The Nation Newspaper

Author: The Nation

  • STI maintains A-rating with GCR

    STI maintains A-rating with GCR

     Omobola Tolu-Kusimo

     

    SOVEREIGN Trust Insurance Plc (STI) has continued to maintain a confident A-rating with the international rating agency, Global Credit Ratin (GCR) based in South Africa for over a decade.

    A statement by its Deputy General Manager, Sales & Corporate Communications, Olusegun Bankole stated that the agency’s recent solvency and operational report for financial institutions in Nigeria and other allied businesses released last December affirmed that the company has great potential for growth in the years ahead considering some of the strategies that have been put in place to propel its operations.

    According to him, Global Credit Rating noted that the company has shown a great deal of consistency in her claims paying obligations to her customers spread all over the country.

    The statement read: “The agency’s report further stated that the listing of the Rights Issue in 2019 helped in increasing the shareholders’ funds of the company by 33.8 per cent to N7.8 billion by the end of the financial year in 2019 as against the figure of N5.8 billion in 2018. Consequently, by the Third quarter of 2020, the shareholders’ funds had increased to N8.2 billion, which also translated to a 31 per cent increase in the same corresponding period of 2019 with a figure of N6.3 billion.  In the rating agency’s opinion, Sovereign Trust Insurance Plc is strong in liquidity with more than adequate claims coverage that compares well to industry averages.

    “The capital adequacy of the underwriting firm is considered strong according to the rating report and this is underpinned by the sizeable capital base catering for the quantum of insurance and market risks assumed. In this regard, the ratio of Shareholders’ funds to NEP, (Net Earned Premium) improved to 189.2 per cent in the Q3 of 2020 as against 130.9 per cent in the corresponding quarter of 2019. In terms of peer-to-peer performance comparison, STI did very well when compared with other selected insurers in terms of Capital, Total Assets, Gross Premium Income (GPI) and Net Premium Income (NPI).

    “The company has creatively been able to develop a good mix of its clientele base with personal lines contributing 42 per cent of its Gross Premium Income during the rating period. The introduction of the Enhanced Third-Party Motor Insurance Cover with the acronym E3P in 2019 complemented the efforts of management at driving retail business initiatives in the industry. Other new retail products are already in the pipeline and will soon be introduced to the market in a not-too-long distant time”.

    The report, according to Bankole, also stated that as a result of STI’s increased underwriting capacity and geographical diversification, the organisation has developed a sound business profile supported by a moderately strong competitive position and improved brand acceptance hinged on continuous marketing drive and a well-established Brokers’ relationship of diverse business mix.

    “As observed by the rating agency, insurance penetration remains very low in the country at an estimated ratio of 0.5 per cent for general insurance businesses. But STI has over the years demonstrated commitment to deepene penetration and optimally maintain a leading position in the insurance industry in Nigeria,” he added.

  • PenCom warns PFAs on death benefit payments

    PenCom warns PFAs on death benefit payments

    Our Reporter

     

    THE National Pension Commission (PenCom)  has warned Pension Fund Administrators (PFAs) that violates the procedures on death benefit payments.

    The commission has threatened to punish the PFAs that paid death benefit payments without following due process.

    Subsequently, the commission has stopped the operators from paying more inflows into deceased employees’ Retirment Savings Account (RSA), advising them to get approval after initial approvals had been given.

    The circular with reference number PENCOM/INSP/CIR/SURV/20/1383 to licensed pension fund operators entitled: “Cessation of payment of death benefit claims to legal beneficiaries without Commission’s approval”dated December 1, 2020, reads: “Please recall the Commission’s directive to PFAs via its letter dated 16 May 2013 to pay additional inflows into deceased employees’ RSA to legal beneficiaries, after initial approval has been obtained, without reverting to the Commission for further approvals.

    “However, the Commission has noted in recent times increase in death benefit payments that did not meet the required internal control measures Hence, the need to strengthen the death benefit payment process.

    “Accordingly, the Commission hereby directs the immediate cessation of payment of additional death benefit claims without the Commission’s approval. Consequently, the following procedure should be followed by PFAs in the processing, approval and payment of death benefit claims.”

    Read Also: Pioneer DG, NLC, others laud PenCom on transfer window

    The commission stated that requests for payment of initial death benefit claims to legal beneficiaries should be submitted to the commission for approval via the Risk Management Analysis System (RMAS).

    “Requests for payment of additional death benefit claims to legal beneficiary(ies) must be submitted through the Benefits and Insurance Department’s dedicated email. The Commission will review requests for payment of death benefit claims and approve or decline the requests; and on no account should additional death benefit claims be paid to legal beneficiary(ies) without the Commission’s approval.

    “Appropriate sanctions would be imposed on PFAs for violation of the above procedure for death benefit payments. This circular supersedes the commission’s letter of 16 May, 2013 on the payment of death benefit claims and is effective from December 1, 2020,” the added.

  • 10 for Wema Bank’s bootcamp

    10 for Wema Bank’s bootcamp

    Collins Nweze

     

    WEMA Bank Plc has shortlisted 10 finalists to take part in the Virtual Bootcamp for its Hackaholics (2.0) Accelerator Programme which started on January 18.

    The finalists, pooled from over 500 applications, were unveiled during the two-day virtual pitch programme last year.

    Wema Bank Managing Director,  Ademola Adebise commended the startups for their efforts to contribute to the growth of the society.

    He said: “We are very proud to create a platform where businesses can have access to diverse resources that can enable them to provide solutions to prevailing everyday challenges.

    “This is borne out of our aspiration to create innovative solutions that can help us as a bank, our environment and the country at large.

    ‘’In its second year, we are very excited to have started an initiative focused on creating commercialisation opportunities for participating businesses by leveraging top-notch resources needed to give their solutions a competitive edge in the market.”

    The first day of the pitch was an avenue for startups to prepare and get to know more about Hackaholics 2.0, the evaluation criteria, an overview of each identified industry, market demands and needs, the importance of tech in these areas, and a session for questions and answers.

     

  • AfCFTA: Ecobank positioned for seamless payments

    AfCFTA: Ecobank positioned for seamless payments

    Our Reporter

     

    THE Group Chief Executive Officer, Ecobank Transnational Incorporated (ETI), Ade Ayeyemi, has affirmed that the Pan-African banking group is facilitating payments across Africa as countries start the implementation of the African Continental Free Trade Area Agreement (AfCFTA).

    Ayeyemi, who stated this during an  interview with reporters, pointed out that Ecobank has been able to effect international payments across the 33 countries where it operates on the continent through its Rapid Transfer platform.

    He reiterated that the bank’s platform could be scaled to accommodate other African countries under the AfCFTA based on their regulations.

    According to the Ecobank Group chief, the banking group  is one of the key supporters of the AfCFTA, which he believes will be of great benefit to  the continent and customers of the bank.

    Read Also: AfCFTA: Dangote to create new trade routes

    He said: “With this Pan-African exposure, the governments and our customers will re-evaluate their businesses to efficiently take charge of bigger opportunities.

    “So, if you manufacture goods in Aba for the Nigerian market, you can now start thinking of how to expand your manufacturing capacity to export across West Africa and also other African countries, not just looking at Nigeria as a market alone.

    “And as you change your demand forecast, you need to improve your capacity to produce and that will mean importing new machinery to expand your manufacturing base, develop bigger market and hire more people.”

     

  • Heirs Holdings’ $1.1b OML 17 deal good for investors, says Rewane

    Heirs Holdings’ $1.1b OML 17 deal good for investors, says Rewane

    Collins Nweze

     

    HEIRS Holdings $1.1 billion Oil Mining License (OML) 17 acquisition deal from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI will benefit the Federal Government, investors and the multinationals, Managing Director, Financial Derivatives Company of Nigeria, Bismarck Rewane, has said.

    Analysing the major oil transaction, Rewane, a renowned economist, said  the deal struck through TNOG Oil and Gas Limited, a related company of Heirs Holdings and Transcorp, showed ongoing assets optimisation by the multinationals.

    On why such valuable assets would be sold by the multinationals, Rewane said the multinationals are focusing on offshore and deepwater oil fields with higher returns and giving investors opportunity to retain profits.

    Continuing, he said aside the gain of economic patriotism, the oil deal would help to create jobs, transfer  technology and management skills to locals.

    On security, Rewane said these would be better handled by Nigerian firms.

    He said: “Actually, this is optimisation of assets by the multinationals. There are three types of assets in Nigeria. The land and swamp oil fields; offshore and deepwater oil fields. In the offshore and deepwater, what accrues to the multinationals is much higher than what obtains in the land and swamp oil fields.

    “Besides, the land and swamp oil field is also full of risks, because of restlessness   and activities of militants in the region. So, what has happened is that there is rationalisation of assets because of prices dropping and also meeting the other objective of getting local content.”

    Rewane said Heirs Holdings, Tony Elumelu Foundation and Transcorp  are very reputable Nigerian investors, which have the resources and have paid the total amount of $1.1 billion for the deal, which he described as good for the government, investors and multinationals.

    He said across the world, host communities were trying to have a spin in the game, rather than having a situation whereby the multinationals come in and get the revenue out.

    Read Also: Tony Elumelu soars high

    “That is the gain of economic patriotism on one hand, and it helps to create jobs, transfer of technology and management skills. That is why you select the type of Nigerian partners you want, those that have capacity, and Heirs Holdings has shown that they have a track record of success,” he stated.

    “Heirs Holdings belongs to people who are from the Niger Delta themselves. So, you have what is called the ‘son of the soil credentials’ which help you to negotiate better. But not all the time. In any case, there are also some risks which insurance will help you with,” he said.

    Other analysts said the investment demonstrates a further important advance in the execution of Heirs Holdings’ integrated energy strategy and the Group’s commitment to Africa’s development, through long-term investments that create economic prosperity and social wealth.

    Heirs Holdings’ heritage and approach to business underscores its commitment to inclusive development and shared prosperity with its host communities.

    Heirs Holdings is investing in the development of the Niger Delta region. Its strategy of creating the leading integrated energy business in Africa is executed through a series of strategic portfolio holdings.

    Transcorp is one of the largest power producers in Nigeria, with 2,000 MW of installed capacity, through ownership of Transcorp Power Plant  and the recent acquisition of Afam Power Plc and Afam Three Fast Power Limited.

    Transcorp closed the $300 million Afam acquisitions last November.  It supplies electricity to the Republic of Benin, as part of its plan to promote regional integration and delivering robust power supply to catalyse development in Africa.

    Transcorp also operates OPL281 under a production sharing contract with the Nigerian National Petroleum Corporation (NNPC).

  • NG Clearing acquires clearing, settlement technology

    NG Clearing acquires clearing, settlement technology

    By Taofik Salako,  Deputy Group Business Editor

     

    NG Clearing Limited has signed an agreement with a software development firm, Mantissa Infotech Private Limited, for the development, implementation and maintenance of bespoke clearing and settlement technology for its operations.

    Securities and Exchange Commission (SEC) had last September  granted approval in principle to NG Clearing Limited to clear and settle exchange traded derivatives instruments.

    Managing Director, NG Clearing Limited, Mr. Tapas Das, said the company was excited about the deal as the deployment of the technology platform places it in a position to commence operations as soon as it receives final approval from the SEC.

    According to him, the technology platform will support the clearing and settlement of derivative instruments across various asset classes including futures and options contracts on indices, equity shares, commodities, currency and rates among others.

    “Mantissa’s vast experience and end-to-end capability in providing a suite of bespoke technology solutions to leading exchanges and clearing houses in India comes in very handy, having provided both the trading and the clearing and settlement software for 14 years to the National Multi-Commodity Exchange of India Limited (NMCEIL), which was the first national level commodity exchange in India, until NMCEIL was merged with Indian Commodity Exchange Limited (ICEX) in 2018,” Das said.

    He noted that Mantissa’s broad experience from providing its technology service to various market infrastructure, including NMCEIL, Metropolitan Stock Exchange of India Limited (MSE), Metropolitan Clearing Corporation of India Limited (MCCIL) and ICEX, has been beneficial in the development of the state of the art technology.

    He said stakeholders would find the technology very versatile and useful.

    According to him, NG Clearing has resources in place to ensure that it can continue to operate at all times necessary to support the functioning of the markets that it supports and the settlement of the contracts effected on those markets.

    “We will optimise the deployment of our resources to achieve long-term value creation for our stakeholders using a state-of-the-art risk management framework, which complies with global best practices for mitigating settlement risk. We have sufficient financial resources, including a settlement guarantee fund, to cover participants’ risk exposures, and our risk-based additional collateral requirement will ensure that capital deployed by clearing members is always optimal,” Das said.

    NG Clearing Limited was promoted by the Nigerian Stock Exchange and Central Securities Clearing System Plc along with key stakeholders like the Nigeria Sovereign Investment Authority, Access Bank Plc, Consonance Kuramo Special Opportunities, Coronation Merchant Bank Limited, Greenwich Merchant Bank Limited, Union Bank of Nigeria Plc, United Bank for Africa Plc and Association of Securities Dealing Houses in Nigeria.

    NG Clearing was established to support the growth and development of the capital market, as the gateway to African markets. It provides post-trade services that manage counterparty credit risks and reduce systemic risks, by guaranteeing the settlement of trades.

    The company seeks to pave the way for a smooth introduction of exchange-traded derivatives and other financial instruments to the Nigerian and African markets, thus, facilitating the availability of alternative investment options for knowledgeable local and foreign investors who seek a diversified portfolio within the markets.

    It also seeks to deploy a competitive low-cost clearing fee regime for members, and provide members access to a wide range of financial reports, that equip them with extensive knowledge and enable them to make informed decisions.

  • Why NERC postponed hearing in petition by BEDC

    Why NERC postponed hearing in petition by BEDC

     John Ofikhenua, Abuja

     

    THE Nigerian Electricity Regulatory Commission (NERC) has postponed the hearing in the Benin Electricity Distribution Company (BEDC) against Independent Electricity Distribution Network (IEDN) indefinitely because it is before the court.

    This is contained in a public notice of the NERC that The Nation sighted yesterday.

    The notice submitted that “the Commission acknowledges that the matter is now subject to judicial review and hereby notifies the general public that the hearing shall no longer hold as scheduled as the parties are now required to present their positions to the court in a manner that respects the independence of the judiciary’’.

    The notice, which the management issued on the postponement, was dated January 18, 2021.

    NERC’s management urged the public to “take notice that the hearing scheduled for 19 January 2021 to consider the petition filed by Benin Electricity Distribution Plc (BEDC) against Asaba Distribution Limited (ADL) application for an independent electricitpety distribution network licence has been postponed indefinitely”.

    The notice added that the hearing was meant to be conducted pursuant to Section 70 (2) of the Electric Power Sector Reform Act (EPSRA), clause 11 of the NERC Application for Licences Regulations 2010 and Section 17 of the Nigerian Electricity Regulatory Commission (Business Rules of the Commission) Regulations (Business Rules) 2006 and considered by a panel of three commissioners.

    It recalled that the Commission was served court processes on January 18, 2021 of a suit (FHC/ABJ/CS/36/2021) that was filed at the Federal High Court by BEDC on January 15, 2021 against the Commission and ADL.

    BEDC, according to the notice, avers in the suit that it “has the capacity to and has in fact been supplying adequate and sufficient electricity that meets the demand of the Delta State Government for whom the IEDN licence is purported as being procured for within the BEDC electricity distribution area, including the designated area”.

     

  • PPPRA: Use of domestic gas rises

    PPPRA: Use of domestic gas rises

     John Ofikhenua, Abuja

     

    THE Petroleum Products Pricing Regulatory Agency (PPPRA) on Tuesday announced that Nigeria’s domestic Liquefied Petroleum Gas (LPG) consumption exceeded one million metric tonnes (Mt) last year, making 2020 the first in the nation’s history where LPG consumption has reached the one million MT threshold.

    Its Executive Secretary, Abdulkadir Saidu, who broke the news in a statement, recalled that Nigeria consumed 840,594.37 MT LPG in 2019, indicating an increase of 60.5 per cent over 635,452.061MT recorded in 2018.

    According to him, this steady and sustained pattern of growth culminating in the over 1million metric tonnes of LPG domestic consumption milestone in 2020 has placed the country first in West Africa and one of the leading LPG consuming nations on the continent.

    He said: “With this laudable feat, the country is on track to meet the 5million MT by 2022 target, set in the Nigeria Gas Policy (NGP) of 2017, which translates to an average of 1million MT/year, provided we collectively sustain and ramp up intervention efforts and initiatives of government and all stakeholders.”

    Read Also: PPPRA fixes ex-depot price for N138.62

    The Federal Government’s resolve to deepen LPG penetration in the country, according to him,  seeks to create a healthier life for Nigerians by providing access to a cleaner source of energy for cooking, vehicular transportation and other domestic uses.

    The agency’s boss noted that the attainment of the one million MT domestic utilisation milestone is a testimony to the progress made so far in ensuring the provision of alternative sources of fueling to Nigerians in place of the traditional PMS, AGO and DPK and altering the nation’s energy mix in favour of locally-available options.

    Already, Nigeria Liquefied Natural Gas (NLNG) Limited, has increased its allocation of LPG to the domestic market from 350, 000MT to 450, 000MT in 2021 in order to support this laudable goal.

     

  • Average air fare soars by 0.42 per cent

    Average air fare soars by 0.42 per cent

    John Ofikhenua, Abuja

     

    THE National Bureau of Statistics  (NBS) has said the average fare paid by air passengers for specified routes single journey increased by 0.42 per cent   month-on-month and by 18.54 per cent year-on-year to N36,454.59 last December  from N36,301.74 in November, last year.

    It made this known in its “Transport Fare Watch report for December 2020”, which covers bus journey within the city per drop constant route; bus journey intercity, state route, the charge per person; airfare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.

    The document that The Nation obtained on Tuesday said states with highest air fare were Anambra (N38,700), Lagos (N38,550), Cross River (N38,500) while states with lowest air fare were Akwa Ibom (N32,600), Sokoto (N33,500), and Gombe (N34,750).

    It also said the average fare paid by commuters for bus journey intercity increased by 4.98 per cent  month-on-month and by 41.14 per  year-on-year to N2,532.19 in December 2020 from N2,240.66 in November 2020.

    States with highest bus journey fare intercity were Abuja  (N4,415.73), Sokoto (N3,255.20), and Lagos (N3,250.60) while states with lowest bus journey fare within city were Bayelsa (N1,550.73), Bauchi (N1,600.70), and Akwa Ibom (N1,700.54).

    The data noted that the average fare paid by commuters for journey by motorcycle per drop increased by 6.14 per cent  month-on-month and by 124.73 per cent  year-on-year to N293.36 in December 2020 from N276.38 last November.

     

     

  • Average kerosene price decreases by -0.17 per cent

    Average kerosene price decreases by -0.17 per cent

    John Ofikhenua, Abuja

     

    THE National Bureau of Statistics (NBS) has said the average price per litre paid by consumers for National Household Kerosene decreased by -0.17 per cent month-on-month and increased by 10.05 per cent year-on-year to N352.79 last December from N353.38 the previous month.

    This was contained in the National Household Kerosene Price Watch (December 2020) that The Nation obtained yesterday.

    The document said, similarly, average price per gallon paid by consumers for National Household Kerosene decreased by -3.52 per cent month-on-month and by -3.06 per cent year-on-year to N1,175.59 in last December from N1,218.50 last November.

    Read Also: NBS: Nigeria’s public debt hits N32.22tr in Q3

    According to the report, states with the lowest average price per litre of kerosene were Bayelsa (N235.95), Rivers (N302.04) and Delta (N307.69).

    The data added that states with the highest average price per litre of kerosene were Benue (N436.81), Ebonyi (N425.83) and Taraba (N423.33).

    NBS said states with the highest average price per gallon of kerosene were Kebbi (N1,534.21), Nasarawa (N1,488) and Benue (N1,450).

    The report noted that states with the lowest average price per gallon of kerosene were Sokoto (N733.33), Bayelsa (N773.75) and Adamawa (N822).