…As Crisis rocks NASSI, members sack DG over alleged fraud***
Bonds auction results in the past few months for both the
Federal Government Bonds and the Savings Bonds shows that the level of
patronage has declined.
Data obtained from the website of the Debt Management Office
(DMO) on Sunday in Abuja, showed that in 2017, the Federal Government bonds had
N2.37 trillion subscriptions with 1.49 trillion as offers and N1.55 trillion in
allotments.
In 2018, subscriptions stood at N1.506 trillion and total
allotments were N822.41 billion, while what was offered was N1.07 trillion.
For the savings bonds, in 2017, the Federal Government made
N7.197 billion from 9,866 subscribers while in 2018, N2.533 billion was
recorded from Jan. to Sept., with results for Oct., Nov. and Dec. absent.
The Director-General, Ms Patience Oniha in an interview with
the News Agency of Nigeria (NAN), said that the low level of liquidity
available, especially in the case of the Federal Government bonds could be
responsible.
She said that the product was targeted at institutional
investors, though not deliberately because of the large volumes.
“When we are talking institutional investors, we are talking
Deposit Money Banks (DMBs), Pension Fund Administrators (PFAs) and non-bank
financial institutions so those are the people that buy that one.
“To invest in bonds, you need liquidity and you know that
for the banks, monetary policy has been tight and I think that in some way,
because of the monetary policy stance, the ability has somewhat been reduced.”
Oniha said that the DMO’s goal from 2009 was to diversify
the bonds investment base.
According to her, before 2008, the banks took up about 64 to
65 per cent of the auction, but were presently taking much smaller because the
PFAs, insurance companies and other institutions now participate in the market
too.
She, however, said it was a good thing.
“So, for those key investors, the decrease you think you are
seeing in the level of subscription, and the inching up of the interest rates
has to do largely with the level of liquidity in the system.”
She, however, dispelled any fears of foreign investors
pulling out their investments because of the forthcoming general elections.
She said that they were more concerned about what was
happening with interest rates globally, adding that foreign investors were only
looking for opportunities where ever in the world was safe and returns were
good to invest their monies.
“I believe that in May 2015 for instance, we actually had a
higher level of subscription level from foreign investors.
“Looking at our strategy, generally, we are not looking at
concentrating on one investor group which explains why we started
diversifying to various other investors’ segment.
“We are happy to have foreign investors but we also want to
have more domestic investors participate in the market”, she said.
About the savings bonds, Oniha said that it was targeted at
retail investors so they could also participate in the market.
“From the very first month the subscription was good, I
would not say very high if we look at our expectations.
“What has also happened is that for some, they are able to
buy this month with the savings they have, and may not have built up enough the
next month to invest in it again.
“So the retail investor typically has to build up savings to
be able to invest.”
Oniha said that the DMO had recorded successes on the
product, adding that the number of retail investors had reached about 10,000 at
the last count, while the number of first time investors had also
increased.
She, however, said that the Federal Government would be glad
to have larger volumes from investors, adding that sensitisation was
ongoing to get people informed about the product.
NAN reports that the DMO introduced the savings bond into
the domestic capital market in March 2017.
This was to provide an opportunity for retail investors to
participate effectively in the domestic fixed income market and earn favourable
returns, while contributing to national development.
The debut issuance of the savings bonds had 2,575 investors
with total subscription and allotment of N2.068 billion.
In another development, the Nigerian Association of Small
Scale Industrialists (NASSI) has announced the sack of its acting
Director-General, Mr Solomon Vongfu.
NASSI, founded in 1978, is the umbrella body of the
country’s micro and small scale industrialists engaged in production,
manufacturing, provision of services, entrepreneurship and human resource
development, among others.
Vongfu’s “sack’’ was announced in a memo issued by the
National Executive Council (NEC) of NASSI at the end of its “extraordinary
meeting’’ in Abuja on Thursday.
Later in the day, some members of the National Executive
Committee also met at the association’s national secretariat in Abuja to ratify
the decision of the NEC.
A copy of the memo, signed by the National President,
Ezekiel Essien; Vice President, Hussaina Ahmed, and Public Relations Officer,
Aisha Baffa, was made available to News Agency of Nigeria (NAN in Abuja.
The NEC also announced the dissolution of the association’s
National Electoral Committee “with immediate effect due to insubordination by
its members.”
