Economy
Investments, Impact of Policies on Asset Management in Nigeria
Since the inception of asset management in Nigeria in 1991, its relevance to the economy, contribution to society and how it has enhanced the performance of Nigerian banks have been critically questioned.
With regards to its track record and its input to the development of the financial market, asset management, which can be described as a securitisation vehicle, has not done badly.
The present value of Nigeria’s assets under management (AUM) is estimated at N1.2 trillion. The fastest-growing fund in the industry is the money market fund, which is currently valued at over N800 billion.
This fund has immensely contributed to the development of the financial market and helped to improve the savings culture of many Nigerians.
In a recent interview, Mr Oladele Sotubo, Chief Executive, Stanbic IBTC Asset Management Limited, expressed his views on investments and the impact of policies on the asset management sector of the fund market and how its opportunities can be harnessed.
Mr Sotubo emphasised the need to urgently diversify the economy to create more broad-based investment opportunities. That way, corporate entities will be able to access the capital market more efficiently.
“When an economy is diversified, the impact will be evident on the number of financial instruments available for investment and also increase the number of companies participating in our capital market.
“Ultimately, all these will positively affect the tax revenue and by extension, infrastructural development of the nation,” he said.
Mr Sotubo stated further: “There is no denying that asset management has improved the savings culture of Nigerians.
“Commercial lending policies made by the Central Bank of Nigeria (CBN) affect the rates at which government instruments like the treasury bills and open market operations bills are issued and traded.
“In turn, this affects the investment space and return on investment yield is also affected by the rate of inflation.”
While highlighting the impact of key statutes and regulations guiding the fund market, Mr Sotubo attributed the successes achieved in the industry thus far to regulations instituted by the Securities and Exchange Commission (SEC), guiding the operations of asset management companies, thereby protecting the investors.
He stated that regulations issued by the SEC have enhanced professionalism while also promoting healthy competition amongst fund managers.
The impact has been very positive on the industry as there has been more collaboration between the operators and the regulators. The positive outcome is also reflective in the continuous growth of the industry.
In 2017, the CBN developed a regulatory framework for the establishment, licensing, regulation, management and supervision of licenced asset management companies in Nigeria.
According to Mr Sotubo, the CBN policy provides a framework for privately owned asset management companies in Nigeria that will be eligible to purchase non-performing loans or classified assets from financial institutions and specialised institutions.
The federal government in 2011 set up the Asset Management Commission of Nigeria (AMCON) to purchase non-performing loans from banks.
The upside is the de-risking in the banking sector as banks sold their non-performing loans to these companies.
There was also the development of capital markets in the area of structured alternative investments such as Asset-Backed Securities and Mortgage-Backed Securities.
When asked about the effects of the ravaging pandemic on the asset management industry, Mr Sotubo said the sector was not immune from the negative impact and economic uncertainties.
As witnessed in many sectors that were affected in various ways, there were drastic changes in business processes, the rise in digital and virtual activities as well as the transition to the new normal.
The measures of success in the fund industry will be gauged by how a business stays in touch and how customers are engaged. This simply means there will be more focus on digital platforms for client engagements and product distribution.
From Stanbic IBTC Asset Management Limited’s perspective, success will be measured in terms of positive customer experience and how well organisations support their clients in achieving their investment objectives.
Like every sector faced with risks, the Nigerian asset management industry is not a sacred cow. The key risk is the fast-rising number of unlicensed money managers and Ponzi schemes luring people with lofty promises of quick financial prosperity.
Their sole aim is to reap unsuspecting victims of their money and the associated risks have doubled, especially because these schemers can reach their victims through various digital platforms. People fall prey to the activities of plotters largely due to ignorance and in other cases, greed.
To negate and counter these devious activities, Stanbic IBTC Asset Managers churn out ways to educate the public, especially on its digital platforms. Also, SEC does a good job of coming up with actions aimed at checkmating these schemers.
On the notable developments the Nigerian asset management industry has enjoyed in the last decade, Mr Sotubo gave his view in comparison with the industry in other African countries.
According to him, the Nigerian asset management industry has witnessed its fair share of growth in the Collective Investment Scheme segment.
Citing the data from SEC in December 2011, the Nigerian funds market had 44 funds with the Asset Under Management circa N73 billion and 103 mutual funds with industry asset under management of N1.26 trillion by May 2020.
An AUM of N5 trillion would have been possible if there had been a national savings strategy. Even at the peak period of the COVID-19 pandemic, the capital market, including exchanges, depositories, stockbrokers and counterparties continued to operate via technology-enabled means.
Addressing the Finance Act 2019, which is aimed at strengthening the Nigerian asset management industry, Mr Sotubo agreed that it was a step in the right direction.
As much as there have been remarkable achievements in the industry, more needs to be done especially on the issue of multiple taxations for mutual fund subscribers with regards to withholding taxes and taxes generated by Collective Investment Scheme (CIS).
With the understanding that an efficient tax system will boost the growth of capital and economy, the Act will be reviewed annually and relevant authorities will be engaged on the subject.
Noting that the asset management industry and the fund market generally is highly competitive, the Stanbic IBTC Asset Management Chief Executive touted that his organisation has a strong brand that rides on the heritage of its parent company, Stanbic IBTC Holdings PLC.
He cited the proven track record of excellence in the fund market business. As reported in an article by Nairametrics, it was stated that Stanbic IBTC Asset Management accounted for 65 per cent of the total AUM of the Nigerian mutual fund industry in 2019. This identifies the firm as one of the strongest and most efficient asset managers in Nigeria.
Stanbic IBTC Asset Management has popularity and excellence in top sectors like investment banking, pension, non-pension asset management and stockbroking, which gives investors no doubt about doing business together.
Another edge is the parental heritage of Standard Bank Group which provides access to international capabilities in terms of manpower, technology product and related professional services.
The organisation has experienced and dedicated workers who are committed to attending to clients’ investment needs.
Nigeria’s trading environment has changed sharply since the Central Bank of Nigeria pushed rates to 27.5%, and the impact is being felt across the currency market. A rate that high does more than tighten financial conditions. It changes how traders read momentum, how they manage risk, and how they think about the naira against the dollar. Reuters reported that the CBN raised the policy rate to 27.50% in November 2024 after a string of hikes, and later kept it there as inflation and exchange rate pressures remained central concerns.
For anyone active in Nigeria’s currency space, forex trading now requires a very different mindset. What worked in a looser money environment does not always work when rates stay this high. Liquidity behaves differently, sentiment shifts faster, and market participants become much more sensitive to inflation data, policy guidance, and reserve trends. Reuters also reported that the CBN has tied its tight stance to the need to control inflation and stabilize the market, while reforms have improved reserves and confidence in the foreign exchange system.
Why a 27.5% rate changes the market mood
A rate this high affects more than borrowing costs. It resets expectations. Traders start looking at the naira through a different lens because such an aggressive stance tells the market that policymakers are serious about defending stability, even if growth conditions become tougher. In Lagos and Abuja, where many traders track both official policy signals and real market pricing, that shift has become impossible to ignore.
Higher rates reshape risk appetite
When rates rise to this level, speculative behavior often becomes more cautious. Some traders reduce position sizes. Others stop chasing moves and wait for stronger confirmation before entering. Why does that happen? Because a tight policy environment tends to punish weak conviction and reward discipline.
There is also a psychological effect. A market with a 27.5% policy rate feels heavier. It is like driving on a road where every turn demands more care than before. That change in mood forces traders to become more selective, especially in a country like Nigeria where inflation and currency sentiment still move together closely. Reuters said inflation eased after a statistical rebase, but the central bank still held rates high because broader pressure had not disappeared.
The naira story is no longer just about panic
Nigeria’s currency narrative has also become more layered. Earlier fears were largely about shortages and disorder, but now traders are also watching reforms, reserves, and policy credibility. Reuters reported that net foreign exchange reserves rose strongly in 2025 and that the CBN said clearer rules and reforms had reduced distortions and volatility.
That matters because strategy changes when the market starts trusting policy a little more. Traders can no longer rely only on the old playbook of assuming one direction and staying there.
How trading strategies are being reset
The biggest reset is in time horizon. In a market shaped by tight policy, many traders become less comfortable with broad, lazy positioning. They look for cleaner setups and faster reactions instead. A currency market under heavy policy influence often rewards timing more than stubborn conviction.
Shorter setups are becoming more practical
Many Nigeria focused traders now pay closer attention to event driven opportunities. Central bank comments, inflation releases, reserve updates, and reform announcements matter more than they used to. Reuters reported in March 2026 that the CBN eased some foreign exchange rules for oil companies to improve market liquidity and confidence, another sign that policy decisions are still actively shaping the currency landscape.
That makes short and medium term strategy more relevant. You might see a naira move that looks technical on the surface, but underneath it is often responding to policy changes, liquidity shifts, or fresh confidence in reserves. In Nigeria, the chart and the macro story now feel more connected than before.
Risk management matters more than prediction
This is where serious traders separate themselves from hopeful ones. A high rate environment does not just reward the right view. It rewards survival. Traders in Port Harcourt or Lagos who stay too attached to a single bias can get caught when policy or liquidity changes suddenly alter the mood.
I have seen markets like this before. They look calm until they do not. Then the move comes fast. That is why many traders are adjusting stop placement, reducing leverage, and focusing more on capital protection than on chasing every opportunity.
The reset, in other words, is not only strategic. It is behavioral.
Why Nigeria’s market may keep evolving
The CBN’s policy stance has already pushed traders to adapt, but the story is still developing. Reuters reported in April 2025 that the central bank sold nearly $200 million to support the naira after tariff related market shocks, showing that officials remain willing to act when volatility becomes disruptive. Reuters also reported this month that the naira had been relatively stable, supported by dollar liquidity from bond investments and exporter repatriations.
Stability can create a different kind of opportunity
A more orderly market does not mean fewer opportunities. It means different ones. Instead of trading pure panic, participants may increasingly trade around policy credibility, flow trends, and relative stability. For Nigeria, that could mark an important shift.
That is why the 27.5% rate matters so much. It has forced traders to stop relying on old assumptions and start working with a market that is slowly becoming more policy driven, more selective, and in some ways more professional.
Conclusion
The CBN’s 27.5% policy rate is forcing a major reset because it changes how traders approach risk, timing, and market structure in Nigeria. High rates, stronger reserves, and ongoing reforms have made the naira story more complex than it was before, and that means strategy has to evolve as well.
For traders in Nigeria, the message is clear. This is no longer a market where old habits are enough. Tight policy has raised the standard, and the traders who adjust their methods are more likely to stay effective as the next phase of the currency story unfolds.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.
During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.
According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
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