FEC approves N30.77bn projects for transportation, Aviation, FCT, Power

By admin

THE Federal Executive Council, FEC, had approved various ranges of contracts worth over N30.77 billion for infrastructure projects across five ministries.

The virtual Council meeting was presided by Vice President Yemi Osinbajo at the Council Chamber, Presidential Villa, Abuja yesterday with about seven Ministers physically present.

The ministers who addressed journalists included the Minister of Information and Culture Alhaji Lai Mohammed; Minister of Power, Engr. Mamman Saleh; Minister of Aviation, Senator Hadi Sirika; Minister of Finance, Budget and National Planning Mrs Zainab Ahmed; and the Minister of the Federal Capital Territory (FCT), Mallam Mohammed Bello.

The Minister of Power, Engr Saleh, while briefing State House correspondents said his ministry presented two memoranda to Council, which cumulated to a total sum of N10,730,393,742, adding that they were both approved.

According to him, “One, it approved the payment of the claims and the variation of onshore and offshore cost of the existing contract for the construction of 1×1 50 MBA three 31, 32, 33 KV sub-stations at Damaturu and 1×330 KV land by extension at Gombi in favour Msssr Kadlak International Limited in the sum of $1,621,423.88 cents plus N102,905,606.7.

“The other one is the approval of the contract for the design, manufacturing and supply of four fabricated sub-stations of 2×100 MBA 132 33 KV power transformers with complete accessories for deployment to Damaturu, Potiskum, Biu, and Maiduguri for the Transmission Company of Nigeria (TCN) in favour of Msssr Kidon T Good Electric Company Limited and Incomtel Engineering Limited in the sum of $24,387,850.22 cents plus N1,475,204,584.34. Altogether, it is N10,730,393,742.82”, he said.

Also briefing, the Minister of Aviation, Hadi Sirika, said Council, approved the sum of N10,594,057,618.20 inclusive of VAT 7.5 percent for the provision of Airport Management Solution for the international airports of Abuja, and that of Lagos and Kano, Port Harcourt and Enugu. It is awarded the contract in favour of Messrs Arlington Securities Nigeria Limited, for the completion period in 12 months.

On his part, the Minister of Transportation, Rotimi Amaechi, who was represented by Alhaji Mohammed, said he presented five memoranda to Council, all of which were approved.

He said five memoranda, which touched on both the rail and maritime sectors of the ministry’s purview, got contracts cumulating to a total of N7.038 billion.

“The third memo is one seeking Council’s approval for the award of contract for the design, manufacture testing and commissioning of two power cars to be used on the narrow gauge by the Nigerian Railway Corporation, in favour of CRC Niginc Pozen Limited, at a sum of N1.662 billion.

“There’s another memo by the Minister of Transportation, which sought Council’s approval for the award of contract for the removal of wrecks along the Badagry Creek from Tincan Island to Navy Town Lagos State, in favour of Messrs Humba Marines Works Nigeria Limited, in the sum of N3,587,955,266.40 and it’s supposed to be completed within 25 months. This contract will benefit the National Maritime Administration and Safety Agency”, he said.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed said the council approved the sum of N316.5 million for the second phase of Project Lighthouse, aimed at debt recovery.

Ahmed explained that, “Project Lighthouse is a data engine that collects, integrates and analyses data from revenue generating agencies in order to create insightful information for improved decision making.

“Messrs Carter House Consulting, a Nigerian technology company, who has worked with the ministry for three years, won the first phase of the contract in May 2019 and the second phase that is approved today is in the sum of N316.5 million.

The FCT Minister, Mohammed Bello said council also approved two memos for the territory.

He said, “The first memo is the approval for the contract for the provision of engineering infrastructure to a section of Asokoro District known as Abubakar Koko Street.
“This contract was approved for Datum Construction Nigeria Limited at a contract amount of N686,796,482.14 and it has a completion period of six months.

“The second contract approved is the contract for the construction of a 14.7 kilometre dedicated power line from the existing newly completed Kukwaba 132/33kv transmission station in Kukwaba District of Abuja.

“This is at the sum of N1,398,901,681.27 and awarded to Messrs Olivec Ventures Nigeria Limited and for a completion period of 12 months.”

The Suez Canal blockage – lessons to learn

By admin

Insurers have been warning for years that the increasing size of vessels is leading to a higher accumulation of risk when something goes wrong. These fears are now being realized, with the MS Ever Given having blocked the Suez Canal for several days. Luckily, the giant vessel was refloated and freed but global shipping logistics and supply chains will likely feel the impact for weeks to come. Rahul Khanna, Global Head of Marine Risk Consulting, at Allianz Global Corporate & Specialty looks at what lessons can be learned from this incident.

 Is there more clarity on what has caused the grounding of the MS Ever Given in the Suez Canal?

This is still to be investigated. Most reports note that the vessel ran aground after being caught in strong winds and a sandstorm that caused poor visibility and made it difficult to navigate, although human error or machinery breakdown can also not be ruled out at this stage.

Wind can cause problems for fully-loaded ultra large container ships, given the height of the container stacks, providing an extensive so-called ‘windage area’ compared to other ship-types. Cross winds can easily cause small deviations in a vessel’s course, which can bring issues in a relatively narrow waterway such as the canal. The bigger the vessel, the smaller the margin for error. The “bank effect” could have also played a role in the grounding where a suction effect towards the banks of a narrow canal is experienced by a large vessel. However, we have to wait for the findings of the official investigation to determine the root cause of this incident. Most modern merchant vessels carry a Voyage Data Recorder. And the download of this will be critical so that we understand what factors resulted in a serious marine casualty and what we can do in the future to prevent a recurrence. It is important at this stage to not speculate on the cause.

 What are the some of the risks that accompany increasing ship sizes?

Such ships generate economies of scale for ship owners but the flip side is that there is disproportionately greater cost when things go wrong. Dealing with incidents involving large ships, such as fires, groundings and collisions, are becoming more complex and expensive.

Stacking containers higher on these ships also makes them more susceptible to strong winds, which may have been a factor in recent incidents when cargo has been lost during bad weather. At least five ultra-large container vessels lost containers during the most recent winter storm season in the Pacific.

Fires on board large container vessels are now a regular occurrence and such incidents can easily result in large claims in the hundreds of millions of dollars, if not more. It took salvage teams almost a week to dislodge the Ever Given but other salvage operations involving large vessels have taken much longer than this to resolve. The size of the vessel significantly increases salvage and general average costs. Mega ships require specialist tugs to be refloated and finding a port of refuge with capacity to handle such a large ship can be difficult. For some time now, many in the salvage industry have warned that container ships are getting too big for situations like this to be resolved efficiently and economically.

Is the MS Ever Given incident a wake-up call for the industry? How can risk management and safety be improved?

First of all it is important to note that a waterway such as the Suez Canal has a good safety record overall. Around 19,000 ships travel through this waterway every year and over the past decade there has only been an average of eight incidents a year.

It is also important to note that the shipping industry has also seen a long term improvement in its safety record over the past decade too, driven by improved ship design and technology, stepped-up regulation and risk management advances such as more robust safety management systems and procedures on vessels.

Having said that, there is no doubt that this incident will encourage future learnings. 24,000 teu container ships are now on the seas. The insurance industry has always supported the development of the shipping industry providing ship-owners are taking into account the risks that accompany any increase in size. Building ships for just economies of scale is not enough.

We need to look more closely at how we can minimize the risks of mega-ships, especially in ports or in bottleneck passages like the Suez Canal or the Panama Canal, given the disruption we have seen that grounding incidents can cause. If a ship runs aground in one of these waterways, specialized tugs would be needed and the port and canals should have access to adequate resources in relatively short time. There may be valuable lessons to be learned around pilotage in such waterways especially when it comes to mega ships. As an example it may be best to put additional restrictions on mega ships entering very narrow stretches of canals based on certain weather conditions. That is why it is so important the VDR is studied so we can understand, what was the root cause of this incident and can establish how best to prevent it happening in future.

Of course there are other risk for mega ships other than groundings. Insurers such as Allianz and the International Union of Marine Insurance (IUMI) have long warned of safety concerns surrounding fires on large container vessels, promoting improved ship design and fire-fighting equipment to prevent and extinguish fires. It should be the industry standard that any vessel, including an ultra large container ship should have the capability built into its design to tackle most on board fires themselves. It is very clear in many cases that this is not currently the case.  As part of a working group with IUMI on this issue we have submitted a list of recommendations to the International Maritime Organization that we hope will ultimately lead to regulatory change that will improve fire-fighting capabilities on board.

Will it become more expensive or even impossible to insure mega ships?

As a shipping insurer we want to support the industry and its growth. As mentioned before, we have nothing against ships getting bigger but all the additional aspects that come with this increase in size need to be considered from a risk management perspective. For many years regulations have not kept pace with the growth of vessels and regulatory modernization is urgently needed to ensure container vessels are sustainable and safe. We expect the shipping industry to comply with the rules for safe operations on board and to continuously work on improving safety. The coronavirus pandemic is putting further pressure on maintenance cycles and margins are under strain, but we shouldn’t compromise on safety standards. We all need to think in more innovative ways.

Ojumah attributes FBNInsurance’s best life insurance to investment in technology, service delivery

By Favour Nnabugwu
The Managing Director of FBNinsurance, Mr. Val Ojumah has attributed the company’s emergence as winner of World Finance best insurance to utilisation of technology in service delivery.
Ojumah who was elated by the company’s continuous winning for the 5th time, said FBNInsurance invested heavily on technology platforms.
“We are happy to have won this award for the 5th time running especially during this pandemic which have impacted the way we work, shop and generally live”.
“FBNInsurance has invested and stepped up its technology platforms to meet the ever-changing needs of the customer at this time,” he said.

A statement obtained on the organisers’ website about the awardees: “The winners of this year’s World Finance Insurance Awards are the organisations most able to adapt to the new environment and help forge the future of the industry in their respective countries”

“This year the World Finance Insurance Awards showcases the businesses that are best equipped to handle the environment and expectations that are accompanying our new COVID-normal world. This means much more than just financial discipline. All businesses need to be leaders, but insurance companies need to be moral touchstones given the critical role they will play in the months and years ahead.”

Established in 2007, World Finance has celebrated achievement, innovation and brilliance in Business through their annual awards.

FBNInsurance is a member of Sanlam Group, a leading diversified pan-African financial services group with businesses across 42 countries globally.

Assets Under Managent increases to N12.30trn in Jan 2021

By Favour Nnabugwu

Assets Under Management (AUM) of the regulated pension industry increased by 17.9 percent to N12.30 trillion (USD31.2billion) at end of January 2021.

In the National Pension Commission latest report, the asset mix remained heavily skewed towards FGN securities, which represented 65.9 percent of the total.

The corporate debt market has grown from a small base with some high-profile new issues. Holdings rose by 28.2percent in the year to N836bn in January.  When we add state government and supranational issuance into the mix, we find fixed income exposure equivalent to 73.8 percent of the industry’s AUM.

Pencom’s Kenyan counterpart, the Retirement Benefits Authority, shows total AUM of KES1.32trn (USD12.4bn) at June ’20: there was sizeable exposure to immovable property (18.6 percent) and listed equities (14.2percent) alongside the largest share in government securities (44.0percent).

The holdings of FGN paper are predominantly the bonds, which represented 59.6 percent of total AUM. This was an increase of four percentage points in just one month. In a year, the share of NTBs has collapsed from 15.2 percent to 5.4 percent

The share of domestic equities rose from 5.7 percent to 7.5 percent over the twelve months, and members’ holdings by 54.6percent to N920bn. Over the period the all-share index (ASI) increased by 47.0 percent.

The ASI was still in negative territory ytd at the start of October ’20 and closed the year with a thumping gain of 50.0 percent, making it the best performing index.

One driver was the noted shift by PFAs into equities as returns on first NTBs and then FGN bonds crashed in November and December. At that point, the dividends paid by a good number of blue-chip listed companies offered a better return than FGN paper.

While we have a plausible explanation for the surge on the ASI in Q4 ’20 we now have to prepare for the consequences of a retracement in yields on FGN paper. For the year,  the yield has recovered from below 1 percent in December to above 6 percent, and for the longest maturity FGN bond (Mar ’50) from less than 7 percent to about 11.5 percentover the same timeframe.

The average value of a retirement savings account (RSA) at end-January was N1.03m, marginally higher than the previous month.

Just N81m was invested at end of January in the newest RSA fund (no V), which has been created for micro pensions. It has been in operation since January  2020.


Curacel, Start-up firm help insurers raise $450k

By admin

Curacel, a Nigerian startup that builds technology to power insurance companies, has raised $450,000 in a pre-seed funding round..

Curacel lists AXA Mansard, Liberty Health, Old Mutual and a few other insurance companies across Africa among its clients, and intends to be present in 10 African countries by the end of 2021 using the money it has raised

The startup has been in existence since 2018 and bills itself as a leading claims and fraud detection platform in Africa, helping insurance companies track fraud, waste and abuse in their businesses. Their solutions cover health, travel and auto insurance

Curacel’s co-founder and CEO, Mr. Henry Mascot defines the company’s vision as “improving insurance inclusion across Africa.”

They are driving that mission by deploying cloud-based tools and APIs to ensure that insurance companies operate efficiently.

That means helping such companies only pay claims for the correct treatment, appropriate medications and recommended patient therapies.

Curacel has helped their clients reduce fraud, waste and abuse claims payouts by up to 25 percent and saved them a total of $320,000, according to information on their website. They also claim to have processed more than 700,000 claims and have the capacity to process an infinite number.

Curacel’s pre-seed round was led by Atlantica Venture and Consonance with participation from Kepple Ventures and other African angel investors.

“The African insurance market represents a significant growth opportunity and we are delighted to be partnering with Curacel to drive growth in this sector,” says IK Kanu, Partner at Atlantica Ventures.

“There is an opportunity to create an entirely new market of products and services here and we look forward to supporting the team to improve health outcomes across the continent.” ,

Managing Partner at Consonance, Mobolaji Adeoye echoed Kanu’s thoughts, saying Curacel “has what it takes to be market leaders.”