Juliet Ezeh
The Nigeria Sovereign Investment Authority has reported a dramatic 91 percent decline in profit for the 2025 fiscal year, highlighting the risks of relying on foreign exchange windfalls and marking a significant shift in the country’s sovereign wealth performance.
According to its latest financial statements, the Authority’s profit fell sharply to 107 million dollars, down from 1.24 billion dollars recorded in 2024. The steep decline was largely driven by the absence of extraordinary foreign exchange gains that had previously boosted earnings during a period of intense naira volatility.
The 2024 financial year had been unusually strong for the Authority due to a surge in FX-related gains following the sharp depreciation of the naira. That year, the Authority recorded a foreign exchange gain of 566.9 million dollars, significantly inflating its bottom line. However, in 2025, those gains did not recur, exposing the underlying performance of its core investment portfolio.
Financial disclosures show that one of the most affected segments was foreign exchange-linked collateralised securities. These instruments, which are highly sensitive to movements in the naira-dollar exchange rate, experienced a dramatic reversal. After generating 407.9 million dollars in gains in 2024, they contributed only 3.1 million dollars in 2025, representing a massive swing of over 400 million dollars.
This sharp drop underscores how heavily the Authority’s previous performance had been influenced by currency fluctuations rather than sustained operational income. Analysts say the development reinforces the need for a stronger focus on stable, long-term revenue streams rather than volatile market-driven gains.
Beyond the foreign exchange impact, other parts of the Authority’s investment portfolio also faced challenges. Income from equity-method investments reversed from a gain of 28.4 million dollars in 2024 to a loss of 7.2 million dollars in 2025. This shift reflects broader market pressures and reduced profitability across some of its strategic holdings.
In addition, a notable revenue stream completely disappeared. The Authority reported 76.42 million dollars in agriculture infrastructure operating revenue in 2024, but recorded zero earnings from that segment in 2025. The absence of this income further contributed to the overall decline in profitability and raises questions about the sustainability and continuity of certain project-based revenues.
Despite the significant drop in profit, the Authority’s core financial position showed resilience. Interest income rose to 197.3 million dollars, up from 177.8 million dollars in the previous year, indicating improved returns from fixed-income investments. Core operating income also increased by six percent to 349.07 million dollars, suggesting that underlying business operations remain stable.
The balance sheet also strengthened during the period under review. Total assets grew to 3.42 billion dollars, compared to 2.88 billion dollars in 2024. This expansion was supported by increased government contributions, which reached 2.06 billion dollars, reflecting continued fiscal support and commitment to long-term national savings and investment strategies.
The Authority’s retained earnings climbed to 5.0 billion dollars, reinforcing its position as a key financial buffer for the country. These funds are critical for stabilising the economy during periods of volatility, particularly in managing excess crude oil revenues and supporting strategic investments.
The latest results highlight a transition phase for the Authority as it moves away from windfall-driven earnings toward a more balanced and sustainable financial model. The disappearance of FX gains has effectively reset expectations, placing greater emphasis on consistent income generation and prudent asset management.
Economic experts note that while the 2025 performance may appear weak compared to the previous year, it presents a more realistic picture of the Authority’s operational strength. The 2024 results were widely seen as exceptional due to the unique currency environment, making the current figures a better reflection of long-term performance trends.
Going forward, the Authority is expected to deepen its focus on diversified investments across infrastructure, agriculture, healthcare, and financial markets. Strengthening these sectors could help reduce exposure to currency volatility and enhance stable revenue generation.
The broader implication for Nigeria’s economy is also significant. The report underscores how exchange rate movements can distort financial outcomes, creating temporary gains that may not be sustainable. As the country continues to implement reforms aimed at stabilising the naira and improving economic fundamentals, institutions like the sovereign wealth fund will need to adapt to a more predictable but less windfall-driven environment.
Ultimately, the Authority’s 2025 financial performance serves as a reminder that while foreign exchange gains can provide short-term boosts, long-term economic strength depends on consistent, diversified, and well-managed investments.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.