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.
By Adedapo Adesanya
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has secured a $12 billion commitment from South Korea to establish a Skills Acquisition Centre in Abuja, as part of efforts to strengthen entrepreneurship and boost small businesses across Nigeria.
The chief executive of SMEDAN, Mr Charles Odii, disclosed this over the weekend during a road walk and sensitisation campaign at Utako Market in Abuja to commemorate the 2026 World MSME Day.
According to Mr Odii, the proposed facility will provide vocational and entrepreneurial training to young Nigerians and enhance the capacity of Micro, Small and Medium Enterprises (MSMEs).
He said the agency is awaiting the allocation of land by the Federal Capital Territory (FCT) Administration for the project.
“We need land in the FCT to build the Skills Acquisition Centre. If the FCT Administration is unable to provide one, we will use our office premises in Idu, Abuja, because we do not want Nigeria to miss this opportunity offered by the Korean Government to support skills and vocational training,” he said.
As part of activities marking the World MSME Day, Mr Odii also announced the launch of SMEDAN’s N500 million GROW Fund, a zero-interest financing intervention designed to support small businesses across the country.
He explained that the fund would be disbursed to members of registered cooperative societies and business associations to strengthen their enterprises.
According to him, beneficiaries are expected to utilise the funds strictly for business purposes, including expanding working capital, acquiring workspaces and purchasing equipment.
“The funding is meant to support and improve their businesses. It should be used for working capital, workspaces, tools and other productive business needs. Any use outside these objectives will not be encouraged,” he said.
Mr Odii further disclosed that entrepreneurs trained by SMEDAN in Abuja would receive vocational equipment, including washing machines, barbing kits, shoemaking tools and sewing machines, to enable them to become self-reliant.
“We have identified these tools as essential to the businesses of our trainees based on the skills programmes they have undergone,” he added.
The SMEDAN boss stressed that the agency’s interventions are driven by the critical role MSMEs play in Nigeria’s economy.
“Small businesses are the heartbeat of Nigeria’s economy. By providing infrastructure, skills and financing, we are creating an enabling environment for them to grow, thrive and contribute meaningfully to national development,” he said.
Odii also revealed that the National MSME Policy would be reviewed and relaunched in November 2026 to strengthen the sector and improve its contribution to economic growth.
He called on state governments to collaborate with SMEDAN in expanding skills acquisition programmes, creating jobs, reducing poverty and supporting the economic development agenda of President Bola Tinubu’s administration.
By Adedapo Adesanya
The Dangote Petroleum Refinery has purchased two cargoes of crude oil from the United Arab Emirates (UAE), marking its first-ever procurement of Middle Eastern crude as it diversifies its feedstock sources ahead of continuous expansion.
According to a report by S&P Global Commodity Insights, the two cargoes will be the first sourced by the 700,000-barrels-per-day refinery from any Middle Eastern supplier, signalling a shift from its traditional reliance on Nigerian, African, and United States crude grades.
The report said the purchases followed the resumption of oil exports from the Middle East after the United States and Iran reached an interim peace agreement that restored confidence in shipping through the Strait of Hormuz.
The refinery, designed primarily to process Nigeria’s light sweet crude, has increasingly diversified its crude slate as operations ramp up. The company sources crude from Brazil, Equatorial Guinea, Angola, Algeria, and the US, among others.
The refinery and the Nigerian National Petroleum Company (NNPC) Plc had agreed on the supply of between 13 and 15 cargoes of Nigerian crude monthly in Naira, but the volumes often fluctuate. In May, the state oil company allocated seven cargoes to the plant, up from five in previous months.
The chief executive of the Dangote Refinery, Mr David Bird, had previously disclosed that these constraints had compelled the company to seek additional crude sources outside Nigeria.
According to S&P Global, the refinery has been broadening the range of crude grades it processes as part of its ambition to operate as a fully merchant refinery. The report noted that in 2025, about 70 per cent of the refinery’s crude imports came from Nigeria, while 24 per cent originated from the United States.
The report added that the refinery’s expansion plans would further increase its crude requirements. Dangote plans to double the refinery’s processing capacity to 1.4 million barrels per day by the end of 2028, a level that would enable it to process about 80 per cent of Nigeria’s recent crude oil production in a single day.
Business Post understands that since NNPC cargoes are cheaper for the refinery because of lower shipping costs, importation of crude could translate to higher fuel prices, with Nigerians possibly buying as high as N1,300 – N1,400 at the pump.
By Adedapo Adesanya
The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern that Nigerian consumers have yet to benefit from lower prices despite the recent sharp decline in global crude oil prices.
Business Post reports that crude prices currently trade around $69 and $71 per barrel in the international market.
The commission stated on Sunday that following a market surveillance exercise, the review of gantry prices from local refiners, marketers, depot operators and retail outlets showed only token reductions, not aligned with the steep drop in international crude prices.
The chief executive of the agency, Mr Tunji Bello, said that though the FCCPC does not set petroleum prices in a deregulated market, it is mandated by the Federal Competition and Consumer Protection Act, 2018, to promote competition and protect consumers from unfair business practices.
“To be clear, the commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive and exploitative business practices,” Mr Bello said.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it is taking forever for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions,” he added.
The organisation noted that crude prices fell to about $73 per barrel after a recent ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, down from a peak near $120 per barrel in April.
During the April–May price spike, petrol prices rose to between N1,350 and N1,500 while diesel traded around N2,000. In February, PMS averaged between N800 and N900. Presently, average retail PMS nationwide is about N1,200, with some local refiners listing gantry prices between N1,025 and N1,075.
The FCCPC acknowledged that domestic fuel prices are affected by multiple commercial factors, including refining costs, foreign-exchange movements, logistics, financing and distribution expenses, but said competitive market dynamics should have passed more of the recent international cost declines to consumers.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment,” Mr Bello added. “Where credible evidence indicates conduct that undermines competition, exploits consumers or otherwise contravenes the Federal Competition and Consumer Protection Act, the Commission will investigate and take appropriate enforcement action,” urging consumers to report suspected anti-competitive conduct, misleading pricing or other unfair market behaviour via its established complaint channels.
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