There is no doubt that COVID-19 has done some devastating damage to various parts of the Nigerian economy and indeed, the world economy. Price of oil fell so much such that, buyers were figuratively or literarily being begged to buy, stock markets became jittery, unemployment rate spiked, the need for social services skyrocketed, the list goes on and on.
One industry in Nigeria that has remained resilient in spite of it all, is the mutual fund industry. The health and wellbeing of the asset management industry is usually measured or gauged with trends in inflow, outflows, and total Net Asset Value (NAV).
Using those metrics as a measure of the extent to which the Coronavirus impacted the industry, one can say that the mutual fund industry in Nigeria is alive and well, and is defying all the odds against a virulent virus that visited the world with vengeance. Before the advent of COVID-19, early in 2020, the total asset value of Nigeria’s mutual funds stood at N1.042 trillion (according to the December 27th 2019 edition of NAV Summary Report from the SEC). Fast forward to May 15th 2020, after COVID-19 took hold on the world economy, the total net asset value of mutual funds in Nigeria has increased to N1.31 trillion. This represents an increase of N270 billion or 26%
Fund Flows: Of the N270 billion increase in asset value, N260.5 billion came from increase in net flows while N9.5 billion came from investments returns. The fact that the industry saw a positive inflow of that magnitude in periods where people were almost at the verge of dipping hands into their savings and investments is indicative of how resilient the industry has been. Although the industry was shaken by the effects of the virus and the trends in the oil market between March and April, it regained its strength towards the end of April and has since maintained a positive trend.
Flight to Safety: In what looked like flight to safety, much of the positive fund flows went to Bond Funds and Money Market Funds. While Money Market Funds recorded a year to date net positive flow of N97.5 billion, Bond Funds generated N110.4 billion in net inflows. This is the first time any fund category is generating more positive flows than the Money Market Fund category. The reason could be because yields on bond funds are slightly better than what is obtainable from money market funds. Eurobond funds, recorded N12 billion in positive net flows while Infrastructure fund category saw N27 billion come in.
Performance Indicators: In an apparent justification for the flight to safety, almost all funds under the equity fund category made losses except ACAP Canary Growth fund and PACAM Equity fund. In all, that category of funds has lost an estimated N1.2 billion within the period under review. On the other hand, only 6 out of the 21 Bond funds made losses as that category of funds gathered an estimated gain of N3.5 billion. Eurobond funds seem to be basking in the euphoria of Naira devaluation as they gain massively from what is lost from the value erosion in the Naira. The Eurobond category generated an estimated N9.8 billion from January to May 15th 2020. It does look like this category of fund may be a good hedge against Naira devaluation. Much of the gains however, came from Stanbic IBTC Dollar fund and United Capital Euro Bond fund.
Though there are pockets of gains by some funds, most of the categories made lose within the period under review, arising mostly from their increased exposure to the equity market.
Elsewhere in the World: This trend does not seem to be peculiar to Nigeria. Recent news from Canada indicates that Canadian Pension Plans defied the COVID-19 menace and added $17 billion to increase the total net asset value to $409 billion, as at March 31st 2020. Like the Nigerian mutual fund industry, $5.5 billion of the increase in Canada’s pension plans came from contributions or net flows while $12.1 billion was as a result of positive performance.
Future Expectations: The year 2020 is still too young and the world economy too volatile for credible prediction, one can therefore not say with great certainty if the yield driven funds like the Bond Funds and Money Market Funds will maintain the momentum in generating positive gains. In terms of generating positive net flows, it does look like that trend will continue till the end of the year when it becomes clearer what direction the world economy will be heading to following the devastating effects of COVID-19. Until then, we are watching.
- This analysis is based solely on data obtained and obtainable from the Security and Exchange Commission, Nigeria
COVID-19 Update in Nigeria
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,437 confirmed cases.
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 1,162 samples across the country.
To date, 57,437 cases have been confirmed, 48,674 cases have been discharged and 1,100 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 480,874 tests have been carried out as of September 21st, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 21st September 2020,
- Total Number of Cases – 57,437
- Total Number Discharged – 48,674
- Total Deaths – 1,100
- Total Tests Carried out – 480,874
According to the NCDC, the 195 new cases were reported from 11 states- Enugu (51), Gombe (40), Lagos (39), Plateau (23), FCT (15), Rivers (12), Kaduna (8), Ondo (3), Bauchi (2), Edo (1), Ogun (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,982, followed by Abuja (5,566), Oyo (3,254), Plateau (3,231), Edo (2,612), Kaduna (2,356), Rivers (2,255), Delta (1,799), Ogun (1,767), Kano (1,734), Ondo (1,600), Enugu (1,285), Ebonyi (1,038), Kwara (1,025), Abia (881), Katsina (848), Gombe (839), Osun (817), Borno (741), and Bauchi (691).
Imo State has recorded 562 cases, Benue (473), Nasarawa (448), Bayelsa (394), Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (254), Adamawa (234), Anambra (232), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
WHO approves protocol for phase 3 clinical trials for COVID-19 herbal medicine
A COVID-19 herbal medicine has gained approval by WHO for phase 3 clinical trial.
The World Health Organization (WHO), in collaboration with the African Centre for Disease Control and Prevention and the African Union Commission for Social Affairs, has approved a protocol for phase 3 clinical trials of herbal medicine for Covid-19.
The Regional Expert Committee on Traditional Medicine for Covid-19, which was formed by the 3 institutions, while giving the approval also endorsed a charter and terms of reference for the establishment of a data and safety monitoring board for herbal medicine clinical trials.
The Director Universal Health Coverage and Life Course Cluster at WHO Regional Office for Africa, Dr Tumusiime, said, “Just like other areas of medicine, sound science is the sole basis for safe and effective traditional medicine therapies. The onset of COVID-19, like the Ebola outbreak in West Africa, has highlighted the need for strengthened health systems and accelerated research and development programmes, including on traditional medicines.’’
The technical documents that were approved are aimed at empowering and developing a critical mass of technical capacity of scientists in Africa to conduct proper clinical trials to ensure quality, safety and efficacy of traditional medicines in line with international standards.
This appears to add to the global effort to develop vaccines for the coronavirus disease, which are at different trial stages. The WHO had disclosed that there are well over 100 Covid-19 vaccines currently under development across the globe with about 8 of them at the phase 3 trial stage.
The phase 3 clinical trials are quite crucial in fully assessing the safety and efficacy of a new medical product. The data safety and monitoring board will ensure that the accumulated studies data are reviewed periodically against participants’ safety.
The late-stage trial will also make recommendations on the continuation, modification or termination of a trial, based on evaluation of data at predetermined periods during the study.
Dr Tumusiime explained that if a traditional medicine product is found to be safe, efficacious and quality assured, the WHO will recommend for a fast-tracked, large-scale local manufacturing. The WHO also noted that through the African Vaccine Regulatory Forum, there is now a benchmark upon which clinical trials of medicines and vaccines in the region can be assessed and approved in less than 60 days.
The Expert Committee Chairman, Professor Motlalepula Gilbert Matsabisa said, “The adoption of the technical documents will ensure that universally acceptable clinical evidence of the efficacy of herbal medicines for the treatment of COVID-19 is generated without compromising the safety of participants.”
The 25-member Regional Expert Advisory Committee on Traditional Medicine for Covid-19 was mandated to support countries to improve on research and development of traditional medicine based therapies against the virus.
It is to also provide guidance on the implementation of the approved protocols to generate scientific evidence on the quality, safety and efficacy of herbal medicines for Covid-19.
FG says international passengers must be tested by private labs 7 days after returning
The directive is aimed at early detection of the virus and reducing the risk of its further transmission.
The Federal Government has announced that all returning international passengers must be tested by a certified private laboratory after 7 days, on returning to the country.
This disclosure was made by the National Coordinator of the Presidential Task Force (PTF) on Covid-19, Dr. Sani Aliyu, during the briefing of the task force on Thursday, September 17, 2020.
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He said that it was to enable early detection of the coronavirus disease and reduce the risk of its further transmission.
Dr. Aliyu stated, “To enable early detection and reduce the risk of further transmission based on data and our current laboratory capacity, all incoming travelers must be tested by a certified private laboratory after 7 days of returning to the country.
And there are only three criteria for these private laboratories to get on to the portal. Firstly, they have to be licensed through the Medical Laboratory Science Council of Nigeria. Secondly, they must have undergone a process of validation and optimization by NCDC, and then thirdly, they must be accredited by the state government because their results will feed into the state numbers.’’
He said that the Federal Government had already reached out to states, urging them to work with the private laboratories within their areas and come up with the list of accredited laboratories that were able to meet those requirements.
Although Dr. Sani Aliyu revealed that at the moment, they only had portals for Lagos and Abuja, he said there were arrangements with the laboratories serving these areas to be responsible for collecting samples for passengers outside Lagos and Abuja.
He also noted that they were working very hard to open up more private laboratories across the rest of the country. He said that the government believed that as more laboratories get registered and came on to the portal, it would be easier to continue to push down the cost of PCR test.
All incoming travellers must be tested by a certified private laboratory after seven days of returning to the country. – Sani Aliyu, PTF National Coordinator.#PTFBriefing #COVID19Update#COVID19 pic.twitter.com/bImya7abxo
— Channels Television (@channelstv) September 17, 2020