14 PFAs gearing up to complete N5bn recapitalisation

By Favour Nnabugwu


Fourteen Pension Fund Administration are on the verge of completing the recapitalisation from N1billion to N5billion as stipulated by the National Pension Commisdion.

Only 8 out of the 22 Pension Fund Administrators (PFAs) in the country have recapitalized from to N5 billion

PenOp’s Chief Executive Officer, Oguche Agudah, who made this known at a virtual event tagged: ‘Beyond Capital – A Recapitalisation Strategy Workshop for Pension Operators’ organised by PenOp.

Agudah as saying that the operators have been working assiduously to comply with the recapitalisation mandate issued by PenCom in April this year.

Oguche Agudah, CEO, PenOp
He expressed optimism that other operators would meet the mandate before the deadline issued by PenCom.

Agudah stated that the recapitalisation would help strengthen the industry’s operators, adding that PenOp’s corporate strategy would have been met, when the PFAs achieve their set target.

PenCom said it increased the shareholders’ fund of PFAs from N1 billion to N5 billion to boost their capacity in terms of operational efficiency and service delivery.
PenCom stated this in a circular entitled: Revised Minimum Share Requirement for Licensed Pension Fund Administrators (PFAs), dated April 29, 2021 and sent to managing directors/chief executive officers of all licensed pension fund operators.

“The increase in the minimum regulatory capital is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery,” PenCom stated.

The pension sector regulator noted that its board also approved a 12-month transition period, effective April 27, 2021, within which PFAs are to meet the new minimum capital.

“The board of the commission at its 48th meeting on April 27, 2021 approved the increase of the minimum regulatory capital (shareholders’ fund) requirement for PFAs from the current N1billion to N5 billion, unimpaired losses,” it said.

World Bank says 5.6 million Nigerians will fall into poverty due to high inflation

By Favour Nnabugwu


The World Bank has said that the drivers of Nigeria’s inflation rate are unique to the nation alone as it differs from what is experienced in other parts of the world. The report also claimed higher inflation could send about 5.6 million Nigerians into poverty.

“Admittedly, higher inflation reduces purchasing power, translating into higher levels of poverty and, ultimately, insecurity. The IMF estimates that between 2020 and 2021, high inflation may drive 5.6 million Nigerians into poverty.”

In a recent Annual World Bank Group/IMF Meetings hosted by the Standard Bank Research Group, the World Bank Group’s Lead Economist for Nigeria and IMF’s mission team made the remark explaining that “Nigeria has one of the highest levels of inflation — but the drivers here differ from across the globe.” Nairametrics saw a copy of the Standard Bank Group report detailing the remarks.

Nairametrics has often reported that Nigeria’s inflation rate challenges are supply-side driven, caused mostly by issues such as insecurity, border closure, supply chain and logistic gridlocks, exchange rate volatility and other issues that are hard to solve with monetary policy alone.

They also blamed the border closure and food inflation as the main drivers of the rising inflationary trend recorded this year.

“Closed borders in Aug ’19 caused inflation to shoot up, mainly driven by food inflation and, while inflation has been trending lower since Mar ’21, it remains high due to FX liquidity difficulties, supply chain disruptions, and insecurity.”

The World Bank/IMF team also projected Nigeria’s annual growth at 2.6% for 2021 and 2.7% for 2022 citing that “Oil production should improve, with the oil sector expected to recover in the medium term.”

They spoke about other issues as well, such as Nigeria’s forex (FX) situation, fuel subsidy and Nigeria’s debt status. See highlights below

AIO president woos industry on market development

By Favour Nnabugwu


The Africa Insurance Organisation(AIO) has collaborated with the Nigerian Insurers Association (NIA) to build a strong market structure to benefit from African Continental Free Trade Area (AfCFTA).

The President, AIO, Tope Smart, on a courtesy visit to the association, said AfCFTA remains the market booster for the benefit of insurance consumers in the African market.

He stressed that there is a need for the Nigerian insurance market to upscale its digitisation programme to fast-track penetration.

According to him, the meeting with the Nigerian market is the beginning of AIO’s engagement with Key Markets in Africa to increase Insurance penetration in the region.

“As part of the engagement, we shall also be meeting with governments and regulators across the region to share with them their roles in market penetration, Smart added.”

He expressed his gratitude to the market for hosting a very successful conference.

He also applauded the market for their support at the investiture ceremony where he became the 47th President of AIO and vowed not to disappoint them.

Stakeholders laud PILA’s contribution to sector growth

Stakeholders in the insurance sector have applauded the Professional Insurance Ladies Association (PILA) for its contribution to the growth of the Nigerian insurance market.

The Commissioner for Insurance, National Insurance Commission, Sunday Thomas, spoke at the official commissioning of the multimillion-naira PILA House in Lagos, underscored the fact that women are taking up important space in leadership and doing a great job at it.

“Women are multipliers. Whatever you give to them they make it better, and as we have seen with PILA and this beautiful edifice, our women have taken charge and are doing great things. You will always have my support,” Thomas said.

Whilst delivering his speech as the Special Guest of Honour, Thomas acknowledged the visible support of the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, to the cause of the industry, stating that the action underscores the disposition of the Lagos State government towards insurance.

Olowo on his part reiterated the importance of insurance to the Lagos State Government, which he said was why the state government is making insurance culture in the State.

He commended the association on their efforts for the insurance industry and that they could count on the support of the Lagos State Government at all times.

President of PILA and the Managing Director/Chief Executive Officer, African Alliance Insurance Plc, Joyce Ojemudia, appreciated the staunch support of the entire Forthright Ladies. “This beautiful edifice is the culmination of many years of planning, pushing and belief.

She paid homage to the forebears whose efforts were instrumental to the building: Oluyomi Onabanjo, who championed the purchase of the landed property upon which the Secretariat stands; Funmi Folarin, who set up a Building Fund committee that saw to the foundation laying and the late Executive Vice Chairman of IGI, Remi Olowude, who helped the association raise substantial funds which was the seed money with which the foundation of the building was laid in 2012.

Nigerian banks’ credit to private sector rose by N4.1tn in one year –Report

By Favour Nnabugwu


Nigerian banks extended a cumulative credit of N4.1tn between September 2020 and September this year, representing an increase of  13.8 per cent within the review period.

According to the Money and Credit Statistics report of the Central Bank of Nigeria (CBN),in September 2020, bank’s credit to the private sector stood at N29.7tn but rose to N33.8tn in September this year.

In October 2020, the sector’s debt to banks fell to N29.1tn, but climbed by N300bn to N29.4tn in November.

The total value of credit provided by banks to the sector rose to N30.4tn in December and N30.6tn in January 2021 but fell by N100bn in February to N30.5tn.

Lending to the private sector rose to N31.4tn in March, N31.9tn in April, N32.1tn in May and N32.6tn in June.

The credit to private sector rose from N32.8tn in July to N33.4tn in August.

In a bid to drive lending to the real sector, the CBN had in 2019 directed all banks to maintain a minimum of 65 per cent Loans-to-Deposit Ratio by the end of December 2019

The apex bank had noted that the improvement in lending to the real sector followed the introduction of the 65 per cent LDR.

According to The Punch, in his personal statement at the last meeting of the Monetary Policy Committee of the CBN in September, a professor of Economics, University of Ibadan, Adeola Adenikinju, said many sectors of the economy and households benefitted from the increased credit.

“The various interventions by the central bank is providing a boost to personal consumptions and economic growth,” he added.

The Deputy Governor, Economic Policy, CBN, Kingsley Obiora, also attributed the rise in credit to private sector to the LDR policy.

He said, “The increased credit was recorded in manufacturing, consumer credit, general commerce, information and communication and agriculture.

“The credit growth was driven by the LDR policy, the extension of regulatory forbearance and other macro prudential measures.”

The Punch also reported that an economist and Senior Lecturer of Economics at the Pan Atlantic University, Dr Olalekan Aworinde, said while the rise in credit to the real sector was commendable, significant impact and growth in the sector would be reliant on how the funds provided were utilised.

He explained that allowing the sector to bear the cost of basic infrastructures such as roads and electricity would significantly deplete the funds available for production.

He, therefore, called on the government to support the interventions of the banking sector by providing critical infrastructure and implementing interventions in the private sector.

Aworinde said, “If you look at the credit to private sector, you will understand that the banks provide these loans to them to boost output.

“The issue there is that the credit is important, but what the funds are used for is most important. Looking at the private sector, majority are high-cost producers – meaning that majority of these firms have to provide their own roads, electricity and water.

“When all these infrastructures are not in place, you will discover that you will see little impact in the sector. So, in a nutshell, the growth is a step in the right direction but the spending pattern of those who receive the credit and the interest rate of these loans are critical.”

Meanwhile, credit to the government rose by N3.43tn within the same period. The banking sector’s credit to the government rose from N9.6tn in September 2020 to 13.03tn in September 2021, according to the CBN.