The Nation Newspaper

Category: Business

  • Naira rises on foreign demand for bonds

    Naira rises on foreign demand for bonds

    The naira firmed against the U.S. dollar on the inter bank yesterday, supported by inflows from foreign investors ahead of a bond auction this week and a $57.5 million sale by ExxonMobil to some lenders, dealers said.

    The naira closed at N157.65 to the greenback, firmer than Monday’s close of N157.75.

    The naira has gained 1.62 per cent so far this year on the back of rising oil prices and foreign reserves in Africa’s second biggest economy. It has traded within a range of N157-N158 over the past month on high dollar liquidity, dealers said.

    “Sentiment is high and we see the naira gaining further this week or at least remaining stable,” said a dealer at Standard Chartered Bank, adding that dollar inflows have risen in recent months to help sustain demand.

    Dealers said the inclusion of Nigeria’s debt into the JP Morgan emerging market government bond index from October saw foreign investors pump in dollars to buy treasury bills.

    Nigeria will sell N104.70 billion ($663.50 m) worth of treasury bills with maturities ranging from three-months to one-year this week, with foreign investors already buying naira to participate in the auction, dealers say.

    Foreign reserves rose to $40.28 billion in September, up 10.3 per cent on the previous month.

  • NAICOM resolves N1.22b claims disputes

    NAICOM resolves N1.22b claims disputes

    The National Insurance Commission (NAICOM), through its Complaints Bureau, has facilitated the settlement of N1.220billion claims which were in dispute in the first half of this year.

    A statement by the Assistant Director, Corporate Affairs, NAICOM, Lucky Fiakpa, said the Bureau resolved 52 cases within the period.

    He said the Bureau dealt with a total of 349 cases and held four adjudication meetings, adding that out of this figure, 86 were fresh complaints, while the remaining 263 are existing/on-going cases.

    Fiakpa, said the outstanding claims are currently receiving the attention of the Commission, with a view to achieving a quick resolution of the isues to the satisfaction of all stakeholders, particularly, members of the insuring public.

    He said: “The resort to the Bureau for settlement of claims disputes by the insuring public, is an indication of the level of awareness of this channel of dispute resolution in the Commission.

    “Insurance companies have been made to accept the fact that it is no longer business as usual, as their responses and compliance with the Commission’s directives had witnessed an improvement compared to previous periods.

    “Consequently, not less than 85 per cent of the insurance institutions responded to queries or directives issued to them for claim settlement during the period.

    He said majority of the 15 per cent residual, are largely claims already before courts of competent jurisdiction and therefore prejudicial for the Commission to intervene.

    He said the complaints received this year were mainly those involving non settlement of claims on Motor Insurances, Marine, Life, Bond Issues and Pension matters, stressing that the complaints were received from individual policy holders, beneficiaries, government agencies, SERVICOM, Legal Aid Council and Public Complaints Commission.

  • ‘Why decision on IGI Pension, Citi Trust is pending’

    ‘Why decision on IGI Pension, Citi Trust is pending’

    The National Pension Commission (PenCom) is yet to take a decision on the fate of two Pension Fund Administrators (PFAs), Industrial and General Insurance (IGI) Pension Limited and Citi Trust Pension Limited over their inability to meet recapitalisation deadline.

    Investigations revealed that Citi Trust Pension Limited has gone to court to challenge the intention of the Commission to revoke its operational license over the issue. It was also gathered that the commission is taking its time to verify the claims by IGI Pension. PenCom gave the two firms 28 days revocation notice within which to capitalise to the tune of N1 billion, or be axed. The deadline elapsed last month.

    The Deputy Managing Director, Industrial and General Insurance (IGI) Plc, Rotimi Fashola, said the company actually recapitalised as required by PenCom by pooling together cash and assets which amounted to far more than the specified N1 billion mark.

    Fashola said: “It is true that PenCom has sought clarifications from us on some matters, but the process of recertification is ongoing and every grey area will be resolved in accordance with the law. We are making representations to the commission and are of the strong conviction that it would reconsider its position after listening to us.

    “It is unfair and erroneous to make the public believe that IGI PFA failed to meet the recapitalisation requirement when in fact, the company capitalised up to N1.5 billion in cash plus property. This amount is N500 million above the mark set by PenCom.

    “For the avoidance of doubt, let me state categorically without any fear of contradiction, that it is outright falsehood that our PFA license has been revoked. Our licence is intact and we remain a leading player in the industry.”

    PenCom released the report of its recapitalisation exercise, last month. Inm it, 18 PFAs met the recapitalisation target; three were acquired, while two failed to raise the minimum capital of N1billion.

    The commission had mandated all pension fund managers to shore up their capital base from N150m to N1billion or be wound. The release of the report followed the completion of the verification of their capital base to determine their level of compliance. The exercise, which was carried out from the beginning of July was imperative in order to verify the sources of funds of all the PFAs that claimed to have met the recapitalisation target.

    This, according to the commission, was to ensure that illegal funds did not find their way into the system.

    Those that cleared the recapitalisation hurdle are ARM Pension Managers Limited; Leadway Pensure PFA Limited; Premium Pension Limited; Sigma Pensions Limited; Stanbic IBTC Pension Managers Limited and Trustfund Pensions Plc.

    Others are Aiico Pension Managers Limited; APT Pension Fund Managers Limited; Crusader Sterling Pensions Limited; Fidelity Pension Managers Limited; Future Unity Glanvills Pensions Limited; IEI-Anchor Pension Managers Limited; NLPC Pension Fund Administrators Limited; Legacy Pension Managers Limited; Oak Pensions Limited; Pensions Alliance Limited; Penman Pensions Limited and Royal Trust Pension Fund Administrator Limited. It, however, added that three others were acquired by other PFAs, while First Guarantee Pension Limited is under regulatory intervention.

    Amana Capital Pension Limited was acquired by Sigma Pensions Limited; Crib Pension Fund Managers Limited was acquired by Oak Pension Limited, while Evergreen Pensions Limited was acquired by Oak Pension Limited, a statement from the Commission issued by the Head, Communications Unit, Pencom, Mr. Emeka Onuorah, said.

    Meanwhile, the Commission is to undertake customer satisfaction survey to ascertain whether contributors are getting optimal services from their Pension Fund Administrators (PFAs), its Director General National Pension Commission (PenCom) Mohammad Ahmad has said. He said the move is part of the commission’s effort to ensure contributors are properly served.

    Ahmad noted that as part of the commission’s supervisory mandate, it had cause to impose sanctions on operators for failure to render returns promptly and inability to send Retirement Savings Account (RSA) statements to contributors

    He said: “As part of its supervisory mandate, the Commission had cause to impose sanctions on operators in respect of a number of issues. The issues include failure to render returns promptly and inability to send RSA statements to contributors.

    “In serious cases of weak corporate governance, the Commission had intervened to remove directors and takeover the management of the affected operators in order to safeguard the pension assets.

    “The issue of service delivery is taken seriously in the pension industry. To that end the Commission intends to undertake customer satisfaction survey and develop regular satisfaction index.”

    He said the payment of benefits to retirees in the private sector had been regular and timely and that recently the payment of retirement benefits to retirees as well as death claims to beneficiaries of deceased federal government employees has been challenging due to funding problems of the government.

    Ahmad said the administration of pension has no doubt been enhanced with the passage of the PRA 2004, stressing that not only has the Act provided a platform for a more effective, efficient and transparent administration of pensions in the federal public service and the private sector, but also generated a pool of long term fund for investment that already had positive impact on the growth of the economy.

  • AfDB’s assets in Nigeria hit $1.5b

    The African Development Bank (AfDB) has put the total value of its portfolios in Nigeria at about $1.5 billion. The bank is also adopting measures to channel more funds into infrastructural development in the country.

    The bank said the portfolios cover loans earmarked for core critical economic projects, direct investment by way of holding equities, and credit extended to financial institutions among others.

    Speaking to The Nation, the AfDB’s country representative in Nigeria, Dr Ousmane Dore, said the portfolios cover projects that have been approved in the private and public sector.

    Dore said disbursement of funds took effect from December last year to ensure speedy execution of the projects.

    He said efforts were on to provide funds for projects that are yet to receive the institution attention.

    The development, he said, is in line with the bank’s mandates to identify and execute projects that are of critical importance to the economy of member states of which Nigeria is one.

    There are specific and general projects to be financed in the country, depending on the rankings given to them, he said.

    Water supply, agriculture, health, education, roads among others are some of the public projects identified by the bank, he said, adding that the private sector projects border on technical assistance and infrastructure.

    Giving a breakdown of the projects, Dore said $634.6 million was earmarked for the private sector and public sector, $699.5 million.

    Dore said private sector projects include lines of credit (LOC) to financial institutions, direct investments by way of holding in equities, and public/private partnership (PPP) initiatives.

    The bank has extended lines of credits of $304.4 to financial institutions in Nigeria, direct investments of $32 million and $69.2 million for public/private partnership projects.

    He said $57 million was earmarked for various agricultural projects, $236.2 million for infrastructural projects such as water supply, sanitation programmes, economic and power sector initiatives. $30 million was also voted for skills acquisition and vocational education among other projects under public sector.

    Borno, Jigawa, Katsina, Kogi, Plateau, Kwara, Adamawa, Gombe, Niger, Edo, Ondo, Ekiti, Oyo, Osun, Taraba, Cross River and Rivers states, among others are beneficiaries of the bank’s funds.

    He said the bank is yet to determine whether about 10 states would be among the beneficiaries of the loans programme.

    On disbursement of funds, he said the states had not received the total loans earmarked for them.

    Dore said $82.1 million out of $493.4 million earmarked for projects have been disbursed, representing a difference of 16.7 per cent.

    The bank, he said, is shifting its operations to employment generation, adding that the lender intends to create jobs through the Small and Medium Scale Enterprises (SMEs).

    “We have set up loans for capacity building in many countries including Nigeria. We intend to provide loans for the SMEs, and we want to channel the loans through Bank of Industry and Nigerian Export Bank of Nigeria to ensure accessibility. This is one way of reducing unemployment and growing the economy,” he said.

  • Equity Assurance pays N556m in 8 months

    Equity Assurance Plc has paid total claims amounting to N556 million in the first eight months of the year, a statement issued by the Head, Corporate Communications of the Company, Mr Tunde Amolegebe stated. The claims settled covered all classes of business underwritten by the company within the period.

    The breakdown of the claims payments reveals that a total of N242 million was paid on fire insurance,N114 million paid on motor vehicle insurance business and N86.9 million paid on general accident insurance. Other payments were on marine insurance claims – N65.1million, oil and gas insurance – N37.7 million and N9.7 million paid on engineering insurance business.

    Some of the company’s clients whose claims were paid within the period include: Friesland Wamaco, Sterling Oil Exploration and Bourbou Interoil Limited. They were paid N131.8 million, N37.7 million and N19.3 million. Others are Panaserv Nigeria Limited – N18.7 million, Ceveae International Limited – N10.3 million and the Nigerian Police – N33.3 million among others.

    The current sum paid as claims represents an increase of 17.31 percent over the sum of N474.4 million paid in the same period in 2011.

     

  • EU experts to speak on cash-less policy

    Head of the European Union (EU) Central Bank Market Integration Division Wiebe Ruttenberg is expected to visit Nigeria next month to speak on the cash-less policy initiative of the Central Bank of Nigeria (CBN), at a conference in Lagos.

    A statement said the official would be speaking alongside other international experts at a conference being organised by De Novo (a strategy brand and media firm) and Legal Reach, a UK law firm.

    The two-day programme, sponsored mainly by the CBN, focuses on the move away from the dominance of the current cash-based system by adopting alternative payment channels. This is in line with the country’s Vision 2020:20 Strategy as well as the central bank’s ambition of enthroning a world-class payment system.

    Slated for October 8 and 9 at the Lagos Oriental Hotel, Lekki, Lagos, the conference is expected to bring together experts in the global payments industry, who would provide insight and present key developments from other jurisdictions, to benchmark the way forward.

    Experts, drawn from various relevant sectors of the economy such as banking, manufacturing, telecommunications, services, and even the informal sector, and from outside Nigeria, would be meeting and deliberating on the issues surrounding the cashless policy.

    Key speakers at the forum include Executive Governor of Lagos State, Babatunde Raji Fashola; Governor, CBN, Mallam Lamido Sanusi, Attorny General of the Federation and Minister of Justice, Mr. Mohammed Bello Adoke, SAN, Minister of Communication & Technology, Mrs. Mobola Johnson; and top relevant members of the National Assembly.

  • CIIN, NCRIB seek govt’s support for industry

    CIIN, NCRIB seek govt’s support for industry

    The President, Chartered Insurance Institute of Nigeria (CIIN), Dr Wole Adetimehin and his counterpart in the National Council of Registered Insurers Brokers (NCRIB), Mrs. Laide Osijo, have called on state governments to support the industry by procuring policies to cover their risks.

    Adetimehin, made the call during a visit to the Ogun State Governor, Senator Ibikunle Amosun in Abeokuta, on the one hand, and Ondo State Governor, Olusegun Mimiko, in Akure, recently.

    Adetimehin said support from governments, would go a long way in promoting service delivery and enhance international best practices.

    He said there are compelling reasons why the citizenry and governments should take insurance more seriously, adding that Nigerians are under daily threat from risks emanating from natural disasters such as floods, rainstorms and security risks which are taking their toll on the citizenry.

    He noted that the low insurance contribution to the economy stemmed from lack of necessary infrastructure, adding that lack of basic needs prevent people from making insurance part of their priorities.

    He said: “With unemployment at an estimated 23.9 per cent in 2012, the Insurance business in Nigeria is hardly able to improve on its contribution to the nation’s GDP, above one per cent, unlike in South Africa where it is 15 per cent. The reason for this is because citizens are apparently laden with costs which are channeled at the procurement of otherwise basic and fundamental needs such as electricity, water and security, these, he said prevent them from making insurance part of their priorities.

    “I am delighted that some state governments are making positive efforts in the improvement of citizens’ welfare and this includes Ogun State. We wish to also seize this opportunity in requesting Ogun State and other state governments to provide a level playing ground for the insurance companies within the states in the procurement of state insurances.

  • ‘Irregular power supply inimical to growth’

    Operators have advised the Federal Government to create an environment to facilitate the utilisation of the development funds released by the Central Bank of Nigeria (CBN).

    The Secretary, Association of Food, Beverage, and Tobacco Employees, (AFBTE), Mr Aderemi Adegboyega said the effective utilisation of the N200 billion Small and Medium Scale Enterprise (SMEs), N300 billiion Power and Aviation Intervention Fund (PAIF), among others, depend largely on the economic environment.

    He said government’s ability to create wealth and employment would help fast-track the economy’s growth.

    Adegboyega said the inability to meet the electricity needs of Nigerians was a major setback in growing the economy.

    He said irregular power supply remained an impediment to SMEs’ moderated industrialisation and economic growth.

    “There is the need to fast-track development in the power sector so that the loan to SME can impact positive on the economy,” he said.

    The former President, Association of National Accountant of Nigeira (ANAN), Dr Samuel said that the government should also address the current security challenges in the country.

    He said economic stability will not thrive without conducive environment that determines the success of private sector operators and inflow of foreign investors. He urged the CBN to work against improper disbursement and poor implementation of the scheme.

    A lecturer with Pan African University, Dr Austin Nweke said that the proposed credit would only promote economic activities in an environment with developed infrastructure.

    Nweke said that infrastructure development would attract investors and provide job opportunities for unemployed youths.

    “Serious monitoring and transparency in the distribution of the fund would also ensure the achievement of the loans objectives,” he said.

    Nweke said the loan innovation would, if properly managed assist in harnessing the potential of Nigerians and contribute to the growth of the national Gross Domestic Product (GDP).

    He also urged government to establish a monitoring team that would through the CBN facilitate the provision of loans to SMEs’ at single digit interest rate from commercial banks.

  • NCRIB decries undervaluation of govt’s assets

    The undervaluation of government’s assets is capable of slowing down the pace of development of insurance, the President, Nigerian Council of Registered Insurance Brokers (NCRIB) Mrs Laide Osijo, has said.

    She said this during a courtesy visit by representative of the World Bank to the Council, adding that there is the need for government to further protect the industry by living up to its responsibility, as the largest insurance client.

    Osijo opined that in situations where insurance assets are not properly evaluated, leading to inappropriate rates and premium paid, could lead to the diminution of the growth and depth of insurance penetration in Nigeria.

    She advised that government should make it a priority to attract foreign investment into the country in order to grow insurance capacity, among other things, and ensure that violation of insurance laws are met with appropriate sanctions.

    The NCRIB President commended the World Bank for promoting sustainable global financial development and craved its greater support to the Nigerian insurance industry.

    In his remarks, the Senior Financial Sector Specialist of the World Bank, Mr Anthony Randle disclosed that the visit was part of the Financial Sector Assisted Programme jointly facilitated by the World Bank and the International Monetary Fund (IMF), and coordinated by the federal government, to distil information and about how best the financial services sector could be improved in Nigeria.

    He said part of the issues to be handled by the joint project was to find out and advise government on reasons for low insurance penetration in the country in comparison with some other countries of the world, with a view to seeking a lasting solution to the problem.

  • Firm decries influx of substandard steel pipes

    Firm decries influx of substandard steel pipes

    The need for Nigerians to patronise made-in-Nigeria goods has again been brought to the frontburner with the Managing Director of Nigeria Gas and Steel Ltd (NGSL), Hasib Moukarim, adding his voice to the call.

    Moukarim, who made the call in a chat with journalists, said substandard steel pipes and tubes from Europe have flooded the market edging out higher quality local products.

    Imported substandard building materials, Moukarim said,  have been the major cause of collapsed buildings that dot the nation’s landscape as most Nigerians go for them (substandard materials) because they are cheap compared with the ones manufactured locally.

    “Due to the cost of manufacturing, most of our local manufacturers have either packed up or are producing at costs higher than the imported ones. Some of the imported materials do not conform to any form of standard specifications.

    “Most of the materials are made to European standard and, therefore, unsuitable for the tropical climate in sub-Saharan Africa. In most cases, “C” grade materials, which are very close to their expiry dates, are imported by unscrupulous businessmen who are ready to make huge profits at the expense of the lives of Nigerian users,” he said.

    Moukarim charged the Federal Government not to succumb to the pressure by selfish industrialists to drop the quality of construction steel.

    He said there was a need for the government to intervene to enable the sector maximise its potential and boost trade and employment.

    Building professionals, such as architects, structural engineers, fabricators and consultants, said Moukarim, could help to reduce the high cost of locally-made building materials by considering cost advantage.

    His words: “Access to decent accommodation in Nigeria will continue to be elusive until the scarcity and prohibitive cost of conventional building materials and components are checked. Stakeholders need to look for cost advantage in soliciting for building material for clients. By soliciting the right steel for housing construction of warehouses and buildings, the client gets the cost saving and the professionals get the credit.”

    He said foreign products are not in any way near the recommended international standard by the Steel Tube Institute of North America which recommended  ´Hollow Structural Sections´ (HSS), a type of steel tube that has greater strength to weight ratios than wide flange beams.