Author: The Nation

In a jostle to secure Federal Government’s contracts and businesses, 4,487 organisations have remitted N103.47 billion pension contributions into the Retirement Savings Accounts (RSAs) of 119,865 employees.

The organisations were compelled to remit the contributions owed their employees as it is a prerequisite for them to secure the PenCom Certificate of Compliance (PCC), according to the National Pension Commission (PenCom), before they could solicit contracts or business from any Federal Government’s ministries.

The cash was remitted into the accounts of the employees in first quarter of the year, PenCom stated in its Update on Compliance by the Private Sector Quarterly Report.

The report read: “The Commission within the first quarter, 2023 processed and issued a total of 4,487 PCCs to organisations that met the requirements and  N103,469,914,514.26 was remitted into the Retirement Savings Accounts (RSAs) of 119,865 employees of the 4,487 organisations issued PCCs”.

PCC is usually issued to employers mandated to participate in the Contributory Pension Scheme (CPS), having complied with the PRA 2014 on pension administration.

 PenCom said companies without insurance covers for their workers would not be allowed to do any government business.

In view of this, PenCom requires organisations who wish to obtain the yearly PCC to  apply to the commission with a certified list of its employees.

They are also to add  a “Certified rate of monthly pension contributions, specifying employer and employee rates like minimum of 10 per cent by employer and minimum of eight per cent by the employee.’’

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“Evidence of remittance of monthly pension contributions for all employees showing the date of payment or remittance, names of employees, RSA Personal Identification Number (PIN) of employees, name of Pension Fund Administrator (PFA) and amount paid/ on behalf of employer and employer which will cover as follows: For the last three fiscal years – for organisations that were in existence for that period and have at least three staff, From the date of incorporation/registration/licencing – For organisations that have not been in existence for the last three fiscal years and from July 2014 to December 2016 – for organisations with three to four staff.

“Evidence of remittance of all outstanding pension contributions and penalties. This is applicable only to organisations whose/ pension contributions have been reviewed by PenCom or its agent and found to be culpable. Evidence of transfer of pension fund and assets prior to the commencement of the CPS to a licensed pension fund operator. This is applicable only to organisations that had pension arrangements before June 2004 when the CPS commenced.

“Evidence of valid Group Life Insurance Policy for employees which should include amongst others: Certificate of group life, policy document and the evidence of payment. Applicants are to note that it takes 15 working days from the date of receipt for an application to be processed. Certificates or rejections can be picked up at the offices where the applications were submitted”, the commission noted.

Over two decades after the historic telecoms revolution in Nigeria, some 30 million Nigerians are still not covered with telecoms services.

  The 30 million people, according to the Nigerian Communications Commission (NCC) fall within 97 clusters of people without access to services.

Executive Vice Chairman, NCC, Prof Umar Danbatta said part of the measures being to address this gap is through the licensing of satellite providers, adding that satellite technology has the capacity to extend services to the hinterlands.

He assured that the Commission will impress upon one of its licencees, Starlink, to crash its service charges so that more Nigerians can be captured into the telecom access net so as to close the gap.

 “We recently issued a licence to Starlink. This is a communication service provider that operates all over the country. We are trying to engage them to bring the cost of their services down to affordable levels so people in rural areas can equally benefit from this important information. With time we hope the days of un-connectivity will be over with the satellite provision all over the country.

“We are still looking at the price of the Starlink terminal so all Nigerians will be able to enjoy this service. It is faster than 5G and I think the corporate world is all over the entire country. This is one important measure we have put to address the challenge of the access gap which is about 97. We have not relented in deploying fixed and wireless infrastructure, especially in the rural and underserved areas of the country to bridge the access gap,” he said in Lagos at the weekend on the sidelines of a cyber security forum tagged: Combating E-fraud on Telecom Platforms and Building Consumer Confidence in the Digital Economy.

The Commission had earlier said the number of identified areas of clusters across Nigeria without access to the telecoms services has been reduced by 53.1 per cent as at the end of last year.

Danbatta explained that from 207 clusters of access gaps in 2013, the industry has witnessed a reduction to 97 by bridging 110 clusters of access gaps, representing a 53.1 per cent reduction.

He said by implication, the number of Nigerians who fell within the access gap which were estimated at 37 million in 2013 has been reduced to 27 million, following increased access to telecoms services by those hitherto not digitally included.

Access gaps refer to the cluster of communities or grouped areas in different parts of the country that are bereft of access to telecom services and till date, the NCC has reduced clusters of access gap by more than half.

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 “We have worked tirelessly to ensure we bring telecom services to people living in rural, unserved, and underserved areas of this country, totaling 37 million people courtesy of the consultancy that was conducted in 2013.

 “By 2019, we had succeeded in reducing the clusters of access gaps to 114 through the deployment of the necessary infrastructure needed to bring services to people living in rural, unserved and underserved areas of the country. The deployment of infrastructure is in terms of base transceiver stations (BTS), which resulted in the reduction of Nigerians in those clusters from 37 million to 31 million in 2019.

“By 2022, we have reduced the clusters of access gaps to 97 from 207 in 2013. The numbers of (disenfranchised) Nigerians again have come down from 37 million in 2013 to 27 million as we speak. We achieved this by deploying, from 2009 to 2011, a total of 79 new BTS,” he said

The NCC stated that between 2013 and 2018, the telecom sector also witnessed the deployment of additional 124 BTS while from 2019 to 2022, a total of 364 base transceiver stations were deployed.

“So far, the total number BTS we have deployed to date between the time the access gaps were identified till the end of 2022 are 567,” he said.

He said the Commission will not rest on its oars as it thrives to ensure that the remaining Nigerians, who currently lack access to telecoms services, are provided with services, adding that part the regulatory interventions of the Commission to bridge the remaining 97 access across the country to provide ubiquitous connectivity in all the nooks and crannies of Nigeria are the issuance of the Mobile Virtual Network Operator (MVNO) Licences and the deployment of 5G networks, among others.

• •Inflows hit 18-month high •Total FPIs increase by 339%

Foreign portfolio inflows into the stock market made a dramatic recovery from a record low to reach its highest level in one and half years in the immediate period of Nigeria’s political transition.

Latest report on foreign portfolio investments (FPIs) released at the weekend indicated a significant improvement in foreign investors’ participation in the investment market. Total FPI transactions rose by 338.72 per cent, driven by significant 649.6 per cent increase in inflows.

The report, for the period ended May 2023, showed that total FPIs increased from a record low of N8.47 billion in April to N37.16 billion in May 2023, its highest since June 2022. The total FPI in April was the lowest in recent years amidst anxieties over the political transition.

FPI inflows, which represent the buy side of the transactions, jumped from a record low of N3.67 billion in April 2023 to N27.51 billion in May 2023, its highest since November 2021. FPI outflows – the sell side, recorded a slower increase of 101.04 per cent from N4.80 billion to N9.65 billion.

The FPI report, coordinated by the Nigerian Exchange (NGX), included transactions from nearly all custodians and capital market operators and it is widely regarded as a credible measure of FPI trend. The report uses two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the equities market and the economy. While inflows and outflows indicate direction of portfolio transactions, total FPI measures the momentum and level of participation.

When inflows outweigh outflows, it simply means foreign investors are buying more quoted equities than they are selling and when outflows outpace inflows, it implies that foreign investors are selling more of their investments than buying more investments. Thus the position of FPI surplus or deficit.

The NGX noted that the May 2023 performance was partly driven by the record-breaking bullish rally triggered by the May 29, 2023 inauguration of President Bola Tinubu, widely considered as a pro-market administrator.

The stock market had launched into a major rally on the first trading day after the inauguration,  with net capital gains totaling N1.51 trillion, its highest gain in a day in two and half years. The benchmark index for the market, the All Share Index (ASI), posted average return of 5.23 per cent, its highest gain since November 12, 2020.

The gain by ASI, a value-based index that tracks all quoted shares at the NGX, was equivalent to N1.51 trillion. The rally, on the first trading day after Tinubu’s inaugural address, pushed average year-to-date return for Nigerian equities to 8.77 per cent, putting Nigeria back on the world’s chart of top stock market returns. Aggregate market value of all quoted equities had crossed the N30 trillion mark to N30.349 trillion on the first post-inauguration trading day, as against N28.844 trillion recorded as opening value.

The May 2023 report also showed similar enthusiasm among the domestic investors, pushing total transactions at the market up by 68.88 per cent to N323 billion, its highest since May 2022. It was N191.21 billion in April 2023.

Further analysis showed that total domestic transactions increased by 56.37 per cent from N182.74 billion in April to N285.76 billion in May 2023. Similarly, total foreign transactions increased significantly from N8.47 billion, about $18.31 million, to N37.16 billion, about $79.88 million, between April and May, this year.

FPI transactions ended 2022 with a surplus of N12.29 billion, as against a deficit of N24.74 billion recorded in 2021. Nigeria recorded FPI deficit of N234.66 billion in 2020, about 125 per cent increase on N104.3 billion recorded in 2019. The country had slipped into negative with FPI deficit of N66.3 billion in 2018.

FPI inflows closed 2022 at N195.76 billion as against outflows of N183.47 billion. FPI outflows had outweighed inflows at N229.62 billion and N204.88 billion respectively in 2021. However, total FPI transactions dropped from N434.5 billion in 2021 to N379.23 billion in 2022. The proportion of foreign transactions to total transactions declined from 22.88 per cent in 2021 to 16.32 per cent in 2022.

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Tinubu, in a speech that had been described as market friendly, addressed general issues of security, economy, infrastructure and monetary outlook. The president also directly addressed investors’ concerns on multiple taxations, returns repatriation and foreign exchange (forex), among others.

“I have a message for our investors, local and foreign, our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home,” Tinubu said, immediately after being sworn in at the Eagle Square, Abuja.

Market analysts were unanimous that the stock market performance so far has been in response to Tinubu’s policy direction, with a consensus that the general policy direction would significantly uplift the Nigerian economy and drive foreign and domestic investments in Nigerian assets.

Market analysts have said increasing inflows from FPIs may curb decline and boost Nigeria’s foreign exchange (forex) reserves as the country struggles to boost revenue and strengthen its currency.

Group Executive Director, Investment Banking, Cordros Capital, Mr. Femi Ademola, said inflows from FPIs could provide a short-term succour for Nigeria’s declining forex reserves.

Ademola spoke against the background of decline in forex reserves.

 He identified low revenue from oil, oil subsidy and the country’s import-dependent economy as major reasons for the continuous pressure on the forex reserves.

 “There is however some comfort in the fact that foreign portfolio managers are now optimistic about the country’s economic prospects and may be looking for opportunities to invest in Nigeria. While this may likely be more of hot monies rather than patient capital, it would by and large help to improve the reserves in the short term while sending a more reassuring signal to the markets,” Ademola said.

Nigeria’s external reserves, which closed 2022 at about $37.08 billion, had peaked at $37.211 billion on January 16, 2023. It has since been on the decline, dropping by $239.74 million to close weekend at $34.35 billion.

Afrinvest Securities said “economy reform optimism” bolstered the market performance, noting that the “the rally in the market followed the promise of critical reforms by the President Bola Tinubu administration”.

 “President Bola Ahmed Tinubu’s inaugural address was given yesterday (Monday), and it sparked the equity market’s imagination, with a rally of 5.23 per cent today (yesterday). The announcement of key market reforms, including phasing out fuel subsidies and unifying foreign exchange rates, shows that pro-market policies were not just items in the manifesto but issues which he is setting out to fix. If they are fixed, we expect much more from the equity market,” Coronation Securities Limited stated.

Analysts at Arthur Steven Asset Management said the equities market’s bullish momentum was “because of the new administration which tends to affect the market positively”.

“The market reacted to the high expectation from the new administration as the government promised the investors easy repatriation of their investment and profit,” Arthur Steven Asset Management stated.