Over 38,518 moved RSA to another PFA

By Favour Nnabugwu

 

Over 38,518 workers moved from one Pension Fund Administrators, PFAs to anotherr PFAs and transferred N148.11bn in their Retirement Savings Accounts within one year.

The National Pension Commission revealed this in a report titled ‘Quarterly summary of Retirement Savings Accounts transferred by Pension Fund Administrators’.

PenCom according to the report said 12,681 workers transferred N47.78bn in the first quarter of 2021, compared to 2,799 workers who transferred N18.90bn in the same period of 2020.

The Commission stated thst 12,872 workers transferred N45.56bn in Q3 2021, up from 10,166 workers who transferred N35.89bn in Q2 2021.

According to PenCom, Section 13 of the Pension Reform Act 2014 empowers an RSA holder to transfer their RSA to any PFA of choice, not more than once a year.

“Effective transfer of RSAs from one PFA to another requires an accurate and reliable database as it is important to ensure that the pension assets transferred belong to the bona-fide RSA holders initiating the transfers,” it said.

PenCom noted that the opening of the RSA transfer window was delayed to ensure that robust IT infrastructure that would drive the process was put in place.

It said the process was finalised in June 2019 with the deployment of an enhanced contributor registration system for the pension industry.

The pension regulator said the ECRS incorporated extensive validations, controls and data requirements that would deliver high data integrity standards for the pension industry.

It said the upgrade of RSA holders’ details to meet the ECRS standards was, therefore, a prerequisite for RSA transfers.

Those who registered with various PFAs from inception of the Contributory Pension Scheme to June 2019 were required to get recaptured, it added.

Lanre Idris is Leadway Pensure MD

By Favour Nnabugwu

 

Foremost pension fund administrator in Nigeria, Leadway Pensure PFA Limited, has announced the appointment of Lanre Idris as its new Managing Director, heralding a new era in the company’s history.

This appointment follows the recent retirement of Ronke Adedeji, the erstwhile Managing Director, who steered the ship of the organisation for over a decade.

Foremost pension fund administrator in Nigeria, Leadway Pensure PFA Limited, has announced the appointment of Lanre Idris as its new Managing Director, heralding a new era in the company’s history.

This appointment follows the recent retirement of Ronke Adedeji, the erstwhile Managing Director, who steered the ship of the organisation for over a decade.

Ethiopian Airlines to resume using Boeing 737 MAX planes in February

By Favour Nnabugwu

 

Ethiopian Airlines plans to resume flying Boeing 737 MAX planes on its fleet in February 2022, saying it was satisfied with their safety, according to its chief executive.

In 2019, Ethiopian Airlines flight 302, a Boeing (BA.N) 737 MAX bound for Kenya, crashed six minutes after takeoff from Ethiopia’s capital Addis Ababa, killing all 157 passengers and crew.

“Safety is our topmost priority …. and it guides every decision we make and all actions we take,” Tewolde Gebremariam said in a statement.

“We have taken enough time to monitor the design modification work and the more than 20 months of rigorous rectification process…our pilots, engineers, aircraft technicians, cabin crew are confident on the safety of the fleet.”

The best-selling, single-aisle airplane, which was grounded worldwide after two crashes killed 346 people in the space of five months, returned to service in late 2020

FG clears N16.67bn accrued pension rights for 2021 retirees

By Favour Nnabugwu

 

The Federal Government has released N16.67 billion for the payment of accrued pension rights to 2021 retirees of Treasury-funded Ministries, Departments, and Agencies (MDAs), under the Contributory Pension Scheme.

This was disclosed by the management of the National Pension Commission (PenCom) in a statement issued Wednesday in Abuja

“The National Pension Commission (PenCom) is pleased to announce the release of N16.67 billion by the Federal Government for the payment of Accrued Pension Rights to 2021 retirees of Treasury-funded Ministries, Departments, and Agencies (MDAs).

“The Federal Government had earlier settled all arrears of accrued pension rights payments to the verified and enrolled retirees up to December 2020”, said the National Pension Commission.

Also, the PenCom had received early this year the approval of President Muhammadu Buhari to pay outstanding pension liabilities of retirees of Treasury-funded Federal Ministries, Departments, and Agencies (MDAs).

This was sequel to PenCom’s submission to the President on the payment of some critical aspects of the outstanding pension liabilities of the Federal Government under the Contributory Pension Scheme.

Specifically, the President approved payment of outstanding accrued pension rights for verified and enrolled retirees of treasury-funded MDAs that retired but were yet to be paid their retirement benefits, as well as the backlog of death benefits claims due to beneficiaries of deceased employees of treasury funded MDAs.

Approval was also given for payment of 2.5 per cent differential in the rate of employer pension contribution for FGN retirees and employees which resulted from the increase in the minimum pension contribution for employers from 7.5 per cent to 10 per cent in line with Section 4(1) of the PRA 2014.

CBN defends Naira with $2.1bn to halt further depreciation

By Sandra Adesiyan

 

In an effort to keep the Naira from crashing further the Central Bank of Nigeria(CbN) pumped $2.1 billion to the Investors and Exporters (I&E) window of the foreign exchange market in the first seven months of 2021.

The amount was an increased by 238 percent when compared with the $621.1 million injected to defend it in the same window in in the corresponding period of 2020 (7mths-2020).

It also represented a 47 percent increase when compared with the $1.43 billion injected in the first 7 months of 2019.

These figures were obtained from CBN’s monthly economic report published on its website.

According to CBN data, the highest amount injected this year was $474.65 million in April while the lowest amount of $195.91 million was recorded in June.

While the intervention helped keep Naira hovering around N412 to 414, it came at a cost of depleting reserves that was replenished with debts.

You will recall that last month, Vice President Yemi Osinbajo called on the Central Bank of Nigeria to allow market forces control the exchange rate.

He said: The real issue confronting the economy on this matter is how to improve the supply of foreign exchange, but this will not happen if we do not allow mechanisms like the Importers and Exporters window to work. If we allow this market mechanism to work as intended, we will find that the Naira will appreciate against the dollar as we restore confidence in the system.”

Although CBN had adopted the flexible I & E window as its official exchange rate, it remained the single source of dollar supply thereby having a significant influence on how the market turns out daily.

Afrinvest Foresees 15% Growth for Banking Sector in 2022, Cautions FG on Debt

By admin

 

Analysts at Afrinvest (West Africa) Limited have projected that the Nigerian banking sector which has remained resilient amidst the pandemic would grow by 15 per cent next year.

In the same vein, the research and investment company has called for more banks to merge in the sector, noting that the tier one banks – Access Bank, Zenith Bank, GTBank, First Bank, United Bank for Africa – presently control approximately 70 per cent of banking activities.

The Deputy Managing Director, Afrinvest West Africa Limited, Victor Ndukauba, said this yesterday, while unveiling the Lagos-based firm’s 2021 Nigerian Banking Sector Report titled, ‘Resilience Amidst Endemic and Pandemic Constraints.’

Speaking on the banking sector and its outlook, he said: “The banking sector saw a dip in 2018, obviously following a cut back by banks, who are trying to contain the operation from the effect of the recession of 2016, that sort of spilled over into 2017. But otherwise, it’s been growth consistently.

“Tier-one banks accounting for a sizable portion of the total assets. From what we estimate for year 2021, we think includes that nearly N25 trillion loans, up 24 per cent on last year’s numbers, and we expect a further 10.3 per cent growth into 2022.

“Also, the total industry deposits, we can see that we’ve gone from N17.8 trillion in 2016, and expect to close 2021 at N46 trillion and with a projection of 8.4 per cent growth will take us to about N50 trillion by the end of 2022.

“Again, consistent with the other two metrics, you see that the tier one banks continue to control a significant portion of the industry, business and you know, balance sheet.”

He added: “So, I guess what has to be said clearly is that there is some value to consolidation and scale clearly, because when we look at shareholders’ funds, which is essentially the value that has been created by these banks for shareholders over time, you can see that again, tier one banks continue to be the dominant force here nearly 70 per cent of the industry in value creation.”

Also, Ndukauba, in his presentation noted that the current rate at which the federal government was borrowing was not sustainable. He noted that the federal government’s borrowing had tripled by five times in the past five years since the beginning of this administration.

He said: “Revenues have underperformed by these 30 per cent, the income from oil and gas has worsen, at 44 per cent, non-oil income is up slightly at four and a half percent, while independent revenues up 10 per cent and government owned enterprises down nearly 62 per cent. So on the revenue side, clearly, there is a challenge. We’re not tracking what was planned or expected.

“So, in order to keep up with the significant ramp up in spending, the government has had to obviously do a lot more in terms of borrowings, as well as something here that is captured as ways and means which is effectively the central bank providing liquidity in the form of lending or just a stopgap measure to help plug water the shortfalls.

“And what we can see clearly is that we have a rising debt situation. So aggregate debt N16.8 trillion as of 2016, but between then, and now we’re almost at three times that level, with a total of nearly N48 trillion.”

He noted that the debt service ratio which also grew from 45 per cent in 2016, to 83 per cent, was unsustainable.

He added: “We can see that we’ve gone from debt service ratio of about 45 per cent in 2016, to 77 per cent based on our estimates for 2021. Those numbers are higher in 2020 at nearly 83 per cent. So what it means is that for every naira or revenue you’re spending nearly at 80k to service debt. Clearly that is not sustainable.”

In his keynote address at the event, Partner & Chief Economist, PwC Nigeria, Andrew Nevin, noted that the Nigerian economy was stable and predicted sustained growth.

He said: “I have never been more optimistic about Nigeria in the 13 years that I’ve been here than I am today. Despite the fact that every one of us is well aware of all of the challenges in the country in the last two or three years, I’m optimistic and confronted by incredible things going around the country that aren’t necessarily seen by the official statistics.”

In his contribution, the Chief Executive Officer, Centre for the promotion of Private Enterprise (CPPE), Dr. Muda Yusuf noted that manufacturers were still constrained by access to foreign exchange.

He said, “The bigger issue of manufacturers as well as investors of the real economy is the FX issue because even for some manufacturers who had access to the CBN facility, they could not access foreign exchange to utilise the facility and so it is affecting everything. Secondly the issue is the illiquidity in the foreign exchange market.”

Muftau Oyekunle, CIIN President’s speech @ Directors conference

ADDRESS BY SIR. MUFTAU OYEGUNLE, PRESIDENT/CHAIRMAN OF COUNCIL, CHARTERED INSURANCE INSTITUTE OF NIGERIA, DURING THE 2021 INSURANCE DIRECTORS’ CONFERENCE HELD ON THE 24TH OF NOVEMBER, 2021 AT RADISSON BLU HOTEL, IKEJA.

PROTOCOLS

It is my utmost pleasure to welcome you to the 2021 Insurance Directors’ Conference. The theme for this event “Insurance Industry in a Changing World” is a theme that cannot be over flogged.

On daily basis, we see signs of the changing world around us. Political and business leaders all over the world gather regularly to discuss the way forward. A radical transformation triggered by the events which took place in the immediate past years has changed the business world and life in general as we used to know it. Countries and organizations’ have woken up to the fact that there is no set date, time, or place for disruption to occur. All businesses are proactively retooling their operations to ensure adequate protection against the unknown future.

It is impossible to talk about the changing world of insurance or even the financial sector in general, without talking about Artificial Intelligence. AI is fast becoming the order of the day as organizations seek to build leaner but more effective teams. Every business firm in the 21st Industry must leverage on technology to simplify its business strategies and processes especially now that the pandemic has forced business executives to do things differently.

The future that AI promises for insurance is a series of touch less processes from premium collection through the entire value chain until claims processing. This is evident by the numerous startups, as well as IT and insurance giants massively investing and offering increasingly innovative new solutions. It is imperative for market stakeholders to be at the cutting edge of technology and to equip themselves with the appropriate tools required for performance. The purpose of insurance is to enable risk-taking, support economic growth, encourage innovation and ultimately to enhance the resilience of the society and economy.

Consequently, there is a need for us as individuals, professionals, and organizations to aggressively equip ourselves with skills and knowledge that would ensure we have the best assets. This implies that we must groom world class manpower for improved performance and growth of the industry. With the increasing digitalization and ‘low touch’ system where human input is at its minimal, professionals need to meet the emerging demands for specialized skills.

Furthermore, continuous customer engagement cannot be overemphasized as this not only builds trust but puts the insurer in the face of the customer. Typically, insurance products and services are perceived as offerings that do not require constant meeting with clients except at major events such as customer acquisition, claims registration and policy termination. While it is vital to make these moments rancor free, it is equally important to provide more customer interaction channels to facilitate effective service delivery to clients. A good starting point should be the provision of basic knowledge on insurance and its operations to consumers. Awareness is a militating factor in the growth of Insurance.

The Chartered Insurance Institute of Nigeria (CIIN) as the premier professional body caters for insurance professionals through the provision of skills and knowledge required to deliver excellent performance in their organisation. Ultimately, our members become growth drivers within the industry.

The CIIN in furtherance of its statutory responsibilities established the College of Insurance and Financial Management (CIFM) which currently is pivotal in manpower development in the Nigerian insurance industry at all levels. This was achieved by the provision of in-depth training in insurance, financial management and marketing thereby creating an expert driven resource pool from which the industry benefits.

On behalf of the Council of the CIIN, I wish to express our happiness and support for this well packaged event organized by the CIFM in collaboration with the regulator, NAICOM in pursuance of the mandatory learning and training for directors in insurance organizations. The quality of speakers lined up today is quite reassuring of the impactful and insightful experience that this conference would deliver.

I therefore seize this opportunity to appreciate NAICOM on two fronts. First, for providing this platform annually to help members of the board of insurance organizations to refocus on their very important role of running ethical, profitable, and sustainable insurance organizations. Secondly, for the continued confidence in the CIFM and its ability to always deliver quintessential training events.

Beyond technology and knowledge however, we need to bridge the existing gap between various stakeholders in the industry if we must take this industry to the next level. Most of the challenges confronting us today require serious cooperation within the industry and collaboration with other relevant stakeholders to move this industry forward. This is the main aspect of the changing world that we are not paying adequate attention to. I therefore challenge all the captains of the industry here present, to view this as the end of year challenge for all of us. The question begging for an answer is ‘How do we move this industry forward collectively in 2022 and beyond?

The penetration jinx needs to be broken so that the insurance industry can provide its crucial role in supporting individuals and businesses through mechanisms that facilitate resilience building for the economy at large while also making insurance profitable enough to justify the investment of shareholders.

On this note Ladies and Gentlemen, I welcome you all to the 2021 Insurance Directors’ Conference and wish you all a gratifying experience.

Thank you.

Sir. Muftau Oyegunle ACII, FIIN
President/Chairman of Council
Chartered Insurance Institute of Nigeria.

FG unveils 10-year validity passport facility in London

By Favour Nnabugwu

 

Miniter of Interior Ogbeni Rauf Aregbesola yesterday, commissioned a new Passport Issuing facility that would offer the 10-year validity Passport to Nigerians at the Nigerian High Commission in London, the United Kingdom.

With the facility, eligible applicants can now have access to a variety of options available on the enhanced e-Passport categories including: The five-year, 32-page Passport category; the five-year, 64-page category and the ten- year, 64-page category.

Speaking at the event, the Minister stated that the enhanced e-Passport is a great improvement of the standard e-Passport introduced in 2007 and that the enhanced e-Passport has more sophisticated security features making it one of the most secured Passports in the world.

The enhanced e-Passport he stressed, “comes in polycarbonate data page and with this, Nigeria is at the highest level of Passport security and integrity in the world”.

He assured government’s readiness to continue to provide Passports to eligible applicants without stress and within a reasonable period noting that efforts are being made to resolve all the problems associated with Passport administration and issuance across all Centres.

The Minister revealed that the Nigeria Immigration Service has issued a total of 2.7 million Passports to Nigerians in the past two years including the deployment of over 600,000 booklets, this year alone to address rising demand for the document.

He thanked the officials of the High Commission for their commitment to quality service delivery and urged for a deepened engagement with the diaspora population.

In his remarks, the acting Comptroller General of Immigration Service, Isah Jere Idris, affirmed the commitment of the Service to meet the rising demands for Passport services in London and advised prospective applicants to visit the Service’s official website (immigration.gov.ng) to apply and pay for the Passport category of their choice.

He enjoined those who have any complaints, to use available complaints channels to resolve any issues assuring that his Officers are professionals and would continue to deliver excellent services to our citizens.

The event was attended by the Nigerian High Commissioner to the United Kingdom, Ambassador Sarafa Tunji Isola, the Minister of Interior, the acting Comptroller General of Immigration, senior officials of the High Commission, a cross section of Nigerians in the United Kingdom and members of the diplomatic community.

Flour Mills buys First Bank’s stake in Honeywell

By Favour Nnabugwu

 

Flour Mills of Nigeria Plc and Honeywell Group Limited have announced the signing of an agreement for the proposed combination of FMN and Honeywell Flour Mills Plc.

The companies, in a joint statement on Monday, said Honeywell Group would dispose of a 71.69 per cent stake in its listed subsidiary to Flour Mills at a total enterprise value of N80bn.

Flour Mills announced in a separate statement that it had entered into an agreement with First Bank of Nigeria Limited to acquire the bank’s 5.06 per cent equity in Honeywell Flour Mills.

“Consequently, upon completion of the acquisition, and subject to obtaining all requisite regulatory approvals, FMN is set to hold a circa 76.75 per cent equity interest in Honeywell Flour Mills,” it said.

According to the joint statement, the proposed combination is subject to approval from the appropriate regulators.

“The complementary transaction combines FMN’s market-leading offerings that include grain-based foods, sugar, starches, oils, spreads and breakfast cereals with HFMP’s market leading diverse and differentiated range of carbohydrate products,” it said.

It said stakeholders would benefit from the more than 85-year combined track record of FMN and HFMP as well as their shared goal of making affordable and nutritious food available to Nigeria’s population.

Commenting on the transaction, the Managing Director, Honeywell Group, Obafemi Otudeko, said, “Today’s announcement is in line with the evolution of Honeywell Group and our vision of creating value that transcends generations. For over two decades, we have supported Honeywell Flour Mills to build a strong business with a production capacity of 835,000 metric tonnes of food per annum.

“Following the transaction, Honeywell Group will be strongly positioned to consolidate and expand its investment activities, including as a partner of choice for investors in key growth sectors.”

The Group Managing Director of Flour Mills of Nigeria, Omoboyede Olusanya, said, “The proposed transaction is aligned with our vision not only to be an industry leader but a national champion for Nigeria. We believe that this will create an opportunity to combine the unique talents of two robust businesses.

“As a result, we will have a better-rounded and more comprehensive skill set available to us as a combined diversified food business, thus enabling us to better serve our consumers, customers and other stakeholders, whilst providing employees with access to broader opportunities.”

Forex scarcity: Four banks borrow $6.21bn from foreign market in 10 months

Four Nigerian banks raised $6.21bn from foreign creditors between January and October 2021, in a bid to support their balance sheets with foreign exchange.

Access Bank Plc, Ecobank Transnational Incorporated, Fidelity Bank Plc and the United Bank for Africa Plc sought dollar liquidity through secure and unsecured notes, three of which listed their notes on the London Stock Exchange, according to analysis of reports shared on the issuer’s portal of the Nigerian Exchange Limited (NGX).

Ecobank on February 11, notified the NGX of successful pricing of its $300m fixed-rate, dollar-denominated bond, carrying a coupon rate of 7.125 per cent. It said the issuance was oversubscribed three times, with about $900m raised.

The rating of B- from Fitch Ratings hinted that the bank was more vulnerable to adverse business, financial and economic conditions but could meet its financial commitments as of the time of issuance.

The bank also announced a $350m tier 2 sustainability Eurobond raise in July issued with a coupon of 8.75 per cent, which was oversubscribed 3.6x, amounting to $1.3bn at its peak.

Access Bank, as part of its expansion drive, raised two tranches of Eurobonds in September.

Its $500m senior unsecured Eurobond rated B by Fitch Ratings and B2 negative outlook by Moody’s showed there was a high credit risk and vulnerability to adverse business, financial and economic conditions, but with a capacity to meet financial obligations.

The bank said the senior unsecured five-year Eurobond with a 6.125 per cent coupon was three times oversubscribed, ending over $1.6bn at the end of the transaction. It also completed another $500m offering with a 9.125 per cent coupon oversubscribed by 200 per cent, peaking at over $1bn.

This month, UBA announced its $300m senior unsecured Eurobond issued at a coupon of 6.75 per cent. The notes, rated B by Fitch and B- by S&P Global Ratings, showed a vulnerability to adverse business, financial and economic conditions.

Fidelity Bank, in October, raised $400m through a five-year tenor Eurobond with a 7.765 per cent coupon, listed on the Irish Stock Exchange.

According to The Punch, are of the view that the banks sought funding from the international markets to support dollar-needing opportunities, equity positions on their balance sheets, and mitigation of risks posed by the devaluation of the naira.

A financial analyst, Kalu Aja, said that since banks provided dollars needed for the importation of goods into the country, acquiring funding from the international market was a necessity.