602 Furniture (38,951) (12,999) 41,429 38,951 116,382 116,382 115,031 and fittingsand Property and equipment 26. Cost 1 January at As 2017 Additions As at 31 December 2017 31 December at As As at 1 January at As 2018 Additions Loss of control in subsidiary* of control Loss Transfer of asset** Transfer As at 31 December 2018 31 December at As Accumulated depreciation depreciation Accumulated at 1 JanuaryAs 2017 Charge for the year the year for Charge As at 31 December 2017 31 December at As As at 1 January at As 2018 Loss of control in subsidiary* of control Loss Charge for the year the year for Charge As at 31 December 2018 31 December at As As at 31 December 2018 31 December at As As at 31 December 2017 31 December at As

– – – – – – – – – – – – – – – – – – ’000 ’000 2017 2017 ₦ ₦ Limited Limited UFF-NAIC UFF-NAIC Agriculture Agriculture Investment Investment 31 December 31 31 December 31 Company (Mauritius) Company (Mauritius)

– – ’000 ’000 2018 2018 ₦ ₦ Limited Limited 1,122 UFF-NAIC UFF-NAIC Agriculture Agriculture Investment Investment 126,356 991,346 146,250 282,908 619,120 (447,884) 991,346 4,063,131 3,685,793 3,741,603 1,870,802 1,870,802 31 December 31 31 December 31 4,734,071 3,742,725 4,734,071 Company (Mauritius) Company (Mauritius)

– – – – – – – – – 20 ’000 ’000 2017 2017 306 ₦ ₦ Limited Limited 5,738 5,739 5,738 (7,340) UFF-NAIC UFF-NAIC 12,753 (7,014) 12,753 Agriculture Agriculture Management Management 31 December 31 31 December 31 Company (Mauritius) Company (Mauritius) (Mauritius) Company

– – – – – 83 ’000 ’000 (16) 2018 2018 ₦ ₦ Limited Limited 4,033 2,017 2,017 4,033 (7,957) UFF-NAIC UFF-NAIC 12,006 31,118 35,068 35,151 31,118 35,151 Agriculture Agriculture Management Management 31 December 31 31 December 31 Company (Mauritius) (Mauritius) Company Company (Mauritius) (Mauritius) Company NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

134

Summarised statement of financial position Summarised statement

Notes to theConsolidated andSeparate Statements Financial (continued) Capital and reserves Capital capital Share Retained earnings Currency translation reserves Non-controlling interest equity Total equity liabilities and Total Other liabilities liabilities Total Investment securitiesInvestment Other assets Property and equipment assets Total Summarised statement of financial position Summarised statement Cash and cash equivalents and cash equivalents Cash Group share of net assets share Group Carrying value of associate Difference of losses not recognised Share Net assets of associate/joint venture venture Net assets of associate/joint Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – 137 63 63 ’000 ’000 2017 2018 558 ₦ ₦ Authority Authority 23,882 24,503 24,440 24,503 12,893 Software Software 24,503 24,440 37,396 24,503 12,893 31 December 31 31 December 31

63 ’000 ’000 2017 2018 720 Group Group ₦ ₦ 1,300 1,201 (1,138) 23,882 24,503 24,602 25,803 12,893 Software Software 25,803 24,602 37,558 24,665 12,893 31 December 31 31 December 31 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Intangible assets Balance at 31 December 2017 Amortisation Balance at 1 January 2017 the year for Charge Balance at 31 December 2017 Carrying amount Balance at 31 December 2017 Cost Balance at 1 January 2017 Additions Balance at 31 December 2018 Amortisation Balance at 1 January 2018 the year for Charge Balance at 31 December 2018 Carrying amount Balance at 31 December 2018 Cost Balance at 1 January 2018 Additions in subsidiary of control Loss 27.

’000 Total ₦ Authority 23,087 40,888 57,818 48,503 308,137 331,224 331,224 282,265 613,489 241,833 282,721 282,721 340,539 272,950

- ’000 295 302 267 484 456 Office ₦ 1,776 1,776 1,776 2,071 1,018 1,320 1,320 1,587 Authority equipment

’000 ₦ 9,714 Authority 22,637 37,048 94,655 24,313 46,644 33,909 Computer 115,641 138,278 138,278 175,326 104,369 104,369 128,682 equipment

- ’000 Motor ₦ vehicles 6,835 Authority 91,489 15,415 24,068 113,739 113,739 113,739 207,322 321,061 106,904 106,904 130,972 190,089

’000 450 ₦ 9,170 7,303 Authority 76,981 77,431 77,431 37,600 54,671 15,457 70,128 70,128 79,298 Furniture 35,733 115,031 and fittingsand NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

During the year, Infrastructure Credit Guarantee Company Limited changed from a subsidiary to an associate due to the loss of loss the to due associate an to a subsidiary from changed Limited Company Guarantee Infrastructure Credit year, the During part as Group’s of the recognised being ceased of InfraCredit liabilities and assets the Consequently, Authority. the by control equity the method. using for accounted now but are assets other to reclassified were (NMIC) Company Investment Motorways NSIA by held construction under assets the year, the During Government Federal the of on behalf incurred cost as assets other under shown are assets the for disclosures Additional assets. Bridge. Niger respect in 2nd of the of Nigeria 136

* ** 

Notes to theConsolidated andSeparate Statements Financial (continued) Cost 1 January at As 2017 Additions As at 31 December 2017 31 December at As As at 1 January at As 2018 Additions As at 31 December 2018 31 December at As Accumulated depreciation depreciation Accumulated at 1 JanuaryAs 2017 Charge for the year the year for Charge As at 31 December 2017 31 December at As As at 1 January at As 2018 Charge for the year the year for Charge As at 31 December 2018 31 December at As Carrying amount 2018 31 December at As As at 31 December 2017 31 December at As Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – 139 ’000 ’000 ’000 ’000 2017 2017 2017 2017 ₦ ₦ ₦ ₦ Authority Authority Authority Authority 40 billion 40billion 31 December 31 31 December 31 31 December 31 31 December 31 76,287,500 43,497,310 204,375,000 280,662,500 170,859,498 495,019,308 280,662,500

– – – – – – – – ’000 ’000 ’000 ’000 2018 2018 2018 2018 ₦ ₦ ₦ ₦ Authority Authority Authority Authority 2,245,070 31 December 31 31 December 31 31 December 31 31 December 31 280,662,500 280,662,500 253,690,496 536,598,066 280,662,500

1.46 billion) is shown in Note 28. 28. Note in shown is billion) 1.46 ’000 ’000 ’000 ’000 35 billion at the end of the reporting the of end the at billion 35 2017 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group Group Group Group ₦ ₦ ₦ ₦ 4,730 355,807 6,801,726 3,178,824 3,534,631 31 December 31 31 December 31 31 December 31 31 December 31 3,534,631 3,534,631 76,287,500 43,190,981 204,375,000 280,662,500 170,402,086 501,062,023 280,662,500

– ’000 ’000 ’000 ’000 2018 2018 2018 2018 Group Group Group Group ₦ ₦ ₦ ₦ 5,823 8.95 billion (2017: (2017: billion 8.95 1,786,620 4,382,101 3,219,661 31 December 31 31 December 31 31 December 31 31 December 31 22,833,012 26,052,673 280,662,500 280,662,500 256,550,342 26,052,673 26,052,673 543,387,386 280,662,500 (29.1) 1.769 billion. This is shown in Note 17. Note in shown is This billion. 1.769 was approved by the Central Bank of Nigeria, however, the company has drawn down down drawn has company the however, Nigeria, of Bank Central the by approved was The amount borrowed was provided by the Central Bank of Nigeria to NAIC-NPK (a subsidiary of the Group) to finance the finance to Group) of the subsidiary (a NAIC-NPK to of Nigeria Bank Central the by provided was borrowed The amount of amount total A stop-gap provided financing. Authority the initially which for Initiative Fertilizer Presidential period. The tenor of the loan is six years and interest rate is at a below market rate of 5%. This borrowing will be repaid from be repaid will borrowing This of 5%. rate market a below at is rate interest and years six is period. loan of the The tenor of element income The sale. deferred of fertiliser proceeds the The income recognised during the year was was year the during recognised The income Contribution by Government by Contribution Equity and reserves

Borrowings Opening balance during the year Additions Non-controlling interest 30.1 Contribution by Government Contribution by Retained earnings value reserve Fair currency translation reserve Foreign 30. Non-current Maturity analysis Current Financial liabilities at amortised cost Financial Real (RSSF) Sector Support Facility 29.1 29.

– – – – ’000 2017 ₦ Authority 125,030 7,884,464 1,698,057 4,152,936 1,908,441 31 December 31 7,884,464 7,884,464

– – – – ’000 2018 ₦ Authority 347,267 1,520,494 1,591,131 31 December 31 18,915,515 15,456,623 18,915,515 18,915,515

– ’000 2017 Group ₦ 503,255 397,772 1,693,701 1,911,529 6,676,418 1,465,369 31 December 31 27,592,224 18,331,582 29,285,925 29,285,925

– ’000 2018 Group ₦ 284,034 237,608 2.6 billion relating to this facility has been disclosed in the in facility been disclosed has this to relating billion 2.6 1,733,962 8,951,162 31 December 31 22,723,115 25,534,934 18,756,444 18,294,839 48,258,049 48,258,049 35 billion. An interest expense of interest An billion. 35 statement of comprehensive income for the year 2018. See Note 29.1 for additional details. additional for 29.1 See Note 2018. year the for income of comprehensive statement Deferred income on Real Sector Support Facility (RSSF) borrowing relates to the deferred income on the below the market market the below the on income deferred the to relates borrowing (RSSF) Sector Support Real on Facility income Deferred Federal the for secured The were Africa loans Plc. for Bank United and Plc of Nigeria Bank Union from obtained loan rate Sector Support Real of Nigeria's Bank Central the under scheme Initiative Fertiliser Presidential of Nigeria’s Government amortised on subsequently and date grant on the initially recognised was grant The of the value fair scheme. (RSSF) Facility reporting the at as grant the to relating conditions no unfulfilled were There loan. of the tenor the over basis line a straight is date to grant The total date. This represents the total amount received from the Federal Government of Nigeria in respect in of the construction the of of Nigeria Government Federal the from received amount total the represents This and assets other in been included has date to expenses of incurred amount project. The of Nigeria Bridge total Niger 2nd cash portion in included is unspent the while Bridge, Niger respect in 2nd of the of FGN on behalf incurred cost as shown and bank balances. NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Other liabilities

138

28.

Notes to theConsolidated andSeparate Statements Financial (continued) Non-current 28.2 28.1 Maturity analysis: Current Financial liability: Financial payables Trade payable Intercompany Other payables of Nigeria Government the Federal to Payables of the 2nd Nigerin respect Bridge (28.1) Deferred income on RSSF borrowing (28.2) income on RSSF borrowing Deferred Non financial liability: Accruals Tax liabilities Tax Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – 141 ’000 ’000 ’000 ’000 2017 2017 ₦ ₦ ₦ ₦ (6,593) (9,698) 50,417 369,219 169,597 538,816 239,854 (676,789) (402,809) (402,809) (402,809) 8,501,360 2,184,593 9,014,500 9,014,500 31 December 31 31 December 31 (8,645,281) (9,014,500) 10,685,953 10,685,953

’000 ’000 2018 2018 ₦ ₦ 76,528 33,101 (45,877) (75,512) 506,922 328,822 (654,355) 169,629 169,629 169,629 8,645,281 31 December 31 31 December 31 23,215,360 14,570,079 23,215,360 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 991.5 million from Africa Finance Corporation (AFC), as additional additional as (AFC), Corporation Africa Finance from million 991.5 Calculation of Group gain on deemed disposal gain on deemed disposalCalculation of Authority/company Discontinued operations

31.1 31.2 Equity retained value of 50% interest Fair Less: Net asset de-recognised Gain on deemed disposal for the period Profit discontinued operations from Profit retained value of 50% interest Fair deemed disposed of investment Cost gain/loss Remeasurement Total assets Total liabilities Total Impairment loss on financial assets Operating expenses tax before Profit Interest and investment income and investment Interest gain/(loss) exchange Net foreign income fee Guarantee Other income expense fee Guarantee for the period Profit/(loss) income comprehensive Total follows: as is of disposal date the at disposed subsidiary the for assets The net of the value of financial position Summarised statement 31. and million $21.98 received InfraCredit year, financial the During Summarised statement of comprehensive income of comprehensive Summarised statement investment in the company. This amount represents AFC’s investment in the company. The company recognised this investment in investment this recognised The company company. the in investment AFC’s represents amount This company. the in investment company the in of control loss also and of ownership dilution led to investment The additional year. of the end the at as capital share reporting the Authority date. at as Investment Sovereign Nigeria the by as is group or disposal of assets re-measurement the in recognised result the and operations of discontinued result of the Analysis shown below: follows: as is of disposal date the period the at for as Profit

– – – – – – 13 ’000 ’000 ’000 ’000 2017 2017 2017 2017 536 Group Group (442) ₦ ₦ ₦ ₦ 4,623 4,730 Authority Authority 7,435,016 7,958,502 31 December 31 31 December 31 31 December 31 31 December 31 (1,156,776) 6,801,726 23,686,882 36,062,294 147,172,616 43,497,310 170,859,498

– – – ’000 ’000 ’000 ’000 2018 2018 2018 2018 893 Group Group (846) ₦ ₦ ₦ ₦ 4,730 1,046 5,823 Authority Authority (249,094) (208,617) 6,801,726 31 December 31 31 December 31 31 December 31 31 December 31 (2,419,625) 2,245,070 4,382,101 42,036,469 41,043,623 43,497,310 (41,043,623) 170,859,498 253,690,496

– – – – – ’000 ’000 2017 2017 Group Group ₦ ₦ 60,049 6,469,790 31 December 31 31 December 31 22,556,738 36,661,142 147,845,348 43,190,981 170,402,086

– – ’000 ’000 2018 2018 Group Group ₦ ₦ 59,960 192,144 31 December 31 31 December 31 (2,011,745) 1,786,620 46,503,536 41,656,465 43,190,981 (41,656,465) 170,402,086 256,550,342

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Retained earnings Fair value reserveFair Foreign currency reserve translation Non-controlling interest (NCI)

140

30.2

Notes to theConsolidated andSeparate Statements Financial (continued) Adjustment to opening balance as a result of IFRS 9 adoption as a result opening balance to Adjustment year for the Profit reserves fair value of adoption of IFRS 9 result Reclassification from as a The fair value reserve includes the net cumulative change in the fair value of equity instruments. The amounts are never transferred transferred never of equity are value The fair the in instruments. amounts change cumulative net the The reserve includes value fair of available-for-sale value fair the to relate figures 2017 derecognised. are investments the when 9 even IFRS under or loss profit to 9. of IFRS adoption the reserves before in warehoused investments 30.3 Opening balance The currency translation reserve includes the net cumulative change in the foreign gains or (losses) arising from translation of the translation from arising or (losses) gains foreign the in change cumulative net the reserveincludes Thecurrency translation The amounts currency. presentation Group’s the functional as currency into Dollars US with of subsidiaries statements financial taxes. income from exempted are companies the as amounts gross the are income comprehensive other within presented 30.4 Opening balance Change/adjustment in value of available-for-sale financial assets Change/adjustment in value of available-for-sale Change in value of financial assets measured at FVOCI Change in value of financial assets measured financial assets available-for-sale of change in value of Share (Associates) at FVOCI assets measured of change in value of financial Share (Associates) of IFRS 9 result of adoption retained earnings as a to Reclassification 30.5 Opening balance Exchange differences arisingyear during the differences Exchange Opening balance Profit attributableto NCI Profit value reserve Fair Currency translation differences Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – 143 ’000 ’000 2017 600 600 500 400 Group ₦ ₦ 38,326 37,500 88,828 534,870 349,075 1,224,000 4,773,587 1,211,723 31 December 31 1,338,051 31,191,723 38,113,681 31 December 2017 December 31

– ’000 ’000 2018 800 Group ₦ ₦ 53,566 604,224 573,504 221,542 561,455 271,278 100,000 1,743,385 4,586,172 2,656,186 3,983,208 1,179,559 31 December 31 1,333,125 15,144,678 30,346,432 31 December 2018 December 31 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Type of interest Sub-subsidiary Sub-subsidiary Sub-subsidiary Related parties continued KG Brussels L.P. KG NSIA Motorways Company Investments NSIA Property Investment Co. Limited NSIA Property Co. Investment Limited Co. Investment NSIA Power Limited Development Co. and Investment NSIA Healthcare Limited Equity Co. FGF Private E. Beta Limited FGF P. Limited FGF Investment Company Investment NSIA Agriculture Limited Company Infrastructure Guarantee Credit FMCU Advanced Medical Diagnostics Limited Medical Diagnostics Advanced FMCU AKTH Limited Medical Diagnostics Advanced NAIC-NPK Limited Executive compensation Executive and other benefits fees Non-executive directors’ Defined contribution plan Balances with subsidiaries reporting the date: at as subsidiaries underlisted the from receivables The following the Authority has 33. management Compensation of personnel key parties for be related to considered also are them, with connected persons and personnel, management The key Authority’s entity over any personnel and of key membersof family close includes management purposes. of key The definition disclosure Authority the during in shares hold any The Authority not of the did Board members of the control. exercise management key which below: shown services is employee for management key to or payable paid period. of the end the The at compensation or as Directors’ remuneration and expenses:

– ’000 ’000 0% 2017 2017 Group ₦ ₦ Authority (660,836) 7,884,461 8,545,297 31 December 31 31 December 31 18,331,582 495,019,308 495,019,308

’000 ’000 2018 2018 Group ₦ ₦ (8)% Authority 31 December 31 31 December 31 18,294,839 18,915,515 61,777,335 (42,861,820) 536,598,066 536,598,066 16,113,745

’000 2% 2017 Group ₦ 31 December 31 32,820,556 22,336,959 10,483,597 501,062,024 501,062,024

’000 0% 2018 Group ₦ 31 December 31 (1,843,568) 74,310,722 76,154,290 543,387,386 543,387,386 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Related parties Capital management

142 The following are the balances with the Federal Government of Nigeria during the year: the during of Nigeria Government Federal the with balances the are The following UFF-NAIC Management Company (Mauritius) Limited, UFF-NAIC Agriculture Investment Company (Mauritius) Limited, Panda Panda Limited, (Mauritius) Company Investment Agriculture UFF-NAIC Limited, (Mauritius) Company Management UFF-NAIC Agricultural Properties Panda Agricultural Management Properties Ltd, Limited, LUTH Advanced Medical Management (Mauritius) are and entities other by controlled jointly are (InfraCredit) Limited Company Guarantee Infrastructure and Credit Services Ltd therefore also related parties. NMRC, FHFL, Panda Agricultural Properties Management (Mauritius) Limited and Pandagric Novum Limited are associates of the associates are Limited Novum Pandagric and Limited (Mauritius) Properties Management Agricultural Panda FHFL, NMRC, Authority. As disclosed in the investment in subsidiaries, associates and joint venture notes, FMCU Advanced Medical Diagnostics Ltd, AKTH Ltd, Medical Diagnostics Advanced FMCU notes, venture joint and associates subsidiaries, in investment the in As disclosed Abuja-Kano Expressway Limited, Company Development Expressway Lagos-Ibadan Limited, Medical Diagnostics Advanced Development Hydropower Mambilla and Limited Company Development Expressway East-West Limited, Company Development standards. applicable the with parties accordance in related Authority of the are and sub-subsidiaries are Limited Company 33. the over influence party significant other the if one party or exercise be control related ability the to to has considered Parties are Group. of the parent ultimate the is NSIA decisions. party or operational other financial making in The Group’s adjusted net debt to equity ratio at 31 December 2018 was as follows: follows: as was 2018 December 31 equity at to ratio debt net adjusted The Group’s The Group monitors capital using a ratio of adjusted net debt to adjusted equity. For this purpose, adjusted net debt is defined as is debt net adjusted purpose, this For equity. adjusted to debt net of adjusted a ratio using capital monitors The Group equity Adjusted equivalents. cash and cash less obligations, other and counterparties to payables comprising liabilities, total of equity. components all comprises The Group is to maintain a strong capital base in order to retain the confidence of the Nigerian people and the market with a bid to to bid a with people market the and Nigerian of the confidence the retain to order in base capital strong a maintain to is TheGroup performance monthly reviewing by on capital return the monitors Management business. the for developments future sustain returns from investment managers. 32.

Notes to theConsolidated andSeparate Statements Financial (continued) Net surplus to adjusted equity adjusted ratio Net surplus to Adjusted equity Adjusted Payables to Federal Government in respect of the 2nd Niger of in respect Government Bridge Federal to Payables Total equity Total of Nigeria Government of the 2nd Niger respect in on behalf of the Federal Bridge incurred Cost Total liabilities Total Less: cash and cash equivalents Less: Net surplus Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 145 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL

Other contracts The Stabilisation Fund GenerationsThe Fund Future JHL Capital Group LLP Management Capital Mountain Blue Offshore Arbiter Ltd CapitalAQR Management CNPG Ltd, (Cayman) Fund Realisation Value The Canyon Palestra Capital Brasidas Asia Fund Global Macro Alpstone Offshore Ltd Advisors Holocene Fund

34. managers investment various by managed Authority the were by established funds separate activities three of the The investment period. the during engaged 34.1 of the management the for Morgan JP its custodian global through managers investment The Authority following the engaged of period as are: end managers investment of the The details Fund. Stabilisation GlobalUBS Asset Management (UK) LTD service and Engagement reinvestment and investment the manage to delegate and its as agent Ltd GlobalAsset Management The Authority UBS engaged Global Asset Management UBS Morgan. JP Authority by the held and by time to time from deposited assets, and monies of certain on a monthly, portfolio and valuations performance transactions, account the of the Authority the reports with provides containing quarterly and annual basis. GrahamSmith & Co service and Engagement a fixed income under operates The Manager services of NSIA. on behalf management investment provides Graham Smith papers, agency papers, commercial treasuries, US in invest to authorised is Manager the mandate, the Under mandate. discretionary information periodic reports Authority the render including to to The required instruments. firm is corporate investment-grade and outlook. economic and summary, executive transactions, on holdings, + Management (IR+M) Research Income management investment provides firm that management investment fixed income independent, a privately-owned, is IR+M security careful selection that based belief active on the and are process and philosophy Their investment Authority. the services to US in services investments for management investment They provide long-term. the over results superior provide management risk sectors. municipal and governments, securitised, corporate, the opportunities across investment in securities fixed income 34.2 Hedge fund below: stated are end year at as invested is Fund Generations Future the The which in hedge fund managers — — — — — — — — —

– – – – – ’000 ’000 ’000 500 500 500 ₦ ₦ ₦ 1,000 1,000 1,000 3,000 1,000 1,000 1,000 1,000 3,000 1,000 1,000 1,000 1,554 1,554 74,452 4,072,376 Gross amount Gross 4,152,936 31 December 2017 December 31 2017 December 31

’000 ’000 ₦ ₦ 1,000 1,000 1,000 1,000 1,000 1,000 payment 75,452 20,200 Nature of 245,324 Audit fees Audit fees Audit fees Audit Audit fees Audit fees Audit fees Audit fees Audit fees Audit fees Audit fees Audit fees Audit 1,775,665 1,489,479 2,020,989 1,591,131 Review fees 31 December 2018 December 31 2018 December 31

Type of of NSIA of NSIA relationship Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Type of interest Type of interests Joint venture Joint venture Joint venture Sub-subsidiary Sub-subsidiary Sub-subsidiary NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Expense recognised during the period in respect of bad or doubtful debts due from related parties. period the respect in of bad during or doubtful related from Expense due debts recognised Provisions for doubtful debts related to the amount of outstanding balances. of outstanding balances. amount the to doubtful for related debts Provisions

144

The Authority has the following payables to the underlisted subsidiaries as at the reporting the date: at as subsidiaries underlisted the to payables The following the Authority has

Notes to theConsolidated andSeparate Statements Financial (continued) Infrastructure Credit Guarantee Company Limited Limited Company Infrastructure Guarantee Credit LUTH Advanced Medical Services Advanced Limited LUTH The Authority has the following payables to the underlisted associates and joint ventures as at the reporting the date: at as ventures joint and associates underlisted the to payables The following the Authority has NSIA Motorways Company Investments NSIA Property Investment Co. Limited Subsidiary Limited NSIA Property Co. Investment NSIA Healthcare Development and Investment Co. Limited Development Co. and Investment NSIA Healthcare FGF Private Equity Co. Limited Equity Co. FGF Private FGF P. E. Beta Limited FGF P. NAIC-NPK Limited Limited FGF Investment NSIA Agriculture Investment Company Company Investment NSIA Agriculture Limited Co. Investment NSIA Power — During the period, there were no related party transactions relating to the following: following: the party to no related relating transactions were period, the there During — NSIA Property Investment Company Ltd NSIA Property Company Investment NSIA Healthcare Development Investment Company Ltd Development Company Investment NSIA Healthcare Ltd Company Investment NSIA Agriculture NSIA Motorways Ltd Company Investment Ltd Company Investment NSIA Power Limited FGF Investments FGF PE Beta Limited Limited Equity Co. FGF Private Brussels KG Limited Medical Diagnostics Advanced FMCU AKTH Limited Medical Diagnostics Advanced Medical Services Advanced Limited LUTH Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– 147 ’000 ’000 ’000 2017 2017 2017 Group ₦ ₦ ₦ Authority Authority 25,030 40,598 11,599 14,041 49,756 87,607 599,511 193,833 190,781 350,427 703,906 1,424,902 1,071,732 1,058,018 2,339,435 1,256,408 2,360,802 2,241,754 1,458,484 1,483,209 31 December 31 31 December 31 31 December 31 4,059,817 1,058,018 16,961,833 12,902,016 11,843,998 Naira equivalentNaira Naira equivalentNaira Naira equivalentNaira

– ’000 ’000 ’000 2018 2018 2018 Group ₦ ₦ ₦ Authority Authority 47,450 43,225 12,350 14,950 52,975 93,275 638,300 206,375 203,125 373,100 749,450 1,575,600 1,806,025 1,029,481 1,159,275 2,766,075 2,605,850 1,622,725 2,490,800 1,579,175 31 December 31 31 December 31 31 December 31 5,066,750 1,029,481 19,069,581 14,002,831 12,973,350

– – 82 38 46 2017 2017 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 133 163 287 635 625 $’000 $’000 $’000 Group 4,668 1,964 3,511 1,148 3,267 4,116 7,734 7,664 7,344 4,778 4,859 2,306 3,267 Authority Authority 13,300 38,801 31 December 31 31 December 31 31 December 31

– – 38 46 2018 2018 2018 146 133 163 287 635 625 $’000 $’000 $’000 Group 2,935 4,848 1,964 5,557 1,148 3,567 8,511 8,018 4,993 7,664 4,859 2,306 2,935 Authority Authority 15,590 39,918 31 December 31 31 December 31 31 December 31 RMB WestPort Real Estate Development Fund II LP Development Real Fund Estate WestPort RMB LP Equity Fund Private Synergy Capital Verod Opportunities Aircraft Regional Fund Falko L.P. IV, Fund Investment Fortress L.P. V, Fund Investment Fortress L.P. V Coinvestment, Fund Investment Fortress L.P. OpportunityH.I.G. Bayside Fund, L.P. Marlin Equity, Marlin Equity II, L.P. L.P. VIIb, OCM Opportunities Fund Series Four Cerberus L.P. Institutional Partners, Total capital commitment Group Total Other Group members’ unfunded commitments with private equity fund managers are as follows: follows: as equity are private fund managers with commitments unfunded members’ Other Group Capital commitments – US$: Total capital commitments Authority’s Total Xenon Private Equity Private Xenon Abraaj Growth Markets Health Fund L.P. MarketsAbraaj Growth Health Fund Actis Africa Real Estate Total HealthCare Royalty (HCRP) Partners HealthCare Partners Z Capital IV’‘CAPE Equity Fund Alliance Private Capital in Nigeria (FAFIN) Finance Agricultural for Fund Helios Investors Alliance Africa Capital Capital commitments – Euro: Commitments 35. Capital commitments (a) follows: as equity are private fund managers with The commitments unfunded Authority’s Capital commitments – US$: NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

The Nigeria Infrastructure Fund

Nigeria Infrastructure Debt (NIDF) Fund Fund for Agricultural Finance in Nigeria (FAFIN) Nigeria in Finance Agricultural for Fund Reverence CapitalReverence Fund Akina Euro Choice Choice Euro Akina Abraaj Growth Markets Health Fund L.P. Fund Health Growth Markets Abraaj Actis Capital Africa Capital Alliance Helios Investment Partners FGF Xenon Private Equity Private Xenon FGF Healthcare Royalty Partners Z Capital Partners RWC Prince Street Offshore Street Prince Prince Street Opportunities Ltd Street Prince Prince Street Institutional Ltd Institutional Street Prince Chieftain Capital Goldman Sachs Marathon Asset Management LLP Somerset Capital Management LLP Edgbaston Investment Partners Cevian CapitalCevian UK LLP

The investment management fees paid to the investment fund managers, global and local custodians have been disclosed on the been disclosed have local and custodians global fund managers, investment the to paid fees management The investment statement. income Engagement and service and Engagement custody provide to (local custodian) Limited Bank IBTC Stanbic and custodian) (global & Co Chase The Authority Morgan JP engaged provide The custodians Authority. the by managed capital services to compliance performance and accounting, as services, well as basis. on a monthly it by reports custodied Authority the performance capital on the of the to 34.4 Custodians — — Private equity partners Private below: stated period are end at as invested Infrastructure the Fund which in equityThe investments private fund and 34.3 — — 146 — — — — — — Private equity partners Private below: stated are end year at as invested is Fund Generations equity Future the The which private fund in — — — — — — — — — — Long only equity only managersLong below: stated are and year at as invested is Fund Generations Future the The which equity long only in managers —

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 149 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 8.6 billion in March 2019 to the Group's subsidiary NAIC-NPK Limited. This represents funds to cover the cost cost the cover to funds represents This Limited. NAIC-NPK subsidiary Group's the to 2019 March in 8.6billion 5,000 per bag. This income has been recognised on the separate financial statements of the Company and Company of the statements financial separate on the been recognised has 5,000 per income bag. This Events afterEvents the reporting period IFRS 9 adoption 9 IFRS

differential of the Company for the financial years ended 31 December 2017 and 31 December 2018. This is to augment the cost cost the augment to is This 2018. December 31 and 2017 December ended 31 years financial the for Company of the differential ex-factory the that ensure would it as Initiative Fertiliser Presidential the under production the of fertilisers in Company by incurred at remains price selling 37. of two Executive appointment the confirmed Buhari, Muhammadu President of Nigeria, Republic Federal of the The President a second for Director Executive Ojekwe-Onyejeli, announced who was Mrs Stella were Those confirmed Authority. the for Directors March on 13 Director Executive announced who was Umar-Sadiq, Aminu Mr and October 2017 effective 17 2019, March on 13 term February 2019. effective 21 2019, of Nigeria Republic Federal of the President the programme, (PFI) Initiative Fertiliser Presidential of the sustainability ensure to order In of release the approved the Group. the statements. financial the in disclosures and impact an had amounts on the that no events were there above, the Other than 38. The Group has adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1 January 2018, which resulted in changes changes in resulted which of 1 January 2018, of transition a date with 2014 July in IASB the by issued 9 as IFRS adopted has The Group early not did The Group statements. financial the in recognised previously amounts the to adjustments and policies accounting in periods. previous 9 in of IFRS any adopt the to adjustments Any figures. comparative restate elected to not Group the 9, of IFRS provisions As permitted transitional the by and earnings retained opening the in recognised were of transition date the at liabilities and assets carrying of financial amounts have 7 disclosures IFRS to amendments consequential the disclosures, notes for period. Consequently, current reserves of the other prior the in made disclosures those repeat disclosures period notes period. The comparative current the been only to applied also year. financial of measurement and classification recognition, for policies accounting our in changes in resulted has 9 TheIFRS of adoption financial with dealing standards other amends significantly 9 also assets. IFRS of financial impairment and liabilities financial and assets Disclosures’. Instruments: 7 ‘Financial IFRS as such instruments 9 specific of the IFRS details Further Group. 9 on the impact of IFRS the adoption of the to relating disclosures are out below Set comparative the in applied policies accounting 39 IAS previous the as well period (as current the in applied policies accounting 4.7. Note in detail more described in period) are 1.02 billion (2017: US$52.1 US$52.1 (2017: billion 1.02 18 billion and Euro 2.9 million/ 2.9 Euro and billion 18 1.05 billion). The Group’s commitment obligations, being capital calls, are set out in the out in set are calls, capital being obligations, commitment The Group’s billion). 1.05 8 billion, which represents 20% of the shareholding of the DBN. The Ministry of Finance has mandated the Authority the mandated has The DBN. of the Ministry of Finance shareholding of the 20% represents which 8 billion, 15.9 billion and Euro 3.2 million/ Euro and billion 15.9 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Other fiduciary activities

The Authority holds shares in Development Bank of Nigeria (DBN) in trust for the Federal Government of Nigeria (FGN). The shares The shares (FGN). of Nigeria Government Federal the for trust in (DBN) of Nigeria Bank Development in The shares Authority holds at valued are The Authority provides investment management and custody services to the Debt Management Office (DMO) and Nigerian Bulk Bulk Nigerian Office and Management Debt (DMO) the services to custody and management investment The Authority provides a wide to relation in sale decisions and purchase Authority the allocation, making (NBET) Plc. Electricity involve which Company in a fiduciary included in capacity held not are are that income Those and assets investments. and instruments financial of range these to mainly relate which The commissions and fees Authority. of the assets not are they as statements financial these of statement the in income other fiduciary under activity other and transactions recognised are fees management investment performed. are services provided being related the as income comprehensive Office Management Debt (‘DMO’) the from and received funds’) (‘the were million US$350 and million of US$200 The sums Agreement’). (‘the Agreement Management (‘NBET’) Plc. Electricity Investment an Bulk under respectively Company Nigerian related other and power gas, in funds the invest Authority the to for provides actsThe funds. the of agreement a manager as NSIA has of return share been customers’ the and met have Authority the after milestones certain to payable is projects. Consideration Lagos/ and Project Bridge Niger fund2nd the to order fund in DMO the from withdrawn was million US$100 of beenA total paid. December 31 at as NBET funds for Managed The and of the value fair project authority million on the Government. expressway Federal of the Ibadan $120.95 2017: and million $390.45 NBET (2017: respectively for DMO and US$122.60 and US$NIL stood at 2018 December 2018. activities of 31 as Authority fiduciary the the from by been agreement accrued has income nil while DMO) the approved Buhari, Muhammadu President Nigeria, of Republic Federal of the President the year, financial the During Sovereign Nigeria the be by managed to is which (PIDF), Fund InfrastructureDevelopment of a Presidential establishment The National country. the projects power and across road critical in specifically invested and Authority (NSIA), Investment Gas Liquefied Natural Nigeria the from NSIA to dollars million of $650 transfer initial the authorised (NEC) Council Economic risks the cost of project funding, eliminate to aims initiative This 2018. 17, May PIDF seed as for funding Account, Dividend (NLNG) Niger 2nd the as infrastructure – such assets critical nation’s of the development the plagued have that completion and variation few last the – over Hydroelectric Power Kano Road, Mambilla to Road, Abuja East-West Expressway, Ibadan Lagos to Bridge, funds of the management on the earned no income was There Authority. the by managed being currently decades. fund is This financial year. the during to guide DBN towards the achievement of its organisational goals. The Authority is expected to remit all dividends received from received dividends The all expected goals. Authority is remit to of its organisational achievement the towards DBN guide to of the of ownership change or otherwise transfer disposal, the before FGN the from consent prior obtain and days 30 within DBN year. current the in DBN by paid no dividends were There shares. a) The fiduciary Authority activities: performs following the 36. The Group leases its head office under non-cancellable operating lease agreements. The lease terms are between are years, five one and terms The lease agreements. lease office its operating head non-cancellable leases under TheGroup payments are payments These lease rate. market period at lease of the end the at renewable are agreements majority the and of lease be shown. to required are payments lease no minimum thus and advance in made (b) Operating lease commitments(b) lessee:Group – as company various underlying subscription documents. Whilst the actual timing of the capital calls to be made by the managers of these managers the be by made to calls capital the of actual the timing Whilst documents. subscription underlying various the recorded has opportunities,Group the investment suitable sourcing managers the on dependent is it as uncertain, is vehicles planning liquidity appropriate has The documents. legal Group underlying the with accordance in current being as commitments of capital. commitments future these cover to be available will of resources allocation a suitable ensure to place in million/ c) b) 148

As disclosed above, the Group has committed to provide capital to various collective investment vehicles. The total of these The total vehicles. investment collective various to capital provide to committed has Group the above, As disclosed million/ US$55.5 is date position of financial statement the at commitments

Notes to theConsolidated andSeparate Statements Financial (continued) Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – – – – – – – – – – – 151 ’000 2018 Group IFRS 9 ₦ amount Carrying 1 January1 7,446,869 46,219,145 76,154,290 280,210,174

– – – – – – – – – – – – – – – – ’000 Group IFRS 9 ₦ Changes 7,446,869 (7,446,869) 17,517,216 (17,517,216) 262,692,958 (141,325,574) (262,692,958)

– – – – – – – – – – – – – – – – – ’000 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group IAS 39 ₦ amount Carrying 31 December 31 46,219,145 17,517,216 76,154,290 148,772,443 262,692,958 IFRS 9 adoptionIFRS continued Reconciliation of statement of financial 9 to position balances39 IFRS fromIAS Closing balance Reclassification: From IAS 39 Available-for-sale IAS 39 From Reclassification: Investment securities – At FVOCI – At securities Investment Opening balance Reclassification: To IFRS 9 FVTPL Reclassification: Closing balance Reclassification: To IFRS 9 FVOCI Reclassification: Fair value through other comprehensive income (FVOCI) income other comprehensive through value Fair – Available-for-sale securities Investment Opening balance Closing balance Other assets Opening balance Closing balance Reclassification: From IAS 39 Loans and receivables Loans and IAS 39 From Reclassification: ECL allowance Remeasurement: Remeasurement: ECL allowance Remeasurement: Reclassification: From IAS 39 Held-to-maturityFrom Reclassification: Investment securities – At amortised securities – At cost Investment Opening balance Closing balance and receivables securities – Loans Investment Opening balance To IFRS 9 amortised cost Reclassification: Closing balance Reclassification: To IFRS 9 amortised cost Reclassification: Investment securities – Held-to-maturity Investment Opening balance Closing balance Remeasurement: ECL allowance Remeasurement: Amortised cost and cash equivalents Cash Opening balance 38. 38.2 flow cash of their analysis and assets financial managing for models of its performed business The Group analysis a detailed category in measurement previous their from assets, carrying the financial of amounts reconciles table Thecharacteristics. following 9 on 1 January 2018: IFRS to upon transition categories measurement new their to 39 IAS with accordance

’000 ’000 IFRS 9 IFRS 9 ₦ ₦ 869,908 869,908 7,446,869 6,837,800 46,219,145 72,280,954 17,517,216 17,341,779 76,154,290 61,777,335 141,325,574 124,751,130 262,692,958 254,513,055 Carrying amount Carrying amount

FVOCI FVTPL FVTPL FVOCI FVTPL FVTPL Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost IFRS 9 Measuring category IFRS 9 Measuring category Amortised cost Amortised cost

’000 ’000 IAS 39 IAS 39 ₦ ₦ 869,908 869,908 7,446,869 6,837,800 46,219,145 72,280,954 17,517,216 17,341,779 76,154,290 61,777,335 141,325,574 124,751,130 262,692,958 254,513,055 Carrying amount Carrying amount

FVTPL FVTPL FVOCI FVOCI FVOCI FVOCI Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost Amortised cost IAS 39 Measuring category IAS 39 Measuring category NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Classification and measurement of financialinstruments

Investment securities (At FVTPL) securitiesInvestment (At FVTPL) securitiesInvestment (At Investment securitiesInvestment (Available-for-sale) securitiesInvestment (Available-for-sale) securitiesInvestment (Available-for-sale) securitiesInvestment (Available-for-sale) Other and receivables) assets (Loans Other receivables) and assets (Loans Investment securities (Loans and receivables) securitiesInvestment (Loans and receivables) securitiesInvestment (Loans Investment securitiesInvestment (Held-to-maturity) securities Maturity)Investment (Held to 150 There were no changes to the classification and measurement of financial liabilities. All of the Group’s significant financial liabilities liabilities financial significant Group’s of the All liabilities. of financial measurement and classification the to no changes were There 39. IAS under case the was 9 as IFRS amortised under at cost be measured to continue Items in brackets are IAS 39 categories. 39 IAS are brackets in Items Parent Group The measurement category and the carrying amount of financial assets and liabilities in accordance with IAS 39 and IFRS 9 at 1 9 at IFRS and 39 IAS with accordance in liabilities and assets category carrying the of financial and amount The measurement follows: as compared are January 2018 Applying the requirements of IFRS 9 as stated above has led to changes in the classification of the Group’s financial assets as assets financial Group’s of the classification the in changes led to has above stated 9 as of IFRS requirements the Applying highlighted below. Overall, the IFRS 9 financial asset classification requirements are considered more principle based than under IAS 39. IAS under based than principle more considered are requirements classification asset financial 9 IFRS the Overall, Classification and measurement requirements of IFRS 9 requirements of IFRS and measurement Classification FVTPL receivables, and loans available-for-sale and held-to-maturity, of 39 IAS under assets financial for categories Theclassification amortised namely cost, reflect that categories measurement, 9 with the IFRS in replaced These are measurement. their determine contractual the on assets of financial FVTPL. and (FVOCI) classification the income 9 bases IFRS comprehensive other through value fair on classification the bases 39 IAS whereas asset, financial the managing model for business flow entity’s the and cash characteristics valued fair liabilities financial amortised and at cost liability financial the 9 maintains IFRS category. each for specific definitions 9. IFRS in contained as categories or loss profit through 38.1

Notes to theConsolidated andSeparate Statements Financial (continued) Financial assets Financial receivables) and and cash equivalents (Loans Cash Financial assets Financial and receivables) and cash equivalents (Loans Cash Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – 153 ’000 ’000 2018 Group IFRS 9 ₦ ₦ amount retained Carrying Authority 47,919 47,919 1 January1 Impact on 192,086 192,086 240,005 6,837,800 earnings/NCI 125,621,038

– – – – ’000 ’000 Group IFRS 9 ₦ ₦ Changes Authority 47,919 47,919 IFRS 9 loss 192,086 192,086 allowances 240,005 6,837,800 124,751,130

– – – – – – – – – – ’000 ’000 2017 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Group IAS 39 IAS 39 ₦ ₦ amount Carrying Authority 869,908 allowances 31 December 31 Reconciliation of impairment 9 IFRS balance to from allowance IAS 39 IFRS 9 adoptionIFRS continued Held-to-maturity (IAS 39)/ amortised at assets (IFRS 9) cost Financial securitiesInvestment Loans and receivables (IAS 39)/ and receivables Loans amortised at assets (IFRS 9) cost Financial securitiesInvestment Other assets Reclassification: To IFRS 9 FVTPL Reclassification: Closing balance Fair value through profit or loss (FVTPL) profit through value Fair FVTPL securities – At Investment Opening balance Closing balance Reclassification: From IAS 39 Available-for-sale IAS 39 From Reclassification: 38.3 loss incurred 39 IAS the with accordance in measured allowance impairment closing period’s prior the reconciles table The following 9 expected 1 January IFRS 2018. the model with at loss accordance in measured allowance impairment new the model to 38.

– – – – – – – – – – – – – – – – – – ’000 ’000 2018 2018 Group IFRS 9 IFRS 9 ₦ ₦ amount amount Carrying Carrying Authority 1 January1 1 January1 61,777,335 72,280,954 142,195,482 271,854,834

– – – – – – – – – – – – – – – – – ’000 ’000 Group IFRS 9 IFRS 9 ₦ ₦ Changes Changes Authority (6,837,800) 17,341,779 (17,341,779) 141,325,574 254,513,055 (254,513,055) (124,751,130)

– – – – – – – – – – – – – – – – – ’000 ’000 2017 2017 Group IAS 39 IAS 39 ₦ ₦ amount amount Carrying Carrying Authority 869,908 31 December 31 31 December 31 61,777,335 17,341,779 72,280,954 254,513,055 131,588,930

NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

152

Notes to theConsolidated andSeparate Statements Financial (continued) Reclassification: To IFRS 9 FVTPL Reclassification: Closing balance Reconciliation of statement of financial 9 to position balances39 IFRS fromIAS Fair value through profit or loss (FVTPL) profit through value Fair FVTPL securities – At Investment Opening balance Amortised cost and cash equivalents Cash Opening balance Closing balance Investment securities – Held-to-maturity Investment Opening balance Reclassification: To IFRS 9 amortised cost Reclassification: Closing balance and receivables securities – Loans Investment Opening balance To IFRS 9 amortised cost Reclassification: Closing balance amortised – At securities cost Investment Opening balance IAS 39 Held-to-maturityFrom Reclassification: ECL allowance Remeasurement: receivables Loans and IAS 39 From Reclassification: ECL allowance Remeasurement: Closing balance Other assets Opening balance Closing balance Fair value through other comprehensive income (FVOCI) income other comprehensive through value Fair – Available-for-sale securities Investment Opening balance Reclassification: To IFRS 9 FVOCI Reclassification: To IFRS 9 FVTPL Reclassification: Closing balance Investment securities – At FVOCI – At securities Investment Opening balance Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 155 time application application time - ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL up posted through retained earnings without restating restating without earnings retained posted through up - Impact December on comprehensive incomefor 2017 ended the year 31 Impact on financial position IFRS 15 adoption 15 IFRS identify contract; the contract; the in identify performance obligations transaction the price; determine and contract; the in performance obligations to transaction price allocate a performance obligation. entity the satisfies when revenue recognise

39. comparative numbers. revenue’ be ‘accrued known as commonly more might what describe liability’ to asset’ ‘contract and ‘contract terms the uses 15 IFRS of statement the in descriptions alternative using entity from an prohibit does not standard the however revenue’, ‘deferred and is income deferred The term balances. such describe to 15 IFRS in used terminology the adopted has The position. Group financial 15. of IFRS scope the within not are which balances grant respect in used government of the a quantitative had not has 15 of IFRS application the transactions, revenue Group’s the for disclosures more Apart providing from below: illustrated is date transition on the The standard the impact statements. of adopting impact financial on these 39.1 disclosures Qualitative income. of comprehensive statement Group’s the to 15 impact of IFRS of adoption no quantitative was There statements. financial been these in made have 39.2 have disclosures Qualitative position. of financial statement Group’s the to 15 impact of IFRS of adoption no quantitative was There been made in these financial statements. The Group has adopted IFRS 15 (as amended in April 2016) with effect from 1 January 2018. In addition to the more extensive extensive more the to addition In effect with 1 January 2018. from 2016) April amended in (as 15 IFRS adopted has The Group follows: as recognition revenue to a five‑step approach introduced standard the requirements, disclosure — — — — — permits first the for which approach modified the with retrospective accordance in 15 IFRS applied has The Group of the standard on a retrospective basis but with a cumulative catch a cumulative but with basis a retrospective on standard of the

– – – – – ’000 ’000 ’000 Group Parent ₦ ₦ ₦ 4,544 4,544 amount amount Effect of Effect of Effect of Effect of carrying carrying opening opening retained Authority 47,919 47,919 47,919 47,919 expected expected Impact on 192,086 192,086 244,549 192,086 192,086 244,549 240,005 earnings/NCI credit loss on credit loss on

– ’000 ’000 ’000 Group Parent ₦ ₦ ₦ amount amount Carrying Carrying Authority 47,919 47,919 per IFRS 9 per IFRS 9 IFRS 9 loss 192,086 869,908 192,086 869,908 allowances 240,005 17,293,860 72,280,954 17,469,297 46,219,145 254,320,969 476,350,077 131,584,386 262,500,872 475,827,121 148,767,899

– – – – – – ’000 ’000 ’000 Group Parent IAS 39 ₦ ₦ ₦ amount amount Carrying Carrying Authority per IAS 39 per IAS 39 869,908 869,908 allowances 17,341,779 72,280,954 17,517,216 46,219,145 254,513,055 476,594,626 131,588,930 262,692,958 476,071,670 148,772,443 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Carrying amount of financialassets without 9 impact. IFRS

Financial assets Financial Held-to-maturity Loans and receivables Loans Other assets Loans and receivables (IAS 39)/ and receivables Loans amortised assets at (IFRS 9) cost Financial securitiesInvestment Other assets instruments Available-for-sale or loss profit assets at fair value through Financial Held-to-maturity(IAS 39)/ amortised assets at (IFRS 9) cost Financial securitiesInvestment 154

38.4 amortised not category category 9 had value fair based and on IFRS into effect the shows table The following if reclassifications happened.

Notes to theConsolidated andSeparate Statements Financial (continued) Loans and receivables Loans Other assets Financial assets Financial Held-to-maturity Available-for-sale instruments Available-for-sale or loss profit at fair value through assets Financial Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 0 0 7 % 157 93 100 100

– ’000 2017 ₦ 7,960 41,446 Authority 1,699,330 31 December 31 (3,878,901) 23,686,882 21,946,106 23,686,882 27,557,823 0 0 5 % 95 100 100

– ’000 2018 ₦ 57,881 Authority ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 1,927,727 1,025,390 31 December 31 (4,471,004) 42,036,469 40,050,861 42,036,469 45,482,083 2 0 8 % 90 100 100

’000 2017 ₦ Group 64,799 402,038 442,948 1,891,816 31 December 31 22,557,274 20,198,621 22,557,274 61,544,447 (39,430,121) 1 0 4 % 95 100 100

’000 2018 ₦ Group 57,881 219,461 1,927,726 31 December 31 45,965,613 43,760,545 45,965,613 11,614,558 73,524,334 (39,173,279) Retained for growth and expansion growth Retained for year for the Profit To pay government pay To Taxation Maintenance of assets Maintenance and amortisationDepreciation Applied as follows: Applied employees pay To Salaries and other personnel costs Value added Value Other non-operating income (local and foreign) Administrative expenses (local and foreign) Administrative Revenue efforts the by betweenits and allocation created employees, Authority the of its and employees wealth the added is Value of further wealth. creation future the for re-investment and government shareholders, Other Disclosures Statement Added Value

NSIA is serving as the programme manager programme serving the is as NSIA entity Presidential for the implementing and (PIDF), Fund Development Infrastructure to conceived Presidency the of initiative an strategic critical, of execution the accelerate rapid the to infrastructure projects essential economy. Nigeria’s of growth modernisation and timely the ensure will Fund the Specifically, projects one road and four the of completion Lagos Bridge, project, Niger power 2nd namely Expressway, – Kano Abuja Expressway, – Ibadan Hydropower Mambilla and Road East-West million US$650 So far, Project. has been committed.

the economy to grow to the economy create a platform for a platform create of national priorityof national to infrastructure projectsinfrastructure investing in investing Making an Impact: Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – 159 ’000 ’000 2014 2014 ₦ ₦ Authority Authority 17,232 (16,988) (33,581) (293,762) (344,331) 8,877,356 3,774,168 3,239,795 31 December 31 31 December 31 (1,679,478) 8,877,356 3,791,400 3,447,069 3,239,795 5,007,386 5,007,386 (1,679,478) 13,884,742

– – – – ’000 ’000 2015 2015 ₦ ₦ Authority Authority 38,400 (12,251) (91,627) 38,400 (492,781) (596,659) 5,811,617 8,732,124 31 December 31 31 December 31 (1,779,601) 13,738,357 (1,779,601) 13,738,357 25,944,238 14,543,741 13,947,082 12,205,881 12,205,881

– – ’000 ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 2016 2016 ₦ ₦ Authority Authority (20,535) (96,811) 663,877 (564,855) 663,877 (682,201) 31 December 31 31 December 31 (2,241,905) 25,825,522 11,151,243 27,747,126 92,796,051 (12,359,477) (2,241,905) 13,466,045 142,900,236 131,694,420 131,012,219 129,434,191 129,434,191

– – – – ’000 ’000 2017 2017 ₦ ₦ 7,960 7,960 (6,494) Authority Authority (47,755) (654,562) (708,811) 7,435,016 4,153,564 1,703,128 31 December 31 31 December 31 (3,170,090) 7,435,016 21,701,131 (3,170,090) 31,121,898 27,557,823 26,849,012 23,686,882 23,686,882

– ’000 ’000 2018 2018 ₦ ₦ Authority Authority (45,613) (89,629) 796,525 884,039 (208,616) (731,478) (321,761) (208,616) (866,720) 1,025,390 31 December 31 31 December 31 (3,282,523) 1,025,390 24,899,792 18,901,727 (3,282,523) 41,827,853 45,482,083 44,293,602 42,036,469 42,036,469 Other comprehensive income: Other comprehensive to reclassified be subsequently may Items that and loss profit reserves in fair value Movement Net change in fair value Investment and interest income and interest Investment income of comprehensive Statement Statement of comprehensive income of comprehensive Statement Other comprehensive income for the year for income Other comprehensive Net amount transferred to profit or loss/retained earnings or loss/retained profit to Net amount transferred Interest income on instrument measured at FVTPL measured income on instrument Interest Total comprehensive income for the year for income comprehensive Total Net gain on financial assets Net gain on financial Net foreign exchange gains exchange Net foreign Total operating income operating Total Investment management fees management Investment Local custodian fees custodian Local Foreign custodian fees custodian Foreign Total investment management and custodian fee and custodian management investment Total Impairment on financial assets charges Total operating profit operating Total Other income Total other income Total Operating and administrative expenses Operating and administrative Total operating and administrative expenses and administrative operating Total Share of profit of investment in associates of investment of profit Share Profit before taxation before Profit Profit for the year for the Profit

– – ’000 2014 ₦ Authority 12,168 185,378 508,323 508,323 4,769,621 1,600,000 5,532,544 8,857,892 31 December 31 43,115,273 11,994,482 108,471,837 155,250,000 169,640,436 170,148,759 169,640,436 170,148,759

– – ’000 2015 ₦ 5,739 Authority 104,603 3,844,603 7,066,155 1,600,000 4,102,341 31 December 31 4,102,341 32,913,468 17,738,425 22,596,249 154,152,447 155,250,000 195,584,674 199,687,015 195,584,674 199,687,015

– – ’000 2016 621 ₦ Authority 66,304 7,355,693 7,096,155 1,600,000 3,718,488 31 December 31 3,718,488 36,062,294 141,076,852 234,132,773 204,375,000 147,172,616 387,609,910 391,328,398 387,609,910 391,328,398

– – 63 ’000 2017 ₦ Authority 48,503 8,545,297 1,600,490 7,884,464 31 December 31 7,884,464 72,310,092 16,085,655 43,497,310 404,313,672 280,662,500 170,859,498 495,019,308 502,903,772 495,019,308 502,903,772

– – ’000 2018 ₦ Authority 12,893 272,950 5,116,826 2,245,070 31 December 31 61,777,335 36,082,678 10,614,990 18,915,515 441,635,909 280,662,500 253,690,496 536,598,066 18,915,515 555,513,581 536,598,066 555,513,581 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

158

Statement of financial position Statement Five Year Financial Summary Financial Year Five Assets and cash equivalents Cash Investment securitiesInvestment Other assets Investment in subsidiaryInvestment Investment in associate and joint ventures and in associate Investment Property and equipment Intangible assets Total assets Total Liabilities Other liabilities Borrowings Total liabilities Total Equity and reserves Government Contribution by Retained earnings Fair value reserves Fair Currency translation reserves Total equity and amount attributable to equity to equity attributable and amount Total (Government) contributors Total equity Total Total equity and liabilities Total Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures

– – – – – – – – – 161 ’000 ’000 2014 2014 Group Group ₦ ₦ 20,606 16,364 (16,988) (33,581) (42,907) 116,981 (293,762) (344,331) 3,920,787 3,239,795 31 December 31 31 December 31 (1,644,388) 3,941,393 3,597,062 3,239,795 5,208,833 5,165,926 5,165,926 10,489,666 (1,644,388) 10,606,647 15,772,573

– – – – – – – – ’000 ’000 2015 2015 Group Group ₦ ₦ 38,400 (12,251) (91,627) (15,496) 38,400 388,322 124,914 (492,781) (596,659) 5,821,745 1,537,219 8,736,293 31 December 31 31 December 31 (2,333,619) 12,654,237 (2,333,619) 14,579,778 14,558,038 26,355,356 13,961,379 11,791,074 11,775,578 11,775,578

– – – – – – ’000 ’000 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL 2016 2016 Group Group ₦ ₦ (132) (20,535) (96,811) 666,107 289,755 (461,502) (564,855) 666,107 (682,201) 6,306,224 31 December 31 31 December 31 (2,332,541) 25,968,800 11,895,128 27,747,126 92,796,051 (12,359,477) (2,332,541) 19,454,045 132,438,305 149,833,338 131,756,104 130,379,425 130,379,293 130,379,293

– – – – ’000 ’000 2017 2017 Group Group ₦ ₦ 7,960 7,960 (6,765) 60,049 (47,755) (85,223) 434,988 (654,562) (402,038) (709,082) 6,469,348 4,153,564 1,652,172 31 December 31 31 December 31 (1,156,763) (4,719,621) 5,372,634 24,370,719 31,367,992 (2,146,165) (33,514,157) (4,719,621) 30,176,455 27,929,908 29,467,373 22,959,312 22,557,274 22,557,274

– ’000 ’000 2018 2018 Group Group ₦ ₦ 59,960 (45,613) (89,629) 191,299 796,525 245,960 209,300 538,816 (887,151) (943,923) (219,461) 31 December 31 31 December 31 (2,418,579) (3,762,225) (2,617,160) 27,026,428 18,052,191 27,403,230 11,405,258 (2,167,320) (1,022,393) (3,204,887) (30,608,117) (3,762,225) 46,121,104 44,337,108 44,154,788 11,405,258 46,185,074 45,965,613 46,504,429 Other comprehensive income: Other comprehensive to reclassified be subsequently may Items that and loss profit reserves in fair value Movement Net change in fair value Statement of comprehensive income of comprehensive Statement Investment and interest income and interest Investment Statement of comprehensive income of comprehensive Statement Net amount transferred to profit or loss/retained earnings or loss/retained profit to Net amount transferred Interest income on instrument measured at FVTPL measured income on instrument Interest Currency translation differences Net gain on financial assets Net gain on financial Share of other comprehensive income of investments of investments income of other comprehensive Share in associate Net foreign exchange gains exchange Net foreign Other comprehensive income for the year for income Other comprehensive Total operating income operating Total Total comprehensive income for the year for income comprehensive Total Investment management fees management Investment Local custodian fees custodian Local Foreign custodian fees custodian Foreign Total investment management and custodian fee and custodian management investment Total Impairment on financial assets charges Total operating profit operating Total Revenue from infrastructure subsidiaries infrastructure investments Revenue from Expense from infrastructure subsidiaries infrastructure investments Expense from Loss from infrastructure subsidiaries infrastructure investments from Loss Other income Total other income Total Operating and administrative expenses Operating and administrative Total operating and administrative expenses and administrative operating Total Interest expense Interest Share of profit of investment in associates of investment of profit Share Profit before taxation before Profit Taxation Profit for the year from continuing operations continuing year from for the Profit Profit from discontinued operations from Profit Profit for the year for the Profit

– – – – ’000 2014 Group ₦ 12,168 116,981 4,769,933 1,616,364 3,772,873 6,310,289 5,691,084 31 December 31 6,310,289 49,920,539 10,470,202 117,746,679 155,250,000 177,838,556 171,528,267 171,528,267 177,838,556

– – – ’000 2015 Group ₦ 5,739 3,213 1,472,508 2,129,600 7,700,860 1,653,739 31 December 31 37,983,532 15,788,509 17,466,251 23,513,074 164,382,547 155,250,000 15,788,509 213,674,786 197,883,064 197,886,277 213,674,786

– – – ’000 2016 621 Group ₦ 4,623 4,698,044 1,957,853 7,958,502 31 December 31 16,187,064 24,089,561 36,661,142 148,267,906 249,822,688 204,375,000 147,845,348 24,089,561 420,934,176 396,839,992 396,844,615 420,934,176

– ’000 2017 Group ₦ 1,201 4,730 2,453,380 3,534,631 6,801,726 31 December 31 22,336,959 49,134,358 13,797,596 16,306,560 29,285,925 43,190,981 429,852,525 280,662,500 170,402,086 32,820,556 533,882,579 501,057,293 501,062,023 533,882,579

– ’000 2018 Group ₦ 5,823 12,893 1,617,016 1,786,620 4,382,101 31 December 31 76,154,290 44,189,369 20,685,075 13,647,879 48,258,049 26,052,673 461,391,586 280,662,500 256,550,342 74,310,722 617,698,108 543,381,563 543,387,386 617,698,108 NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

160

Statement of financial position Statement

Five Year Financial Summary Financial Year Five (continued) Assets and cash equivalents Cash Investment securitiesInvestment Other assets Inventories Investment in subsidiaryInvestment Investment in associate and joint ventures and in associate Investment Property and equipment Intangible assets Total assets Total Liabilities Other liabilities Borrowings Total liabilities Total Equity and reserves Government Contribution by Retained earnings Fair value reserves Fair Currency translation reserves Total equity and amount attributable to equity to equity attributable and amount Total (Government) contributors Non-controlling interests Total equity Total Total equity and liabilities Total Introduction Funds Management Corporate Governance Risk Management Financial Highlights Other Disclosures 163 ANNUAL REPORT & ACCOUNTS 2018 ACCOUNTS REPORT & ANNUAL Venture Capital Venture DongVietnamese Bank World Forum Economic World Rand African South Thai Baht (Currency of Thailand) Dollar Taiwan New of Switzerland Bank Union AssetManagement Agri UFF United Kingdom Nations United Development and on Trade Conference Nations United Initiative Finance Programme Environment Nations United of America States United Dollar States United Scheme Declaration Assets Income and Voluntary Sub Saharan Africa Fund SovereignWealth Institute Fund Wealth Sovereign Be Determined To Bill Treasury Group Trust Singapore Dollar Vehicle Purpose Special Swedish KronaSwedish Fund Stabilisation

VND WB WEF ZAR TWD UBS UFF UK UN UNCTAD UNEPFI US USD VAIDS VC SWF SWFI TBD T-Bill TG THB SPV SSA SEK SF SGD Russian RubleRussian & Poor’s Standard Goals Development Sustainable Philippine Peso Fund Infrastructure Development Presidential Group Infrastructure Development Private Parity Power Purchasing on Asset Return Employed on Capital Return on Investment Return Nigeria Stock Exchange Stock Nigeria Authority Investment Sovereign Nigeria of Morocco Group OCP Exporting of Petroleum Countries Organisation Price/Earning Presidential Fertiliser Initiative Nigeria Infrastructure Fund Limited Gas Liquefied Natural Nigeria Company Mortgage Refinance Nigeria Corporation Petroleum National Nigerian Key Performance Indicators Performance Key Won Korean South Dinar Kuwaiti Hospital Teaching Lagos University Managing Director International Capital Stanley Morgan Mexican Peso Ringgit Malaysian (Mauritius) Company Investment Agriculture NAIC Limited Plc Electricity Bulk Trading Nigerian of Statistics Bureau National Nigerian Commodities Exchange Council Economic National Non-ExecutiveDirector Female NetworkNSIA Nigerian Naira Investment and Development Healthcare NSIA Company Investment Policy Statement Technology Information of Action Plan Comprehensive Joint Japanese Yen German Development Bank/Kfw Bankengruppe Indian Rupee Infrastructure Credit Guaranty Company Limited International FinancialInternational Reporting Standard Funds Wealth of Sovereign Forum International Monetary Fund International Electoral Commission National Independent Islamic Development Bank Development Islamic Rupiah Indonesian

Quarter S&P SDGs PIDF PIDG PPP Q ROA ROCE ROI RUB NSIA OCP OPEC P/E PFI PHP NLNG NMRC NNPC NSE KRW KWD LUTH MD MSCI MXN MYR NAIC NBET NBS NCX NEC NED NFN NGN NHDIC NIF IT JCPOA JPY KfW KPIs IPS INR IFSWF IFSWF IMF INEC InfraCredit IDB IDR IFRS Federal Medical Umuahia Centre, Foreign Exchange Pound Britain Great Institute Global Climate Global Index Conflict Risk Domestic Product Gross Crisis Global Financial General Partners Commodity Index Sachs Goldman Dollar Hong Kong All-Share Index Management Assets Under Academies International Bridge of Directors Board Enterprises Public of Bureau Basis Points Exit EU the from Britain’s Brazilian Real of Nigeria Bank Central Officer Executive Chief Chartered Analyst Financial Franc Swiss of Nigeria of Bankers Institute Chartered Officer Investment Chief Chinese Yuan Officer Operating Chief Index Price Consumer of Nigeria Bank Development Development Department International for Committee Direct Investment Krone Danish Debt Management Office Bank Central European Director Executive Emerging Market Externally Managed Investments Committee Externally Investments Managed Growth Recovery Plan and Economic Planning Resource Enterprise Union European Export Import Bank Federal Capital Territory Direct Investment Foreign Federal Government Fund Generations Future Aminu Hospital Kano Teaching Policy Promotion Agriculture Argentine Peso Artificial Intelligence United Arab Emirates Dirham Emirates Arab United Corporation Africa Finance Bank Development African NIGERIA SOVEREIGN INVESTMENT AUTHORITY INVESTMENT SOVEREIGN NIGERIA

Euro

FX GBP GCI GCRI GDP GFC GPs GSCI HKD EXIMBANK AUM BIA BOD BPE BPS BREXIT BRL CBN CEO CFA CHF CIBN CIO CNY COO CPI DBN DfID DIC DKK DMO ECB ED EM EMI EMIC ERGP ERP EU EUR FCT FDI FG FGF FMCU APP ARS ASI AKTH 162

AED AFC AfDB AI List of Abbreviations Corporate Information

Registered Office The Clan Place 4th Floor, Plot 1386A Tigris Crescent, Maitama, Abuja, Nigeria

Auditors PricewaterhouseCoopers Landmark Towers 5B, Water Corporation Road Victoria Island Lagos

Bankers Central Bank of Nigeria Plot 33, Abubakar Tafawa Balewa Way Central Business District Cadastral Zone Abuja, Federal Capital Territory Nigeria

Fund Custodians JP Morgan Chase & Co (Global Custodian) 25 Bank Street Canary Wharf London, E14 5JP

Stanbic IBTC Bank Limited (Local Custodian) IBTC Place 2, Walter Carrington Crescent Victoria Island Lagos, Nigeria

164 NIGERIA SOVEREIGN INVESTMENT AUTHORITY