SEC Reminds Fund Managers of Regulatory Fees Payment
By Aduragbemi Omiyale
Fund managers operating in Nigeria have been reminded by the Securities and Exchange Commission (SEC) of the annual supervisory fees they are expected to pay to the agency.
In a circular issued at the weekend, the commission said the fees are to be paid in full on or before January 31, 2022, as failure will attract sanctions.
“The commission hereby draws the attention of all registered fund/portfolio managers to SEC Rule on annual supervision fees for Collective Investment Schemes (CIS) and regulatory fees for discretionary and non-discretionary funds/portfolios issued on January 21, 2021, and the amendment thereto issued on December 20, 2021,” a part of the notice said.
The agency stressed that the payment for the 2021 annual supervisory fee must be based on the value of Net Asset Value (NAV) as at December 31, 2021, and the annual regulatory fee for discretionary and non-discretionary funds/portfolios.
According to the circular, the annual supervisory fee for CIS under management “shall be 0.2 per cent of the Net Asset Value (NAV) of CIS under management and be computed and accrued daily for each CIS.”
It further stressed that “all fund managers shall pay the annual supervisory fee to the commission not later than January 31 of every year and that the payment for 2021 annual supervisory fee shall be based on the value of NAV as at December 31, 2021.”
On annual regulatory fees for discretionary and non-discretionary funds/portfolios, the SEC stated that every fund/portfolio manager “shall pay not later than January 31 of every year annual regulatory fees to the commission.”
“The fees are 0.25 per cent of the NAV of all discretionary and non-discretionary funds/portfolios (other than CIS) under the management of the fund/portfolio manager for retail investors and 0.01 per cent of the NAV of all discretionary and non-discretionary funds/portfolios (other than CIS) under the management of the Fund/Portfolio manager for qualified investors.
“Accordingly, funds/portfolio managers should note that late payment will attract a penalty of N100,000 and a daily sum of N5,000 for every day of default, or such other stiffer penalty as the Commission may determine,” it added.
Nigeria’s Debt Profile Jumps 17% to N46.25trn in 2022
By Adedapo Adesanya
Nigeria’s total public debt stock increased by 17 per cent to N46.25 trillion or $103.11 billion as of December 2022 from N39.56 trillion or $95.77 billion in 2021.
This information was revealed by the Debt Management Office (DMO) on Thursday.
This means that the country’s debt profile precisely increased by 16.9 per cent or N6.69 trillion or $7.34 billion within one year, as the government borrow funds from various quarters for its budget deficits.
The agency said the new figures comprise the domestic and external total debt stocks of the federal government and the sub-national governments (36 state governments and the Federal Capital Territory).
The DMO statement partly read, “As of December 31, 2022, the total public debt stock was N46.25 trillion or $103.11 billion.
“In terms of composition, total domestic debt stock was N27.55 trillion ($61.42 billion) while total external debt stock was N18.70 trillion ($41.69 billion).
“Amongst the reasons for the increase in the total public debt stock were new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects. The issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.
“On-going efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.”
“The total public debt to gross domestic product (GDP) ratio for December 31, 2022, was 23.20 per cent and indicates a slight increase from the figure for December 31, 2022, at 22.47 per cent.
“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States,” the debt office said.
12-Month Treasury Bills Now 14.74% as Appetite Falls
By Dipo Olowookere
The 364-day treasury bills stop rate was raised by the Central Bank of Nigeria (CBN) at the primary market auction (PMA) on Wednesday by 5.25 per cent as appetite for the asset class waned.
The central bank, which conducted the exercise, did not record the usual hunger for the debt instrument by investors yesterday, ostensibly because of how the bank had tinkered with the rates in the previous exercises.
But the apex bank surprised subscribers at the PMA on Wednesday when it jerked the rate higher to 14.74 per cent from the 9.49 per cent it cleared in the previous PMA.
According to details of the exercise, the CBN auctioned the one-year bill worth N139.96 billion and received subscriptions valued at N165.28 billion, allotting N142.16 billion.
Business Post reports that it was not only the 12-month dated instrument that enjoyed the rate hike yesterday as the two others benefitted.
The central auctioned N3.34 billion worth of the 182-day bill during the session but had investors stake N1.56 billion on it, with N1.56 billion allotted to successful bidders at 8.00 per cent compared with the previous session’s 5.00 per cent, indicating an increase of 3.00 per cent.
As for the 91-day bill, the rate cleared at 6.00 per cent after it was moved higher by 3.45 per cent from 2.55 per cent. This was after the apex bank allotted N1.75 billion to subscribers, the same amount of bids it received from the N2.16 billion taken to the market on Wednesday.
Recall that some days ago, the Monetary Policy Committee (MPC) of Nigeria’s central bank increased the Monetary Policy Rate (MPR), which is the benchmark interest rate in the country, by 0.50 per cent to 18.00 per cent.
The team explained that the rate hike was mainly to tame rising inflation in Nigeria, which the National Bureau of Statistics (NBS) said stood at 21.91 per cent in February.
China’s Investment in Africa Has Cut Need for Loans from World Bank, IMF—Osinbajo
By Adedapo Adesanya
The Vice President of Nigeria, Mr Yemi Osinbajo, has lauded China’s investment in Africa, saying it has reduced dependency on loans from Bretton Woods, which consists of the World Bank and the International Monetary Fund (IMF).
In a statement seen by Business Post, the VP, at an event at King’s College London on March 27, 2023, stated that “China shows up where and when the West will not and or are reluctant.”
He said this was evident in the investment of the Asian giant in Africa, which he said stood at $254 billion in 2021, about four times the volume of US-Africa trade.
He also noted that, “China is the largest provider of foreign direct investment, supporting hundreds of thousands of African jobs. This is roughly double the level of U.S. foreign direct investment, adding that, “China remains by far the largest lender to African countries.”
He also noted that Chinese companies had taken the lead in exploiting minerals in Africa, many now in lithium mining in Mali, Ghana, Nigeria DRC, Zimbabwe and Namibia.
The Nigerian second-in-command said that China has always shown up for African countries while outrightly condemning Western countries in that regard.
He said, “Most African countries are rightly unapologetic about their close ties with China. China shows up where and when the west will not or are reluctant.”
He added, “And many African countries are of the view that the beware of the Chinese Trojan loans advise forming the west is wise but probably self-serving,” explaining that, “Africa needs the loans and the infrastructure. And China offers them. In any case, the history of loans from Western institutions is not great.”
Taking a step further, Mr Osinbajo sent a salvo to the World Bank and the IMF over the conditions attached to their loan facilities.
“The memory of the destructive conditionalities of the Bretton Woods loans is still fresh, and the debris is everywhere.
“And the preoccupation of western governments and media with the so-called China debt trap might well be an overreaction,” he added.
“I recommend an eye-opening lecture by Professor Deborah Brautigam about two weeks ago at Jesus College Cambridge.
“The truth, as she points out, is that all of the Chinese lendings to Africa is only 5 per cent of all outstanding public and publicly guaranteed debt in low and middle-income countries, compared to 23% held by the World Bank and other multilaterals.”
He alluded that Chinese lenders account for 12 per cent of Africa’s private and public external debt.
“And the Chinese have also been there when the debts cannot be paid. In early 2020 as COVID battered African economies, China came together with other G20 members to launch the Debt Service Suspension Initiative (DSSI).
“About 73 low-income economies benefited from the suspension of principal and interest payments. Chinese banks provided 63 per cent of the total debt relief while being only owed 30 per cent of the debt service payments due,” he quipped.
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