The Nation Newspaper

Category: THE CEO

  • How identify your skills

    Employment experts agree that skill identification is essential to a successful job search. Employers want to know what it is you can do for them-not just what you’ve done for someone else. Knowledge of your unique skills is needed to successfully complete an application, write a resume or answer interview questions. Skills Identification is a key initial step towards new employment.

    Webster’s New World Dictionary defines a skill as “a great ability or proficiency, expertness that comes from training, practice, etc.” A simple definition is that a skill is anything you can do right now.

    Everyone has skills, hundreds of skills, many of which employers are looking for in an employee. Yet most people can only identify a few skills and are generally unable to describe them to an employer. Employers need to hear what you can do. If you’re looking at purchasing a product that will cost you thousands of naira a year for many years, you also would want to know that it can do. The more skills you have identified, the easier it is to convince a potential employer that you have what it takes to do the job.

    Skills categories

    Job skills

    job skills are those skills specific to a job or occupation. An administrative assistant is skilled in typing, word processing, answering telephones, company correspondence and filing. An accountant would list accounts receivable, performing accounts payable, payroll, figuring taxes, using a 10 keys adding machine and computer accounting programs. A salesperson would include customer service, record keeping, order processing, inventory management, billing and product displays.

    Job skills are important to employers for obvious reasons. These are the specific skills they look for in a candidate to accomplish the duties of the job. Job skills do not always come from employment. Along with the skills you used in previous jobs, you may have developed job skills through education, hobbies, community activities and life experiences. Common activities such as shopping, managing finances, balancing a bank account, hosting a party and teaching a child all contain potential job skills.

    Self-management skills

    Sometimes called “personality traits,” these self-management skills are skills you use day-to-day to get along with others and to survive. They’re the skills that you unique. Sincerity, reliability, tactfulness, patience, flexibility, timeliness and tolerance are examples of self-management skills. Employers look for these skills in candidates as evidence of how they will fit into the organisation. How a person will fit in is an important consideration to employers.

    Transferable skills

    These are skills that can transfer from one job or occupation to another. They may be either self-management or job content skills, and may or may not have been developed through pervious employment. For most jobseekers it’s very unlikely that they’ll find a job that is identical to their opportunities. It’s also important to look for ways to express this transferability to a prospective employer.

    Duties

    Many people have trouble distinguishing between their skills and duties. Duties are the basic functions of an activity. Skills are tools to accomplish those functions. Duties or functions are a part of any organised activity, whether it’s employment, volunteer work or hobbies. A simple example is the management of a lemonade stand. The basic duties of a lemonade stand owner might be to manage lemonade operations including product, marketing, distribution and finances. These are many skills needed to accomplish these functions including: mixing, measuring, planning, sales, customer service, writing, cash handling, record keeping, maintenance, timeliness, dependability, accuracy and motivation. A complete list of skills would be very long.

    Writing out the duties or functions of an activity first can be useful way to begin identifying skills. When presenting your skills to an employer, it’s best to tie them to specific activities in which they were used. It’s not enough to tell the employer your skills: you need to be prepared to tell where, when and how you used those skills.

    Writing your skills

    Identifying, listing and describing your skills isn’t an easy task. However, it’s critical to job search success and you should plan to invest the time needed. Listed below is an outline for skills identification that has been successfully used by many jobseekers.

  • Jobs in a china shop

    Jobs in a china shop

    Local and foreign investors are looking towards the ceramics industry where Nigeria’s abundant raw materials guarantee returns on investment. With increased investment, experts believe the sector can create an estimated 1.2 million direct and indirect jobs, reports Okwy Iroegbu-Chikezie.

    Contrary to what many believe, the challenge facing Nigeria’s once  vibrant ceramics industry is not the lack of government’s patronage, but rather, lack of requisite skill and manpower.

    “There is a lack of significant number of professionals with appropriate skills and expertise in the ceramics manufacturing business in Nigeria,” Professor of Ceramics Engineering and Chief Executive Officer, Epina Technologies Limited, Patrick Eguakhide Oaikhinan,  said.

    He told The Nation that there is also absence of avenues for people interested in ceramics manufacturing business to pursue their ambitions, as no university or higher institution offers training in ceramics science/engineering/technology in Nigeria.

    He pointed out that the gap in the requisit skills is a big blow to the captive industry, saying that our local ceramics manufacturing businesses are struggling to process their own raw materials. He attributed the scenario to lack of knowledge of the chemical and mineralogical compositions, as well as the physical and mechanical properties of these raw materials.

    Bad asOaikhinan’s picture of the nation’s ceramics industry may be, it is also an eye opener to the tremendous employment opportunities that exist in the sector, particularly now that local and foreign investors are said to be turning attention to the sector with a view to exploiting the investment opportunities therein.

    Already, experts project that given the size of investment expected to come into the industry, the sector looks good to provide the stimulus for the actualisation of the current administration’s transformation agenda, as it has the capacity to create an estimated 1.2  million direct and indirect jobs.

    Oaikhinan explains: “We have various departments that can create these jobs. There is the raw materials unit, as well as the processing unit across the industry. We have the body forming unit, the drying and firing unit, the glazing unit, inspection and packaging unit and laboratory and quality control unit.

    He said the glazing unit is an industry on its own. Assuming that we have 40 sanitary wares manufacturers which can engage 500 Nigerians directly, in total, 20,000 people would have been engaged. In ceramics we have over 15 strong areas, such as floor and roof tiles, table wares, pipes, technical ceramics and porcelain, among others that can engage 500,000 Nigerians, he stated.

    Oaikhinan said the indirect jobs capacity of the nation’s ceramics industry are quite huge.

    “People will work as distributors, marketers, carpenters, brick layers, interior decorators, among others. The icing of the cake perhaps, is the Professor’s disclosure that a research he and his team carried out showed that over 51 per cent of the estimated 1.2 million jobs creation capacity of the industry are comprise mainly of women.

    He also said his company is now training young school leavers who don’t have prior skill in ceramic engineering to encourage them to establish modular refineries. He noted that a standard room size can be used to run a functional ceramics industry.

    He said the need for Nigerians to have skills in various aspects of the ceramics industry had become necessary because globally, the ceramics sector had become a lucrative industry with market size projected to reach about $408 billion by 2018.

    He said if policy makers tap into the industry fully, the nation’s non oil sector would be revamped.

    He said approaches have been made to the Nigerian Universities Commission (NUC) to discuss the possibility of establishing Departments of Ceramics in the universities and polytechnics. He said he is awaiting their response .

    Meanwhile, in India, for instance, about 5.5 million people are directly and indirectly employed by the tile industry, which is a sub-industry of ceramics, according to Managing Director, German Engineering Federation (VDMA), India, Rajesh Nath.

    The thinking is that India’s success could be replicated in Nigeria, considering the fact that Nigeria’s abundant solid mineral resources can support local manufacture of ceramic products.

    If fully tapped, the nation would change from its position as the nineth world’s consumer and net importer of an estimated $600 million of ceramics to an exporter thereby creating millions of jobs.

    The former Director-General of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mr. John Isemede, said Nigeria as a nation, has to look inwards and develop the raw materials that are abundant in the country,  adding that, the type of things imported into the country are not things that should be imported into the country in this 21st century.

    “What people are going to the far East to import, we have the raw materials here in Nigeria, why we are having problems in Nigeria is because the private sector is not working with the universities and vice-versa. What this professor (Oaikhinan) wants to do is to give to Nigerians what will create jobs and help the economy grow,” he noted.

    Currently, most of the ceramics needs of the country are met by imports from Asia and Europe, as several local companies which delved into the industry in the past fizzled out as a result of policy somersault, smuggling, influx of substandard products, absence of skilled personnel and lack of processing firms.

    Experts, however, say that with utilisation of the nation’s abundant solid mineral resources in the local manufacture of ceramic products, riding on the back of renewed interest by investors, the move will not only constitute a strategic effort at diversifying the economy, but also create jobs and new wealth.

  • ‘Access to agric loan vital to achieving food security’

    ‘Access to agric loan vital to achieving food security’

    A major constraint to the agricultural sector’s growth is access to loans. The Managing Director/Chief Executive Officer of the Bank of Agriculture (BoA), Dr. Mohammed Santuraki, says the bank has been repositioned to address this challenge. BoA’s warehouse receipt initiative, he says, will also assist farmers to overcome the challenge of storage facility, which forces them to sell produce at less profitable prices. He speaks on the need to recapitalise the bank, its loans recovery efforts and other major issues, in this interview with FRANK IKPEFAN.

    What have you done since you became the bank’s chief?

    When we took over the then Nigeria Agricultural and Cooperative Bank (NACB), as it was then called, the institution was in comatose. It was more or less like a dying institution largely because the bank did not have sufficient lending resources and it had a lot of non-performing loans. We can also say that risk management was very weak. Most of all, staff morale was very low because as you know, the NACB was the result of a merger of three institutions: Peoples Bank, the then NACB and then part of the FEAP.

    So that was the situation when we came. The government was actually not paying too much attention to the bank. When we came, some of my friends did not know that the bank was still in operation. What we did was to put in place things that would turn around the fortunes of the bank. After nearly four years, we are very happy that the bank has been fully repositioned, of course, with the help and support of the stakeholders.

    Since we arrived four years ago, we have been able to bring in additional resources totaling N28 billion to the bank because of some of the efforts we have done. We have rebranded the institution from the Nigeria Agricultural Corporative and Rural Development Bank (NACRDB) to the Bank of Agriculture (BoA). New corporate colour, new branding. It is not just the colour, what we want to do is work on the mind of the people to present ourselves as a new institution.

    When we came, the operations of the bank were largely manual and we have computerised the bank. We have various IT projects going on; about 13 of them, some of them have been completed. Some of them we are still working on. We are rolling out the computerisation initiative branch by branch. We are taking on branches as we progress. Just to summarise, our transformational change was based on four points; the first point is modernisation. For modernisation, we meant rebranding and the issue of bringing in new technologies, we have substantially done that.

    We also did institutional refocusing mainly  to refocus the institution on its core mandate, which is providing loans to farmers; small, medium and large, and along the whole value chains that are for production, processing, marketing. So we will focus on the institution, improve the credit risk management framework, which is very important for any lending institution because if your risk management framework is not solid, you will create substandard assets which leads to non performing loans.

    The third one is work force enhancement. This is bringing our people up to speed in terms of training in the areas of strategic support, core competences such as lending, deposit administration and technical issues lsuch as IT. We have seriously enhanced the level of the skills of our people. We also did operating model review. But that has been a bit interrupted because of the planned partial privatisation which is obviously going to lead to a major review of the way the bank runs.

    How has modernisation affected the programme?

    The modernisation, which I told you earlier, has two focuses: the rebranding and bringing in of new technologies, which also involved the retooling of our offices. First, I think the rebranding has had a tremendous effect because we have come out as a new institution. The NACRDB brand is very strong, no doubt about that, especially in the rural areas and so on. What we have done is to refresh and we are a much more visible institution. We are now preferred partners for a lot of stakeholders in the agricultural domain. For example, as part of the increased visibility we have been able to get, we currently have 16 ongoing partnerships with governments and other ministries departments and agencies (MDAs) that are involved in agricultural production. What we do with this collaboration is that we create funds with the government and other interested parties. They put money, we put money and then we lend the money to their farmers.

    As far as this is concerned, we have about 16 of such going on and we have attracted about N11 billion with respect to that – fresh funds that came in from our partners to pursue this programme.

    On the issue of technology, this has eased a lot of things. We are adopting the 21st Century approach to doing business and our branches are being computerised. Our communications are also very up to date. In our head office, we have a desk of breed data centre which we set up with facilities where all the data in the bank is housed and where all the technology is distributed to the branches. We are now piloting our mobile money services and BoA Green Cash. We are doing it with a technology partner called Cellulant. Very soon, we are going to roll out that scheme. This is going to be the standard for rural and agricultural payment system and we are going to leverage the farmers’ registration activities of the Federal Ministry of Agriculture and Rural Development. We are going to leverage the customer base we have there in order to push this card. Incidentally, the consultant that worked on the farmers’ registration is the same we are using. So there is a lot of interface as far as that is concerned. Technology is also reducing the cost of delivery and increasing penetration and financial inclusion which form part of the bank’s major objectives.

    How have you been able to achieve the bank’s mandate of providing loans?

    Well, in the last three years, we have been able to mobilise additional funding to the bank. Over the last three and half years that we have been in the management, we have disbursed over N18 billion in loans to about 471,000 beneficiaries, and we believe that we have been able to create 2.4 million jobs. That is the impact we have created and we think that this is great and with the continued availability of additional resources, we are going to do more.

    Can farmers access some of these loans without any collateral?

    Right now, we have a focus on small scale farmers. Like you know, the bulk of food production in this country, may be between 80 and 90 per cent, are done by small scale farmers. The tendency is that you are going to get more requests from the small scale farmers in terms of the aggregate request and so on. We have three categories of loans in terms of values. We have the micro loans, which are up to N250,000. Then we have the Small and Medium Enterprises (SMEs) loan, which can vary from N250,000 to maybe, up to N50 million. Then we have agribusiness loan which is actually for the large scale farmers. It is anything above N50 million.

    For the small scale farmers, there are micro loans N250,000 like I said. Usually, we disburse these loans through cooperatives and farmers’ groups. For those categories of loans, you do not require any collateral. What you do require is somebody to guarantee you and that person can also be a part of the group. What we rely on is some kind of cross guarantee. For the medium scale loans, yes, usually we require collateral, but there are all kinds of new schemes now. There is a Nigeria Incentive Risk Base Agricultural Lending, which is a Central Bank of Nigeria (CBN) initiative providing some guarantee for agricultural loans. What it does is that the system guarantees part of the loans and reduces the level of collateral required for the loan. So, that is possible. And we also have creative arrangement where agricultural loans can be secured on the basis of the contract from your off takers. So what we are trying to do is improve the link between production and the industrial sector, which has actually been lacking, and that has been one of the reasons agriculture has moved the way it shouldn’t have. I mean if we have large scale processors who are really buying commodities in bulk, what it will do is to push up production and therefore, farmers will be encouraged to produce.

    And access to us is very easy. We have about 136 outlets throughout the country. We have six zonal offices; an office in each geopolitical zone. So, we are present, especially, in the rural areas. In some of the rural areas that we are situated, our bank is the only institution in some of those areas. What you find is that one part of us is doing agriculture financing and the other is doing non-agric lending. We also render the normal banking services. Some local governments and rural enterprises pay salaries to their staff through our banks and so on. Apart from the agricultural micro loans, we also do non-agric micro loans. Anything up to N250,000 for micro activities, artisans, tailors and those kinds of small levels. We also do that in addition to our agriculture and rural mandate and of course, that part of our mandate was inherited from Peoples Bank. So we do all those things that the Peoples Bank used to do. I mean some of these things are just a misconception. People think it is difficult to get loans from banks generally and then conclude that it would be difficult to get agricultural loan. What you need to do is ensure that you have the farm or business that you want to finance because ours is a supervised scheme, which means we have people who will come to your farm to take measurement to see what you are doing. We give you the first disbursement and then when you have done that correctly, we give you the second to ensure that you are really an agricultural entrepreneur or a small scale farmer.

    Which aspects of the agricultural value chain is the bank not active in?

    I think I must give credit to the current Minister of Agriculture because what he has done since he came has redefined agriculture to include everything throughout the value chains: production, processing, storage and marketing. Before we came, NACRDB had suspended storage and marketing loans because they believed those were not part of agriculture. But you know, quite arguably, they are very important part of agriculture because the challenge of agriculture is that when a particular crop does well in a season, everybody moves into that crop and then you have a bloat, and then the prices crash. The following season they leave it and then there is scarcity, then prices go up, then farmers come back again the following year.

    This happens because of lack of adequate storage and proper value chains. If you have marketing accumulators as we call them, who will actually buy these things in bulk, then the farmer is better and able to manage his production. So, we have reintroduced the marketing loans, which we believe is very important. We now have loans for storage, marketing and part of what we are doing because of the efforts that we are putting in that area is that recently, I led the working group for the establishment of the electronic warehouse receipt system, which we launched under the Nigeria Commodity Exchange.

    Now, what we are trying to do with that is to improve access to finance because if we have a proper warehousing system, the farmers can bring crops to store, get a receipt and use that receipt to go to a bank to collect a loan while these crops act as security. The irony of agriculture is that prices are lowest during harvest because of the supply and then farmers are usually compelled to sell at harvest because they don’t have money.

    So, if they have the facilities where we have a warehouse receipt system then they will be able to store their crops and wait until the prices go up to be able to sell. That is one of the schemes we have just launched and we are committed to the project. Right now, we are financing receipts that are issued by the recognised warehouses.

    Another thing that it does is to improve volumes because commodity grain trade depends on a lot of volumes. If you have volumes and consistency then the trade will be very vibrant. With the proper warehouse receipt system we are piloting in this country, once we mainstream it and the adoption becomes nationwide, you are going to have better links with the agricultural sector and the industrial sector. If you look at the countries where their agriculture is very vibrant and even back to the 60s when we had the marketing board, they performed a very important role. Their role is to accumulate; they buy from the farmers. So farmers have a market, they sell and then the market (board) accumulates and either sell to the export market or sell to the industrial users.

    Now with the scrapping of the marketing board, no institution has actually come out to take their place. So, the farmers are left on their own as there is no link with production and marketing. That is where we think the aspects of marketing, storage and processing are very important.

    Another area we have revived the bank’s participation is in the area of processing. In the past, the bank was looking at processing as a different business. But it is all part of agricultural business. We now have facilities for processing; storage and marketing. Initially, the concentration of our portfolio was on the production and in the beginning of the value chain, but now increasingly, we are shifting the bank to participate in the downstream of the value chain.

    Can we have a percentage distribution of your total lending?

    I don’t have that right now.

    What are your programmes and their targets?

    We have two new products: one that targets youths, which is Youths in Agriculture Revolution in Nigeria (YARN) and the other which is Grow and Earn More (GERM). You can see the word YARN as a youth word. What we are trying to do is to come up with acronyms that fit the occasion we are trying to target. For this, we are targeting the youths especially, very educated youths and the loan limit for that scheme is enhanced up to N1million. This is for youths who have been trained. We are working with Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) and other enterprise development centres. What they do is that once the youths have experience and may have undergone the training, we now come in with the intervention.

    Similarly, we have for women, the Grow and Earn More. For women, we found out that women are good borrowers. They usually pay back because of family concern and then the impact you create when you give loans to women is usually very significant because it impacts the family and so on. So, we have those schemes that we are running. For the youths, what we do is that during service orientation for corps members, people invite us to come and give talk to youths so that we can ignite their interests in agriculture. Those are the two programmes we have.

    How many youths do you target  for this scheme?

    Our initial budget because of limitation of resources is N1billion funds for youths and N1billion for women. We are looking at an average of may be 750,000. We are more particular about the quality rather than the numbers. We want economic activities that are reasonable and sizeable so that you can have youths employing may be five to 10 people. So, that is what we are doing. Initially for N1billion, we are targeting about 1,500 for each. What we want to do is come up with a system that works, that can be replicated.

    Looking into the future, what do you have to offer?

    In the future, we want to expand the level of our activities. We are pursuing the recapitalisation of the bank; we are still not there yet. Some of our stakeholders are yet to pay up some of the committed resources and then of course, as you are aware, the government is partially privatising the bank, the two banks actually; the BoA and the Bank of Industry (BoI). They are all slated for partial privatisation so we are at the moment working with the Bureau of Public Enterprises (BPE) in order to achieve that.

    That is one. On the issue of the current programmes that we are doing, we still have a lot in the pipeline. For example, we still have additional collaboration agreement that we are pursuing with our partners, so we are still going to drive that. We have the issue of ongoing computerisation programme. For us, those are the key areas we are trying to strengthen.

    How far have you gone with the issues of non-performing loans and recovery?

    We have done significantly well because we set up a new independent loan recovery unit and I can tell you that the unit has done very well. I can say that in the last four years, we have recovered about N22 billion because of the efforts of the new loan recovery unit. Apart from the loan recovery unit, we have also set up the risk management unit. Our loan process now is much more rigorous. In addition, we have also set up internal control department to complement the efforts of audit department.

    What changes did you bring to your risk management framework?

    In line with the new emphasis on risk management framework from the CBN, what we did was to come up with risk management framework. We got JPMG professional services to come up with a risk management framework for us. We now have a full fledge risk management which looks at every risk from liquidity risk to market risk and of course, credit risk. As part of our credit processing, before a credit is approved, it has to go through risk management. The bank did not  have that before. So, the people, who are in risk management, don’t usually have interactions with the customers. They are more neutral and are able to exercise their opinions better without creating bottlenecks for the process.

     

  • Flour Mills gets new chairman

    THE Board of Flour Mills of Nigeria PLC (FMN) has announced the appointment of Mr. John George Coumantaros as its new Chairman.

    This  follows the retirement of Mr. George Stavros Coumantaros, as Chairman of the Board of Flour Mills of Nigeria Plc, after the conclusion of the company’s 54th Annual General Meeting (AGM) on September 10.

    Born in 1961, Coumantaros, who graduated from Yale University with a B.A. in History in 1984, is an experienced and successful entrepreneur on the board of several international firms.

    He began joined Flour Mills of Nigeria in 1984 and was appointed to its Board as a non-Executive Director (ED) six years later. He served as non-Executive Vice Chairman since 2012 before his appointment.

    He is Chairman, United Cement Company of Nigeria Limited, Calabar, Cross River State. He also  on the Board of Oxbow Carbon LLC, a leading international energy company, and a director of ELBISCO, a fast-moving consumer food business in Athens, Greece.

    Coumantaros was  conferred with the title of Founder/Chairman Emeritus and remains on the Board as a non-ED for Life.

  • ‘How NSE can woo firms for listing’

    ‘How NSE can woo firms for listing’

    Many telecommunication and oil and gas firms are not listed on the Stock Exchange, despite doing well. Yet, they are needed in the market to boost investments. How can they be brought in? It is by giving them incentives, says Group Managing Director of BGL Plc, Mr Albert Okumagba in this panel interview. Capital Market Editor TAOFIK SALAKO was there.

    Less than five per cent of Nigerians participate in the stock market. What should be done to deepen participation in the stock market?

    It is important to note that a lot has been done by the new management of the Nigerian Stock Exchange (NSE) in recent time. These efforts have increased interest in the Nigerian stock market and would continue to stimulate interest in the market for the rest of investors at home and abroad.

    Improved trading platform, market transparency, corporate governance drive and market information, are areas the management of the Stock Exchange deserves commendation among others. Additional incentives in the areas of competitive transaction costs, stricter enforcement of listing and trading rules and regulations, as well as expansion of market depth are other areas that could attract investors to our market.

    How will you assess the level of foreign investors’ participation in the market, especially with the security challenges?

    The attractive valuation of most of the stocks on the Nigerian stock market and very competitive real return from the economy, makes it difficult for foreign investors to take their attention away from our market.

    The return potential, as a major frontier market, more than compensates for the risks that insurgency in some parts of the country pose to foreign investment.

    We are, however, of the opinion that the earlier we are able to overcome this challenge, the better for the capital market. All stakeholders in the market, including the Securities and Exchange Commission (SEC), NSE, Chartered Institute of Stockbrokers and other trade groups, are interfacing with foreign investors to allay or clarify risk perceptions.

    What is your take on calls for legislative actions that will compel firms to list on the stock market?

    Getting companies to list on the Exchange is a laudable idea and a good step in the right direction. It is however arguable that forcing companies to list on the Exchange might send a wrong signal on the attractiveness of the Nigerian stock market as a beneficial platform.

    While I recognise that there are sizeable entities outside the market across the oil and gas, telecommunication, fast moving consumer goods (FMCGs) and conglomerates that would deepen the Nigerian capital market by listing their shares on the NSE, I am of the opinion that the stock market should woo them with incentives that create significant attraction to list their shares without compromising the corporate governance and transparency of the market.

    A good place to start, which the current management is driving, is the review of incentives such as listing costs and fees. The Securities and Exchange Commission (SEC) is also very eager to see that more companies are listed on the NSE.

    Again, we have argued that the federal government could lead by example by executing some of the privatisation of public enterprises programmes through the stock market. The power sector privatisation, in which 18 power firms were sold to private investors, is a classical case in point. The sales of the NIPPs are still ongoing with little or no consideration for the use of the capital market platform. We believe that if government executed these transactions through the stock market, the desired $1 trillion market capitalisation target can be reached easily while providing credible examples for multinationals and largely indigenously owned companies to follow.

    How eould you rate the operations of market makers?

    Perhaps the presence of market makers would have cushioned the impact of the stock market meltdown that greeted the economy a few years ago. All around the globe, market makers play a very important role in both the equity and bond markets. The major role is liquidity provision and so they stabilise the market by standing ready to intervene at moments of scarcity or excess supply of securities. Market making is too important a policy to be left out of the operation of an effective and efficient stock market.

    However, as good as the operation of the market makers look, they hardly can perform optimally without the existence of a vibrant market for securities lending. Unfortunately, securities lending is as good as nonexistent in Nigeria’s capital market today despite the provision for it. Hence, market makers have been curtailed by the inadequate liquidity for securities lending in the market. We are however arguably in the right direction, with the legal structure in place, it is a matter of time before appropriate private sector organization step in to provide the securities lending services.

    Will the increasing use of technology to drive stock market transaction not lead to abuse; and erode the roles of stockbrokers?

    The X-GEN, which is the new trading platform used by the NSE, supports seamless remote trading and offers benefits such as direct market access and automated trading by investors through their dealing houses’ online platforms. The X-GEN is highly scalable and therefore able to cater for wider participation by retail participants via various devices like smart phones which are easily accessible. In other words, without compromising the importance of certified brokers, the market has now been further decentralised to investors at different levels. This democratisation of trading is also underpinned by SEC, which ensures that risk is still properly managed.

    A certified stockbroker’s roles transcend trade executions for parties. A stockbroker is exposed to and possesses skills in equity valuation, bond valuation, corporate finance, portfolio management, alternative investment, derivatives and commodities. These combined attributes make such a stockbroker an expert fund manager, financial adviser and investment analyst amongst others. Therefore, beyond just entering trades, there is a lot more that brokers can offer that would make non-brokers to still require their services. In fact, the remote trading access to investors that the X-GEN platform promotes complements the skills of stockbrokers as it provides them room to focus on wealth management, fast day trading, and exotics among others. This incidentally happens to be one of the arguments being put forward as a case for the Bill to repeal CIS Act.

    However, it is not impossible that some dealing members allow non-certified brokers to trade through the remote platform from their offices; it is however a major infraction of market rules and also exposes such dealing members to risks that are of high magnitude due to high probability of errors. The incentive for an average dealing house to take such risk is very low.

    How can a viable private-public partnership that can be used to stimulate the development of the capital market be built?

    The task is easier today considering the wide consensus across board- public and private sector, on the importance of the capital market to economic growth and development in Nigeria. You will recall that one of the things we were able to achieve two years ago as a precursor to the ongoing recovery of the stock market during the period was getting the Federal Government to implement palliatives for capital market operators. This template would be utilised to support the development of the capital market in the future. Also, the CIS Annual National workshop has remained a strong platform for the engagement of capital market stakeholders and policy makers on national development issues that affect the capital market. It is also an engagement platform for members who are market players, regulators and the policy makers- the government. It is part of the larger efforts to use the capital market as a catalyst for growth and of course development. We would continue to improve on the performance every year and expand the scope in 2015 and beyond.

    As the president of CIS, what are your priorities?

    The status of CIS as the foremost capital market professional body needs to be enhanced.  This requires a combination of brand restructuring and improved access and engagements with stakeholders. In this regards, we will ensure that in the next 18 months, CIS moves to a befitting structure that would house our secretariat. The suitability of the institute’s structure would go a long way in having impact on the institute as a brand. We would also embark on brand projects that would situate the institute in the rightful place in the financial market and the Nigerian economy and make it a strong brand across Africa and globally. An important component of this is to work with the National Assembly on the speedy passage of the CISI Bill.

    To expand Nigerians’ rate of participation in the capital market and improve national savings mobilisation for critical investment growth, our goal is to expand the access to our certifications by varied but related professionals. We would therefore immediately embark on the expansion of the certification programmes as well as the frequency of the examinations. We would also align the programme to America’s FINRA and UK’s CISI curriculums in the light of the unfolding sophistication of our markets. We intend to transform the examinations from paper based to electronic format to expand access at minimal costs to both the institute and members at all levels.

    The relationship between the Institute and other professional bodies would be improved on while expanding local and international alliances. One issue that needs serious attention is the status of CFA charter holders and CIS certifications in relation to stock market trading permits. We would immediately resolve this and similar issues in our first 12 months in office. Besides, the process of graduating through membership to fellow would be immediately reviewed to remove the ambiguities and create a clear process and procedures for members to proceed from Associate Members to earning the Fellowship of the Institute.

    While it is true to say that the institute is not as popular as some of its peers, its popularity has however, grown over time. Two of the major avenues through which the visibility of the institute can be made more pronounced are strong partnership with some of the listed companies and sponsorship of prominent events. At CIS, we are putting in place structures that would make us build a brand that would sell and therefore make companies to seek partnership with us. Since this appears to be a long term plan, in the interim, we plan to extend the hand of partnership that would be mutually beneficial to stakeholders.

    You have been talking about growing the membership of the Institute. What is your strategy for this?

    A lot has gone into expanding the membership base of the institute in the last few months. Some of the strategies being implemented to increase the names on the institute’s register of students and members include the review of curriculum and the variety of certification that the Institute offers with a view to making them more attractive and giving potential members many options. Also, the introduction of the monthly diploma certification exams for post-secondary school candidates posits significant potential for membership expansion. We are  reviewing the registration requirements for the Diploma certification to further broaden its scope to accommodate other professionals with interest in the CIS programme. This monthly conduct of examination is to run from this month to August 2015 with the requirement being Secondary School Certificate across West Africa.

    We are also expanding the CIS programme to the West African sub region and beyond in the long run. In this regard, all the exams will become bilingual-English and French, with exam centres computerised. It goes to say that the institute’s certificate becomes easily accessible by both Nigerians and non-Nigerians who are beyond the borders of the nation. Furthermore, a new curriculum scheme patterned after FINRA of America and CISI of the UK is to be launched.

    Your programmes will definitely be capital intensive. How do you hope to improve the financial standing of the Institute?

    Presently, our existing sources of revenue are registration fees, examination fees, sale of study packs and other materials and subscription. We, however, intend to add to these existing streams of income and also restructure the fees charged by the body across its various operation stages in other to make them competitive. The recent inclusion of diploma certifications offers opportunities to enhance our financial strength, while also expanding the scope of the Institute. We would further expand the diploma programme as a tool for revenue expansion. Furthermore, since there is a direct relationship between membership figure and revenue, the current effort aimed taking student population to 150,000 or more is another step in ensuring that the financial strength of the Institute is improved. We will sustain this process with significant emphasis on the Diploma programme without compromising the integrity of the Institute.

    One major challenge has been ensuring that members pay their annual subscription and membership dues on schedule. In this regard, we would immediately develop strategies to motivate members to pay their dues while enhancing the penalties for defaulting on dues settlement. For those who currently owe the Institute, we would develop a settlement process that helps them clear the backlogs while ensuring ease of payment. Our model may involve a review of the membership fees to encourage members to pay on schedule.

    One of the areas the Institute has not fully exploited is that of philanthropy and Corporate Social Responsibility (CSR). With millions of members in many large financial and non-financial companies in Nigeria, the Institute arguably has access to huge CSR support to fund credible projects it may decide to embark on. So, we shall explore this avenue to support our varied projects.

    What is the relationship between the CIS and NASD?

    It is one of partnership for regulation, compliance and professionalism. The same relationships exist between the Institute and other Self-Regulatory Organisations (SROs) like the NSE, FMDQ and others.

    However, the new leadership will like to improve on the already cordial relationships between the CIS and the other SROs and regulators. This is in a bid to ensure that both the Institute and the other SROs work together, along with other stakeholders, to facilitate further development of the market by increasing the depth of the market as well as bringing more companies for listing on the NSE.

  • ‘Why Nigeria isn’t reaping from global aviation market’

    ‘Why Nigeria isn’t reaping from global aviation market’

    To aviation expert Nick Fadugba, Nigeria has all it takes to play in the global market. But, the country, he says, cannot realise its potential because its airlines are “too small, weak and undercapitalised”. Fadugba, Chief Executive Officer, African Aviation Services Limited, tells KELVIN OSA-OKUNBOR, in this interview, that Nigeria is the butt of jokes worldwide for not utilising its “vibrant aviation market”.

    How can Nigeria stop foreign airlines from dominating its market?

    The air transport situation in Nigeria is becoming very interesting. From a few foreign carriers that were flying into Nigeria a few years ago, the number continues to increase by the day. Unfortunately, the foreign carriers have taken over the domestic market. This development has been accelerated by the unfavourable aviation policies being signed by our government with other foreign countries- a policy that grants them (foreign airlines) multiple entry points into our county. This is detrimental to the growth and development of the domestic arm of the industry. At the rate we are going, the multiple entry points policy would damage indigenous operators.

    But is it too late for government to rework the policy?

    It is very, very difficult. Once you have given away your market in a legally-binding air services agreement, it is difficult to renege on the contract.

    How do you tell a foreign airline that you have given, say, 10 frequencies, that you are reducing the number?

    Even if we do so, do we have local airlines that can readily fill the gap and provide the same efficient and high quality service? It has become a big problem for airlines in Nigeria because various Nigerian governments have been very generous in giving traffic rights, concessions, designations and entry points to non-African and African airlines alike. Meanwhile, Nigerian airlines are now left with just three per cent of the air traffic market to and from Nigeria. African airlines collectively carry only 20 per cent of the air passenger traffic to and from Africa. Nigeria has the largest economy in Africa as well as the most vibrant air transport market on the continent. It is hard to rationalise and justify why Nigerian airlines have such a small share of their own market. But the fact remains that Nigeria is a signatory to the Abuja Treaty of 2004 under which the Yamoussoukro Decision of 1999, liberalising African skies, is legally-binding. I believe that Nigeria should stand by the Yamoussoukro Accord and honour the Abuja Treaty.

    There have been agitations to liberalise the African skies but  some countries are kicking against it. What is the way out?

    The Yamoussoukro Accord was meant to open up the African skies to African airlines, but it has not been fully implemented by some countries. This decision is legally binding on African countries which have signed the Abuja Treaty of 2004, although some have still not enforced the Accord seemingly to protect their local airlines. Some countries are reluctant to enforce it and we have queried why they signed a legally binding agreement which they did not intend to implement. That is where we are today.

    The fact is that if you take Nigeria as an example, a few local airlines are in a position to respond to the competitive challenge posed by Ethiopian Airlines, Kenya Airways and others. For example, Arik Air has traffic rights between Lagos and Addis but the Nigerian passenger traffic is normally going beyond Addis. Most Nigerian travellers are not going to Addis Ababa; they are going to Dubai and to China. I would have wished that when Arik Air entered into that agreement they had negotiated traffic rights beyond Addis Ababa, or formed a partnership to feed traffic to Ethiopian Airlines and vice-versa. This would have been a win-win situation for the airline. Some Nigerian airlines are not yet ready to operate the regional and long haul routes that are currently available.

    How profitable is it for a Nigerian airline flying into Dubai head-to-head with Emirates?

    Arik Air has started operations into Dubai from both Lagos and Abuja; we hope it would be able to compete with other carriers on that route. But going by past attempts by our local airlines on this route, it has not been a good experience. For instance, the defunct Virgin Nigeria Airways tried this route for six months and then pulled out as it was losing too much money. We have allowed African and non-African airlines to have an unfettered entry into our local market and these carriers are now very well established. They (foreign airline) have diligently built up their customer base and captured market share. It will be very difficult for Nigerian airlines to successfully compete with these foreign carriers, but not impossible if they can provide an even better service.

    What can be done to address this situation?

    I believe it is time for a high level meeting of all aviation industry stakeholders to review where we are as a country, where we should be and how we can get there.

    What should be the agenda for such a meeting?

    We should review everything, including air traffic rights, market access, the Yamoussoukro Accord, the regulatory framework, aviation financing, aircraft fleet modernisation, aircraft maintenance, repair and overhaul (MRO), joint ventures and partnerships, airport and air traffic control infrastructure, and many other issues. It should be two or three days of intense deliberation on the aviation challenges and opportunities facing Nigeria and the way forward. We should address how we can salvage the aviation industry and collectively move it forward.

    There have been meetings such as this in the past which obviously did not yield result. What will make this one different and what is the way to go?

    What has happened in the past is that either politicians or regulators formulate policies and rules for the industry. It hasn’t worked and it won’t work. For instance, look at the national hanger project, as well as the recent national airline project which was conceived behind closed doors. It was no doubt conceived in good faith, but there was no open discussion. It can never work, especially in Nigeria where everybody is very vocal and have their own opinion on every matter. So I would recommend that we sit down together and find practical ways to transform the Nigerian aviation industry.

    Of course, as we have seen in the past, no matter how brilliant the proposals from such a meeting may be, there is no guarantee that in 10 years’ time the report will not be sitting on a shelf somewhere gathering dust. So, implementation will be the key to success. Nigeria has opportunity to become a major aviation hub in Africa but it seems to have frittered away those chances.

    Why is it difficult for Nigeria to float a successful national carrier?

    Ideally, in 2004, the government should have privatised the loss-making national carrier, Nigeria Airways, rather than liquidate it. The government of Kenya followed this strategy and Kenya Airways is now one of the leading airlines in Africa. Running a successful airline is a very difficult job. You need deep pockets, a viable business plan, competent management and an enabling regulatory and economic environment to run a profitable airline anywhere in the world. Many Nigerian airlines today are disadvantaged from the outset, in terms of their aircraft fleet size and commercial viability and the operating environment. Captain Nogie Meggison, Chairman, Airline Operators of Nigeria (AON), recently told the African Aviation Summit 2014 and 23rd Air Finance for Africa Conference and Exhibition in Addis Ababa that the AON has 26 airline members and with an average fleet size of about three aircraft.

    Now compare this to Ethiopian Airlines which currently operates 50 aircraft to 81 destinations across five continents with over 200 daily flights, and devoid of any real domestic competition. Government-owned Ethiopian Airlines has a turnover of over $2 billion and a net profit exceeding $200 million, so how can Nigerian airlines compete with such an airline?

    In specific terms how do we build capacity for Nigerian airlines?

    What I am saying is that in today’s world, for airlines to survive and prosper, they need a critical mass of aircraft and air traffic and an optimal route network. If you look at Arik Air, to its credit, it has most of the ingredients to be effective and efficient. It has the largest airline fleet in Nigeria, with over 20 modern aircraft, the largest route network and almost certainly the largest revenue turnover. So, the size and scale of an airline’s operations are important. It is very hard to compete against bigger African and international airlines with just a handful of aircraft.

    Access to finance and equipment is central to a profitable airline business. How can Nigerian carriers key into this strategy?

    Earlier this year, we organised the African Finance conference in Ethiopia where global leaders met to find lasting solutions to the problems of financing of aviation business. We also heard from several bankers who said it is difficult for them to finance small and weak airlines in Africa which lack business track record. I believe the message for Nigeria, especially if we take Ethiopia, Kenya, Egypt and South Africa as examples, is that airlines need a reasonably-sized fleet to be able to compete effectively.

    On the other hand, all airlines must start somewhere. Smaller airlines can succeed if they keep very tight control of their revenues and costs, or focus on uncrowned niche markets. Captain Meggison said the AON has 26-member airline. In my view, many of these airlines are competing on the same routes in the country and hence it will be difficult for all of them to operate profitably. I would like to see airlines in Nigeria enter into mutually beneficial partnerships and joint ventures with each other which would enable them to become more efficient and profitable. In fact, the AON should be championing this cause.

    What could the operators do to enhance their business?

    All the airlines in Nigeria are owned by shrewd business people who, in addition to wishing to provide safe and efficient air services, also wish to make a decent return on their significant investment. Combining forces could help achieve these two objectives. I would like the airline owners, at least, those that are willing, to sit in a room, lock the door, and ask themselves: ‘How can we work together?’If two or three or more Nigerian airlines joined forces they would have a larger fleet size and combined resources and would become more bankable and more formidable. I believe sincerely that Nigeria has all the ingredients for a successful airline industry but many of the players are too small, weak and undercapitalised to take advantage of the market opportunities. It is not a good thing for Nigeria that its airlines carry only three per cent of the international air traffic to and from Nigeria. There is no other country in the world that would allow such a situation, apart from those with no airline industry and no sizeable air traffic market. You can imagine what Kenya, Egypt, Ethiopia and South Africa, etc, think of Nigeria. They believe this is a joke. They can never understand why this is the case in Nigeria, of all places. In the aviation industry worldwide, nobody understands it. How can a country have such a vibrant air transport market and yet its own airlines don’t benefit from it? Every airline that flies to Nigeria makes good money, apart from Nigerian airlines. It is a paradox.

    What can government do to limit the frequencies and empower the domestic airlines?

    I posed a question to Captain Meggison during the African Aviation Summit 2014 held in Addis Ababa. I asked him to list in order of priority the three most serious factors which are holding the Nigerian airline industry back. Whether it is the stiff competition from foreign airlines; a non-conducive aviation regulatory environment in Nigeria; or whether the problem rested primarily with Nigerian airlines in terms of their business strategies which have prevented them from competing effectively? These are the three key areas I believe deserve attention.

    You see, government, and especially ministers of aviation in Nigeria should avoid the temptation of having vested interest in aviation projects; or having certain airlines which they favour. These practices have been the bane of the Nigerian aviation industry; and Nigeria has suffered the consequences. In this regard, I would recommend that government ensures that all aviation decisions are based on national interest, rather than personal interest. Government should be commended for waiving taxes on imported aircraft spare parts and, working closely with the Nigerian aviation industry, it should explore further areas of possible assistance, so as to remove barriers to growth. In short, the airlines are trying their best to succeed, but the regulatory and economic environment in which they operate is quite tough. I always admire them for their efforts, but I believe they could be more successful by forming partnerships and joint venture.

    African airlines have the highest insurance premium globally because of so many crashes. What does it portend for African and Nigerian airlines?

    Aircraft insurance is compulsory for all airlines. You cannot fly without it. It is not an option for airlines. They must have it. Now, the pricing of aircraft insurance is fixed by underwriters who are mainly based outside Africa, such as at Lloyd of London. Underwriters rarely visit airlines directly. They fix the price based on numerous factors such as market capacity, historic and current losses, the overall airline industry safety performance, the loss record of individual airlines, and the size and value of airline fleets. Aviation insurance brokers contend that the cost of insurance has been reduced in recent years.

    However, for many African airlines this may not have been the case. Unfortunately, according to International Air Transport Association (IATA) and International Civil Aviation Organisation (ICAO), Africa has the worst air safety record of any global region. Hence, its airlines are likely to pay more for their insurance cover. Also, due to their small aircraft fleet size, many African airlines pay proportionally more for their cover. In the main, large international underwriters do not rate small African airlines very highly. To reduce their costs, it is advisable that African carriers work closely with leading insurance brokers and try to put across a success story to underwriters.

    What is the way out for Nigerian carriers?

    I think as a way out, Nigerian and African airlines could consider forming groupings to negotiate reduced rates through collective cover. This can be tricky though, especially if the airlines are very different in size and have contrasting safety records.US-based Delta Air Lines has a fleet of over 600 aircraft, more than the combined fleets of all African airlines. With that number of aircraft and with its safety track record you can be sure that Delta will obtain a lower insurance rate than the average airline in Africa insuring a fleet of less than 10 aircraft.

  • ‘We’ve plugged pension loopholes’

    ‘We’ve plugged pension loopholes’

    The pension story is sad for many retirees. While waiting to collect their pension, some have collapsed and died. Others could not get theirs because the money was stolen. All these, says the Acting Director-General of the National Pension Commission (PenCom), Mrs Chinelo Anohu-Amazu, have changed with the coming of the Pension Reform Act 2014. She tells OMOBOLA TOLU-KUSIMO, in this interview, that pension fund can no longer be looted.

    How will the Pension Reform Act, 2014 impact on contributors’ lives and enhance national development?

    The Pension Reform Act 2014, which repealed Pension Reform Act, 2004 will consolidate the gains of reform, address the identified implementation challenges and provide the enabling legal environment to facilitate the creation of quality instruments through which pension assets could be best invested for infrastructure and real estate development. These fresh initiatives will assist us to consolidate the remarkable achievements recorded by the Commission in the implementation of the Contributory Pension Scheme (CPS) over the last 10 years for the benefit of contributors, and the entire economy while it also lays the foundations for the next decade in our pension regulation. The new legislation will strengthen our prudential regulatory powers and will enable us to put in place the necessary regulatory and supervisory framework to facilitate and accelerate the objectives of the reform especially in ensuring the safety of pension assets and hence, workers’ security in retirement. It will bring on board the informal sector of the economy and increase the threshold of pension contributions.

    How are you tackling employers who deduct pension contribution from their employees, but fail to remit to PFAs?

    The Pension Reform Act (PRA 2004) is clear on contravention of Section 11(7) of the PRA, 2004, which provides that any employer who fails to remit pension contributions within seven working days of payment of salary shall, in addition to making the remittances already due, pay penalty for the benefit of the Retirement Savings Account (RSA) holder. In pursuance of this statutory responsibility of ensuring compliance with Section 11 (7), the Commission deployed an application called Risk Management Analysis system for monitoring remittance of pension contributions of employees by employers. The application enables the Commission to monitor the status of the monthly remittance of contribution by all employers that at least one of their employees has opened a RSA. Defaulting employers are subject to the recovery process. In addition, the Commission has in place a framework for recovery of outstanding pension contributions with penalty from defaulting employers. The framework amongst others provides for appointment of Recovery Agents (RAs). Consequently, the Commission has identified and assigned over 15,000 employers to RAs to review their records and recover any outstanding pension contributions plus penalty. The Commission also follows up on complaints from workers against their employers for failure to remit pension contributions as when due. In the event where the employer refuses to remit the outstanding pension contributions of its employees within the time frame stipulated by the Commission, appropriate actions, including instituting legal action are taken.

    How are you monitoring Pension Fund Administrators’ (PFAs’) compliance with investment limits?

    The Commission monitors returns submitted by PFAs daily, weekly and monthly. The daily review monitors the authorised and unauthorised investments, while the weekly review focuses on compliance with per issuer limits.  The monthly review is a holistic review on investment activities of the PFA for the month. In the event of a PFA exceeding the investment limits, they are given a period of 90 days to rebalance the portfolio.

    What about delay in payment of retirement benefits by some retirees and unresolved customer complaints?

    The Commission monitors the monthly returns rendered by Pension Fund Custodians (PFCs) on all pension payments made by them on behalf of the PFAs. These returns include information on name of retiree, personal identification number, relevant month; amount paid and date of payment. The Commission reviews these returns against the approvals it granted to PFAs for the month in order to ensure that pension payments are made as and when due. In the event where a PFA delays in paying retirees then the Commission imposes appropriate sanction on the PFA. Also, once the Commission receives a complaint from a customer on the conduct of a PFA, the Commission in turn writes to the PFA forwarding the complaint and requests that the PFA provides proof of the resolution of the complaint within a timeframe. Thereafter, the PFA’s submission is reviewed by the Commission and if not satisfied appropriate penalty is imposed on any defaulting PFA while the customer is advised accordingly on the steps taken by the Commission to resolve the complaint.

    What is your take on safe investment vehicles and how are you exploring them to ensure more funds are channelled into the development of infrastructure?

    The Pension Reform Act 2004 and the Regulation on Investment of Pension Fund Assets (the Regulation) issued by the Commission clearly stipulate the allowable financial instruments in which pension fund assets can be invested. The list of allowable instruments as stipulated in Section 4 of the Regulation includes Equities (ordinary shares, global depository receipts), Federal Government Securities (FGN Bonds & Treasury Bills), State/Local Government Bonds, Corporate Debt Securities (such as bonds, asset/mortgage backed securities etc), Money Market Instruments, Open/Closed-end Funds, Infrastructure Bonds and Funds, Private Equity Funds. The efforts by the Commission to encourage pension fund investments in infrastructure and the real sector of the economy resulted in the expansion of the allowable asset classes in 2010 to include infrastructure funds, infrastructure bonds and private equity funds, among others. When these instruments are properly structured and available in the capital market, then pension funds can safely invest in Infrastructure. The Commission would continue to work with other stakeholders to realise this objective. Also, in a bid to ensure that pension fund assets contribute to socio-economic development, the Commission is currently working on initiatives that would enhance pension investments in affordable housing. This initiative is already incorporated in the new law which will definitely improve the life of every worker and retirees and the country generally. With the new law, contributors can now utilise part of the balances in their RSA to finance the acquisition of their primary homes. This, to a great extent, would enhance their living standards as well as positively impact on the construction, building materials and mortgage sectors of the economy.

    Give us an insight into PenCom?

    The National Pension Commission (PenCom) is an agency of the Federal Government of Nigeria charged with the supervision and regulation of all pension matters in the country. It was established following the enactment of the Pension Reform Act 2004. Prior to the reform, there were many problems with pension administration in Nigeria, which necessitated the reform and one of such issues was the absence of a regulator to perform oversight functions and ensure that appropriate rules on pension delivery were made and enforced. The PRA 2004 established a mandatory Contributory Pension Scheme (CPS) for the employees of the Federal Government and the private sector organisations with five or more employees. The CPS is contributory, fully funded, managed and kept in custody by licensed private operators, the PFAs and PFCs; and is based on individual portable accounts, the Retirement Savings Accounts (RSAs).

    Why is PenCom important and how safe are pensions?

    Our conservative and modest philosophy may not permit me to say how important PenCom is. However, by the time we look at the numbers in terms of where we were before the reform and our position today, you should arrive at the answer. First of all, the CPS has engendered a regime of a fully funded pension scheme with assets in excess of N4 trillion today. This has been a remarkable growth when compared to estimated pension liabilities of over N2 trillion before the reform. Over 98,000 workers have retired so far and are receiving their retirement benefits as when due without any hassles. In the past, they joined long queues and some even died in the process. In terms of safety, the pension fund assets are ring fenced. That is, there is a separation between management and custody. While the PFA manages the assets, the PFC maintains actual custody of the funds and these functions and the investment of the funds are all guided by the investment regulations issued by PenCom. The pension assets are only invested in safe and secure instruments. The Commission monitors this daily by requiring PFAs to submit daily valuation reports which are reviewed to ensure compliance. These are the things that speak to the importance of PenCom.

    You have been involved with PenCom from the reform stage, passing of the law, being the legal adviser, and now Acting DG, how has the journey been and what lessons have you learnt?

    The journey has been very challenging but rewarding when one looks at the successes recorded. Concerned by the magnitude of issues and lack of transparency in pensions in Nigeria then, President Olusegun Obasanjo constituted a Pension Reform Committee chaired by Mr. Fola Adeola. I served on that committee. It was the committee’s work that culminated into the PRA 2004. At the time, there was a lot of apprehension on the part of stakeholders, labour for example. Their concerns were understandable considering some not so pleasant outcomes of other reforms by government in the past. Ten Years, I am glad that having seen PenCom’s steadfastness in protecting the interest of retirees, Labour is one of our greatest supporters. We have tried to continue sustaining the reform by being proactive. That is why we embarked on a major review of the Pension Reform Act 2004 (PRA 2004) to strengthen the reform by expanding its coverage and enhancing benefits to retirees. We are pleased that both chambers of the National Assembly passed the bill. We now have a new law, PRA 2014 that has repealed PRA 2004. One of our strategic focus areas is to bring on board the informal sector of the economy where most of our active employees earn their living. However, the rules would be tailor made to suit their peculiarities. We have also made considerable progress in defining and implementing reforms, and instituting governance structures based on best global practices.

    What is your vision for PenCom in terms of expanding coverage, infrastructure, and enabling more sustainable and deep investments, among others?

    Our vision is to sustain and improve on the reform by ensuring that retirees are more comfortable at retirement. We also seek to expand coverage by bringing the informal sector to come on board. We seek to get pension funds to play a more active role in the economic development of the nation by, for instance assisting in solving the huge infrastructure gaps in terms of roads, power supply, housing, etc. However, we must emphasise that any investments that pension funds partake in must be through safe investment vehicles.

    The Commission had an inaugural World Pension Summit (WPS) Africa Special last month. What has it achieved with the programme?

    The WPS is the largest annual gathering of pension professionals worldwide where issues on how to advance the provision of pensions are discussed. The WPS Organisation is based in Amsterdam, the Netherlands where its annual summits take place and they have welcomed well over 1000 senior pension professionals from three continents across the globe since their inception. The partnership between WPS and PenCom to bring that wealth of experience to Africa is perhaps an indication of the confidence being reposed in PenCom over the successes of the pension reform in Nigeria. For the Commission, the Summit has provided a platform to find solutions to some of our pressing challenges in moving our industry to the next level. Major issues include discussions around Pension funds’ investments in infrastructure and real estate, enhancing contributor satisfaction through technological innovation, risk management and social security, amongst others. We also shared these learning experiences with other African countries. That’s why invitations were extended to all African countries, with speakers attracted from global thought leaders with diverse expertise.

    What does the future hold for PenCom and the pension industry and what is your message for Nigerians?

    The future appears bright indeed and quiet challenging. PenCom has a social responsibility to discharge. The Nigerian worker must derive the benefits of belonging to the CPS; and the country as a whole must be significantly impacted by the effective deployment of the pension assets. This is the challenge for us at PenCom and we must focus to deliver on it.

    What are your projections for the funds in the next five years?

    The value of total pension fund assets, which was N4.3 trillion as at May 31, 2014, had grown at an annual average rate of 25 per cent over the past eight years. In view of continuing efforts by the Commission to ensure compliance by eligible employers, voluntary introduction of CPS by the states and strategies being developed to bring in the informal sector workers into the CPS, it is projected that the value of pension fund assets may double within the next three to five years.

    What checks are in place at PenCom to ensure workers are not compromised?

    The Commission ensures that it recruits the best talent and calibre of staff with the right skills both soft and hard, and competencies required for delivering its overall objectives in the short and long term through a very rigorous recruitment and selection process. This process also ensures that the staffs possess the core values of the Commission which are transparency, responsiveness, integrity, professionalism and pro-activeness in their duties. All staff of the Commission are also requested to acquaint themselves with the ethical values and code of conduct of the Commission as stipulated in the Commission’s staff condition of service. Periodically, staff are also reminded by way of circulars, drawing their attention to the need to uphold high ethical standards and to abide by the code of conduct of the Commission, which stipulates the minimum conduct expected of staff of the Commission. Furthermore, welfare schemes and conditions of service of the staff of the Commission are continuously improved upon to ensure that staff are well taken care of and are not compromised at any point in time.

     

     

  • ‘We’ve plugged pension loopholes’

    ‘We’ve plugged pension loopholes’

    The pension story is sad for many retirees. While waiting to collect their pension, some have collapsed and died. Others could not get theirs because the money was stolen. All these, says the Acting Director-General of the National Pension Commission (PenCom), Mrs Chinelo Anohu-Amazu, have changed with the coming of the Pension Reform Act 2014. She tells OMOBOLA TOLU-KUSIMO, in this interview, that pension fund can no longer be looted.

    How will the Pension Reform Act, 2014 impact on contributors’ lives and enhance national development?

    The Pension Reform Act 2014, which repealed Pension Reform Act, 2004 will consolidate the gains of reform, address the identified implementation challenges and provide the enabling legal environment to facilitate the creation of quality instruments through which pension assets could be best invested for infrastructure and real estate development. These fresh initiatives will assist us to consolidate the remarkable achievements recorded by the Commission in the implementation of the Contributory Pension Scheme (CPS) over the last 10 years for the benefit of contributors, and the entire economy while it also lays the foundations for the next decade in our pension regulation. The new legislation will strengthen our prudential regulatory powers and will enable us to put in place the necessary regulatory and supervisory framework to facilitate and accelerate the objectives of the reform especially in ensuring the safety of pension assets and hence, workers’ security in retirement. It will bring on board the informal sector of the economy and increase the threshold of pension contributions.

    How are you tackling employers who deduct pension contribution from their employees, but fail to remit to PFAs?

    The Pension Reform Act (PRA 2004) is clear on contravention of Section 11(7) of the PRA, 2004, which provides that any employer who fails to remit pension contributions within seven working days of payment of salary shall, in addition to making the remittances already due, pay penalty for the benefit of the Retirement Savings Account (RSA) holder. In pursuance of this statutory responsibility of ensuring compliance with Section 11 (7), the Commission deployed an application called Risk Management Analysis system for monitoring remittance of pension contributions of employees by employers. The application enables the Commission to monitor the status of the monthly remittance of contribution by all employers that at least one of their employees has opened a RSA. Defaulting employers are subject to the recovery process. In addition, the Commission has in place a framework for recovery of outstanding pension contributions with penalty from defaulting employers. The framework amongst others provides for appointment of Recovery Agents (RAs). Consequently, the Commission has identified and assigned over 15,000 employers to RAs to review their records and recover any outstanding pension contributions plus penalty. The Commission also follows up on complaints from workers against their employers for failure to remit pension contributions as when due. In the event where the employer refuses to remit the outstanding pension contributions of its employees within the time frame stipulated by the Commission, appropriate actions, including instituting legal action are taken.

    How are you monitoring Pension Fund Administrators’ (PFAs’) compliance with investment limits?

    The Commission monitors returns submitted by PFAs daily, weekly and monthly. The daily review monitors the authorised and unauthorised investments, while the weekly review focuses on compliance with per issuer limits.  The monthly review is a holistic review on investment activities of the PFA for the month. In the event of a PFA exceeding the investment limits, they are given a period of 90 days to rebalance the portfolio.

    What about delay in payment of retirement benefits by some retirees and unresolved customer complaints?

    The Commission monitors the monthly returns rendered by Pension Fund Custodians (PFCs) on all pension payments made by them on behalf of the PFAs. These returns include information on name of retiree, personal identification number, relevant month; amount paid and date of payment. The Commission reviews these returns against the approvals it granted to PFAs for the month in order to ensure that pension payments are made as and when due. In the event where a PFA delays in paying retirees then the Commission imposes appropriate sanction on the PFA. Also, once the Commission receives a complaint from a customer on the conduct of a PFA, the Commission in turn writes to the PFA forwarding the complaint and requests that the PFA provides proof of the resolution of the complaint within a timeframe. Thereafter, the PFA’s submission is reviewed by the Commission and if not satisfied appropriate penalty is imposed on any defaulting PFA while the customer is advised accordingly on the steps taken by the Commission to resolve the complaint.

    What is your take on safe investment vehicles and how are you exploring them to ensure more funds are channelled into the development of infrastructure?

    The Pension Reform Act 2004 and the Regulation on Investment of Pension Fund Assets (the Regulation) issued by the Commission clearly stipulate the allowable financial instruments in which pension fund assets can be invested. The list of allowable instruments as stipulated in Section 4 of the Regulation includes Equities (ordinary shares, global depository receipts), Federal Government Securities (FGN Bonds & Treasury Bills), State/Local Government Bonds, Corporate Debt Securities (such as bonds, asset/mortgage backed securities etc), Money Market Instruments, Open/Closed-end Funds, Infrastructure Bonds and Funds, Private Equity Funds. The efforts by the Commission to encourage pension fund investments in infrastructure and the real sector of the economy resulted in the expansion of the allowable asset classes in 2010 to include infrastructure funds, infrastructure bonds and private equity funds, among others. When these instruments are properly structured and available in the capital market, then pension funds can safely invest in Infrastructure. The Commission would continue to work with other stakeholders to realise this objective. Also, in a bid to ensure that pension fund assets contribute to socio-economic development, the Commission is currently working on initiatives that would enhance pension investments in affordable housing. This initiative is already incorporated in the new law which will definitely improve the life of every worker and retirees and the country generally. With the new law, contributors can now utilise part of the balances in their RSA to finance the acquisition of their primary homes. This, to a great extent, would enhance their living standards as well as positively impact on the construction, building materials and mortgage sectors of the economy.

    Give us an insight into PenCom?

    The National Pension Commission (PenCom) is an agency of the Federal Government of Nigeria charged with the supervision and regulation of all pension matters in the country. It was established following the enactment of the Pension Reform Act 2004. Prior to the reform, there were many problems with pension administration in Nigeria, which necessitated the reform and one of such issues was the absence of a regulator to perform oversight functions and ensure that appropriate rules on pension delivery were made and enforced. The PRA 2004 established a mandatory Contributory Pension Scheme (CPS) for the employees of the Federal Government and the private sector organisations with five or more employees. The CPS is contributory, fully funded, managed and kept in custody by licensed private operators, the PFAs and PFCs; and is based on individual portable accounts, the Retirement Savings Accounts (RSAs).

    Why is PenCom important and how safe are pensions?

    Our conservative and modest philosophy may not permit me to say how important PenCom is. However, by the time we look at the numbers in terms of where we were before the reform and our position today, you should arrive at the answer. First of all, the CPS has engendered a regime of a fully funded pension scheme with assets in excess of N4 trillion today. This has been a remarkable growth when compared to estimated pension liabilities of over N2 trillion before the reform. Over 98,000 workers have retired so far and are receiving their retirement benefits as when due without any hassles. In the past, they joined long queues and some even died in the process. In terms of safety, the pension fund assets are ring fenced. That is, there is a separation between management and custody. While the PFA manages the assets, the PFC maintains actual custody of the funds and these functions and the investment of the funds are all guided by the investment regulations issued by PenCom. The pension assets are only invested in safe and secure instruments. The Commission monitors this daily by requiring PFAs to submit daily valuation reports which are reviewed to ensure compliance. These are the things that speak to the importance of PenCom.

    You have been involved with PenCom from the reform stage, passing of the law, being the legal adviser, and now Acting DG, how has the journey been and what lessons have you learnt?

    The journey has been very challenging but rewarding when one looks at the successes recorded. Concerned by the magnitude of issues and lack of transparency in pensions in Nigeria then, President Olusegun Obasanjo constituted a Pension Reform Committee chaired by Mr. Fola Adeola. I served on that committee. It was the committee’s work that culminated into the PRA 2004. At the time, there was a lot of apprehension on the part of stakeholders, labour for example. Their concerns were understandable considering some not so pleasant outcomes of other reforms by government in the past. Ten Years, I am glad that having seen PenCom’s steadfastness in protecting the interest of retirees, Labour is one of our greatest supporters. We have tried to continue sustaining the reform by being proactive. That is why we embarked on a major review of the Pension Reform Act 2004 (PRA 2004) to strengthen the reform by expanding its coverage and enhancing benefits to retirees. We are pleased that both chambers of the National Assembly passed the bill. We now have a new law, PRA 2014 that has repealed PRA 2004. One of our strategic focus areas is to bring on board the informal sector of the economy where most of our active employees earn their living. However, the rules would be tailor made to suit their peculiarities. We have also made considerable progress in defining and implementing reforms, and instituting governance structures based on best global practices.

    What is your vision for PenCom in terms of expanding coverage, infrastructure, and enabling more sustainable and deep investments, among others?

    Our vision is to sustain and improve on the reform by ensuring that retirees are more comfortable at retirement. We also seek to expand coverage by bringing the informal sector to come on board. We seek to get pension funds to play a more active role in the economic development of the nation by, for instance assisting in solving the huge infrastructure gaps in terms of roads, power supply, housing, etc. However, we must emphasise that any investments that pension funds partake in must be through safe investment vehicles.

    The Commission had an inaugural World Pension Summit (WPS) Africa Special last month. What has it achieved with the programme?

    The WPS is the largest annual gathering of pension professionals worldwide where issues on how to advance the provision of pensions are discussed. The WPS Organisation is based in Amsterdam, the Netherlands where its annual summits take place and they have welcomed well over 1000 senior pension professionals from three continents across the globe since their inception. The partnership between WPS and PenCom to bring that wealth of experience to Africa is perhaps an indication of the confidence being reposed in PenCom over the successes of the pension reform in Nigeria. For the Commission, the Summit has provided a platform to find solutions to some of our pressing challenges in moving our industry to the next level. Major issues include discussions around Pension funds’ investments in infrastructure and real estate, enhancing contributor satisfaction through technological innovation, risk management and social security, amongst others. We also shared these learning experiences with other African countries. That’s why invitations were extended to all African countries, with speakers attracted from global thought leaders with diverse expertise.

    What does the future hold for PenCom and the pension industry and what is your message for Nigerians?

    The future appears bright indeed and quiet challenging. PenCom has a social responsibility to discharge. The Nigerian worker must derive the benefits of belonging to the CPS; and the country as a whole must be significantly impacted by the effective deployment of the pension assets. This is the challenge for us at PenCom and we must focus to deliver on it.

    What are your projections for the funds in the next five years?

    The value of total pension fund assets, which was N4.3 trillion as at May 31, 2014, had grown at an annual average rate of 25 per cent over the past eight years. In view of continuing efforts by the Commission to ensure compliance by eligible employers, voluntary introduction of CPS by the states and strategies being developed to bring in the informal sector workers into the CPS, it is projected that the value of pension fund assets may double within the next three to five years.

    What checks are in place at PenCom to ensure workers are not compromised?

    The Commission ensures that it recruits the best talent and calibre of staff with the right skills both soft and hard, and competencies required for delivering its overall objectives in the short and long term through a very rigorous recruitment and selection process. This process also ensures that the staffs possess the core values of the Commission which are transparency, responsiveness, integrity, professionalism and pro-activeness in their duties. All staff of the Commission are also requested to acquaint themselves with the ethical values and code of conduct of the Commission as stipulated in the Commission’s staff condition of service. Periodically, staff are also reminded by way of circulars, drawing their attention to the need to uphold high ethical standards and to abide by the code of conduct of the Commission, which stipulates the minimum conduct expected of staff of the Commission. Furthermore, welfare schemes and conditions of service of the staff of the Commission are continuously improved upon to ensure that staff are well taken care of and are not compromised at any point in time.

  • ‘How identity management will aid foreign investment’

    ‘How identity management will aid foreign investment’

    Successive governments have over the years worked on a dependable database without success. The National Identity Management Commission (NIMC) is charged with creating an identity scheme that will stand the test of time. According to its Director-General/Chief Executive Officer, Mr Chris Onyemenam, a lawyer, in this interview with reporters in Lagos, a dependable identity management scheme will boost foreign direct investment (FDI) and curb fraud in the financial sector. LUCAS AJANAKU was there.

    This project has been on for a while, how feasible is the December dead-line you have set?

    No, I have not set December; what I said is that there is a presidential directive and as you know that is a policy statement and we are all bound by it. The presidential directive is to the effect that all federal agencies that are involved in data capture services and also have identity authentication and registration unit, should, not could, align their activities and infrastructures  with a view to switching over to the National Identity Management Commission (NIMC) infrastructure.

    The objectives of this directive, is in my opinion, of three folds. One is to optimise the use of scarce resources at that level that is dedicated to identity management.

    Another is to ensure that as a result of that, there are no duplications of efforts so that we can quickly establish a national identity data base which is a single version of the truth of personal information of Nigerians.

    Now, the value proposition of this, you can begin to describe this whether it is terms of security, financial services,  access to credits, reducing dependence on cash, which may aid the cashless policy of the Federal Government in terms of providing subsidy to those who actually needs it and making safety and group work proramme work in several respects.

    The single version of truth of every individual in an important tool for ensuring that the programme is better planned and the targeted on the basis of those programmes are reached.That is the only way we can begin to appreciate the impact of this programme and its effects. And Mr. Presidents has given a clear directive that this is what we must seek to achieve by December.

    And I can tell you that right now, the cards have already been carbonised, the connectivity infrastructure is in place, what we are now doing is to connect the device and let it be in sync with the process of data capture so that over a short period, we can have a data base that is properly populated. That is what we are doing.

    What is the relevance of this card to fighting fraud in the financial sector?

    There are, at least, three biometric attributes in the card; one is the Irish, the other is the facial recognition while the third is the finger print. It is very difficult, very difficult for you to beat these three.  When you then combine it with what you know, which is the PIN number, the normal PIN that we all know, and what you have which is a smart card which has public key infrastructure built into it. A set of encryption methodology combination has gone into it in ensuring that you cannot put your data card beside any of this smartphones and your data will be out. I hope you know that can happen. But it cannot happen with this card.

    That card cannot easily be hacked into because we have taken time to build a public key infrastructure around it that meets global best practice/standard. The card is 100 per cent poly carbonate. It has 18 security features, aside from the 19th one which is complex security feature on the chip, that chip is an 80 kilo byte chip. It is different from the normal ATM cards that you have seen. Your ATM card, you lose one today, they ask you: what is the number? They tell you it is no longer possible for you to use it, they give another one. Those are not the kind of cards we are talking about. I am talking about a card that if you want one manufactured, you have to come and take permission from the commission in anywhere in the world. I am talking about a card which features are recognised based on best global practice by the institutions whose job is it to recognise such. The International Telecommunications Union (ITU) for instance knows that we have this kind of card and there is a certain number that once they check the number against the device and it shows that number, they will know that the card is genuine anywhere in the world. That is the level of thoroughness and that is how meticulous we have been in trying to drive this process because we know that there are “Oluwole’s (fake documents makers on Lagos Island) and we know that there are also people outside our own clime that make the Oluwole’s to thrive. Advance fee fraud is not committed by one person. It is committed by two people-the foreigner who is interested to make that happen: and the local that is also interested making it happen too. They build their theory, their proposition around deception for the person in Nigeria and quick business for the person out there who knows that this is too juicy to be true and still goes ahead to take part in it but with this card and with the National Identification Number (NIN) which means you don’t even need the card, it is possible for you to say I am the DG of NIMC, this is how you can find out. And so the foreigner is like caveat emptor (buyers beware). We now have an infrastructure to make the buyer say look,  prove to me that you who you say you are and he/she will rely on that proof because the system complies with the global best practices, and then he can independently check the site.

    Part of the problems we have had about identity management is that foreigners get access to Nigeria’s identity documents, especially in international border communities in the sub-region. What measures are in place to guide against this?

    I am going to answer this question probably so you can appreciate the context in a slightly different manner.  When we were in school we used to read about democracy you remember, but there was a gentleman who said for forms of government let fools contest, whatever is best administered is the best. Why am I saying this? There are views that people have expressed severally that you must not allow non-Nigerians to be enrol; you must not do this; you must not do that.  There are people that also say that our borders are porous. So what is the best approach? What are we interested in because when I am going to commit fraud, I don’t write it on my forehead whether I am a Nigerian or not.

    Our responsibility as a commission is to guarantee the identity of individuals and not to confer citizenships. So what we have done is to ensure that what the law says we should do is what we are doing. We know that  there are some of these gaps that can help non-Nigerians for instance to undermine our system, but as long as the identity is ascertained, because we have a system that will enable us to cross check,  it will be easy to detect anybody who is claiming what he is not.  Now let me go directly to your question because I wanted to make the context obvious. What we have done can be categorise into three.

    Number one we have a set of verifications documents that you can come with- birth certificates,  certificate of indigeneships, international passports, drivers license and the old national ID to evidence that you are a Nigerian. We also know that there are traditional rulers and people who can says yes, I confirm this person. Besides that, the most important thing which is the second category is the institutional support and the cooperation that we have.  The Nigeria Immigration Service has deployed an officer to each of our offices so they help us to screen people that are suspected not to be Nigerians. They also help us screen people who have come forward with the so called legitimate evidence that they are legal residents.

    What are we doing in terms of ensuring that our workers are able to do the right thing? They are exposed to training. There is no worker that has not been exposed to two weeks of training on how to use our equipment.  During the enrolment, there is a little bit of communication /interaction, question and answer that go on between the enrolment officer and the person to be enrolled. The idea is to hear you speak to be sure you are not someone from a different location that is trying to impersonate. Once that happened enrolment officer will immediately ask the person to the enrolment supervisor and the screening is triggered on that basis.

    And to make sure that the enrolment officer they do not compromise this process, they are screened and the screening is an ongoing process. We clear that you have genuine qualification, cleared from all appropriate agencies that you have not been convicted of any crime or accused of any criminal acts, we clear from the security agencies that you are not on the wanted list. We are going through all of that. Each person that is working for us goes through meticulous process and the idea is to ensure that you will do the best that you can. And at the back end there is a process that gradually enables us to ensure that we do what is called “call over” that is cross checking. And there is one more that I will not disclose. That one is IT-base and part of the solutions. There is no need for me to say it but when you experience it, when you go and enrol, you will see the difference between all other enrolments that you have been doing before and this one and you will probably get what I am saying.

    In general, what are the challenges confronting NIMC in implementing the project?

    The major challenge now is how to get Nigerians to enrol. We expected that by now the private sector involvement would have become significant to enable the citizens from all walks of life and location to participate. That disappointment means NIMC would continue to intervene until due process is followed to sort out that issue. So that translates to poor citizens’ turn-out. Though this is improving now but misunderstanding what we are doing and comparing it with what has been done in the past still breeds cynicism. So, this is a big challenge and costs a lot more to manage. The high cost of running the enrolment centre because stable power supply is needed, dearth of requisite human resource, poor salary structure and then ‘expectation gap’ – we are in a hurry to see the card issued because we are used to such things – it doesn’t matter whether the NIN is issued instantly, unlike in the past-based on past experiences and the wrong perception of what identity management means. But the biggest challenge is the failure of the concessionaires to meet their obligations.

    There is the problem of duplication of identities of the citizens. What are the dangers you think this portends for the country?

    Duplication of identities is the bane of Nigeria’s identity management sector. From the ‘photo ID’ that can be obtained from any ‘business centre’ really, to various identification schemes in the Federal Government agencies where demographic and or biometric data for specific statutory reasons are collected, the problem is the same – ability to have more than ‘a single version of truth’ of an individuals’ personal information. This has been extended to include the growing concept of ‘self-identification’ and others.

    Agencies such as the Federal Inland Revenue Service (FIRS), Federal Road Safety Commission (FRSC), National Health Insurance Scheme (NHIS), Nigeria Immigration Service (NIS), National Pension Commission (PENCOM), Nigerian Communications Commission (NCC) and others, have all collected data for different purposes from citizens. There are common aspects of these data feeds. The next step is to adopt the proposed harmonisation process as soon as possible. The common data sets have since been agreed to and what we need now is the best approach to fast track implementation. It’s not a healthy development that citizens end up carrying different identities for these different agencies in the form of identity cards. Even a business centre can produce a photo ID card for you in a couple of minutes.

    As soon as the National Identity Database System we have is populated with data and made available and others key into it, the problem would gradually be eliminated. That includes government agencies in the country that can be linked up for whatever purpose. There is a transition period during which all other government agencies will have to align with the NIMC system. This will now be December 31, 2014.  The lack of an interoperability platform means there could be a high incidence of multiple identities. To curb the duplication of same and or similar activities all over, the President directed NIMC to ensure there is a harmonised environment for all stakeholder agencies and we are working on that. Any new project such as the one by CBN unfortunately will perhaps further deepen the wave of duplication of activities. But we are in talks with them now to ensure we achieve a seamless integration.

    On the dangers such duplication portends, it’s real. First is registration fatigue and second is the security issue. Not only is time and energy expended repeating what one agency has done but also the country’s scarce resource have been and are being spent unnecessarily. It also discourages and or delays the completion time for a seamless interoperability that would best serve the government and citizenry. A close examination will tell you, for example, that once you take part in the Joint Admissions and Matriculation Board (JAMB), your biometrics is already given to an institution. They need it to check examination and other fraudulent practices. It’s not debatable but JAMB does not have the statutory responsibility to keep it. That role is ancillary or incidental to its primary function. It is understandable because we do not as yet have enough data in the National Identity Database, that’s what we are working on and with time this will be in place. With the planned harmonisation, these issues will be sorted out pretty soon. Citizen’s biometrics everywhere is not good at all.

    Is NIMC in partnership with any foreign company or organisation over the identity scheme?

    Yes, we are. They are a group of Technology Service Providers typically referred to as Original Equipment Manufacturers (OEM). They include IBM, Oracle, HP, APS, Emerson, L1 Identity Solutions (now Morpho Trust USA), NetApp, Utimaco, Cisco, NXP, DataCard Group, Crypto Vision, to name just a few. But we are dealing with them along with their local partners. We also have local Technology Service Providers – Galaxy Backbone Plc, Omatek Computers, Digital Jewels, Dataflex,  Interglobal Ltd, the Banks, Unified Payments Ltd, SageMetrics, to mention just a few.

    The commission has also partnered MasterCard and VisaCard as the first payment technology solutions providers for the rollout of the National Identity Smart Card project. The choice of MasterCard as the first to be used is hinged on the company’s show of commitment towards furthering financial inclusion through the reduction of cash in the Nigerian economy.  They have rapidly discussed and met the conditions for making this happen and we have gone ahead to engage their local partners who are also licensed by both the CBN and the MasterCard.

    MasterCard has pioneered large scale card schemes that combine biometric functionality with electronic payments and the NIMC buoyed by its resolve to provide Nigerians with the very best, decided to capitalize on their wealth of experience in this field to make the National Identity Management System (NIMS) project rollout a sustainable success for the country and for the African continent at large. Unless there is any form of sabotage, the revenue streams that this strategy guarantees the NIMS will enable the NIMC become very much less dependent on the public treasury over time, just like NCC, for example.

    Let me hasten to add that contrary to the wrong information peddled by some persons for selfish reasons, the partnership with MasterCard is not an award of contract to them for the production of the National Identity Smart Card. It will not compromise the integrity of the NIMS project because the MasterCard is only a payment platform provider and they have been operating the same solution in Nigeria for years now. Our demographic and biometric data reside with us, and MasterCard can never have access to them. Some of the demographic data on the face of the National Identity Smart Card, used for the activation of the Card resides only with the ‘Issuer Processor, which for now is Unified Payment Systems Limited a Nigerian company owned by all Nigerian banks as I understand it.

    Considering the size of the country, what is your coverage now?

    We have planned to cover all local governments in the course of the year. This will not be an easy task and of course you know we require budgetary provisions and timely releases to be able to do that. But if the concessionaires decide to invest right away this would happen in three months and all that is needed is 13,000 enrolment units (mobile and fixed), we are about 75per cent away from that.

    May be an illustration will help here. Do you know how banks in Nigeria establish branches nationwide? And link them up such that from any branch you can conduct a transaction on your account? Each branch delivering the same services, same way, every day since it was opened to the public for business and the customer friendly banking hall, looking similar if not the same (ambience)? With all branches having constant power supply, internet and dedicated network connectivity that is secure and up all the time? It’s not magic, its careful planning and it happens as planned. We are opening branches (enrolment centres) across the country and deploying, in phases, close to 2,000 enrolment systems. Already we have about 400 enrolment centres, including special centres and centres located in schools and government agencies. It takes meticulous planning and a regime of adherence to technical standards to establish an enrolment centre. We must get it right each time and in each location. One wrong data input and everything goes bad.

    At present, NIMC enrols about 60,000 persons a day and is working towards growing that number to 100,000 daily. Note that this is in a bid to meet the presidential mandate of December 31, 2014.

    So, how many people have you enrolled so far?

    We just started in October, it is about three million.

    When will those who have enrolled get the National Identification Number (NIN)?

    As soon as you present yourself to be enrolled at any of our enrolment centres. That’s it. The problem here is that we have come to see ‘identity management’ as ‘card issuance’. We need a shift in paradigm, away from that mindset of card issuance, to a new mindset – Identity Management, where then NI) is your identity. Please note that card issuance is only an aspect of the NIMS. We are not just doing another card issuance project and that’s why you have not as yet seen the cards. There are other components of the NIMS and this card happens to be different and designed for enhanced use of the national identity database which is the core infrastructure.

    Already the system is such that when you get registered, within seconds, you get your NIN. So when people ask the question:  When am I going to get the card, it is in the mind set of the past when we were focused on card issuance. But the right mindset should ask the question: When am I going to get my NIN?

    Honestly, this wrong perception that the ‘card is your identity’ is one very recurrent fraction accentuated by the cynicism carried over from the limited successes recorded on card issuance projects in the past especially the SAGEM project.  Now, put in a very simple way, we do three things- first we issue NIN because the number is your identity. Secondly, we issue the National Identity Cards (NID), which has multiple purposes and third, we provide verification systems.

    When we conclude the integration exercise for a national resource optimisation, based on a standardised process of data capture and management and sustain it, Nigeria will be a better place for all because it will unlock significant economic and employment potential; it will drive financial inclusion; it will stimulate demand and domestic production in a peculiar way and this will in turn impact on gross domestic product (GDP) growth rate. Most people did not believe the telecom sector will be transformed with the GSM revolution. It happened. Most people do not believe the identity sector will be transformed, by God’s grace, it will happen. Its transformational impact is perhaps also comparable to what GSM has done and what the ongoing deregulation in the power sector will do.

    So, if we are talking of the National Identity (smart) Cards, please give us some time, a few more weeks and we will announce the launch date, the card has been designed, tested and is ready. The card personalisation process has been designed, profiled and tested. We are planning the formal launch of the card, to anchor efforts at ensuring the paradigm shift as best as we can since a couple of awareness campaigns have been planned.

    Maybe we are wrong in opting to launch the components of the NIMS at different times but preliminary survey reports indicate that the perception is gradually changing and the card launch might just help us clinch the shift in paradigm. Given our peculiar circumstances, there seems to be no one best methodology for handling the public cynicism of the past and the imperative of a paradigm shift away from card issuance to identity management.

    What people do not understand is that we are talking of a completely different type of card with multiple functions and we did not pick it up from any shelf anywhere in the world. It was designed, developed, built/produced and tested specifically for Nigeria and is a currency grade card with three levels of security built into the manufacturing and personalisation processes. When we eventually start issuing these Cards there will honestly be a tremendous improvement in the way business is done in Nigeria. It will earn us further respectability globally and that’s the motivation.

    How many agencies of the government are you working with to harmonise the process?

    As far back as 2009, the NIMC set up the Harmonisation and Integration Implementing Committee and several government agencies, through which it has been involved in the NIMS project. Following a Harmonization and Integration Assessment study, the committee has to date, developed a Harmonisation Policy, a uniform Demographic and Biometric Standards and the Business Rules. There are sub-committees working on design issues and we are fast tracking this process now with a few pilot designs testing the data capture. We have sufficient capacity at the backend and have adequate fibre connectivity already in place. And as I mentioned before, the card is a multi-purpose card that will cater for some of the agencies’ integration needs, based on a global standard.

    These agencies include the NCC, the Independent National Electoral Commission (INEC), the Federal Inland Revenue Service (FIRS), the FRSC, the National Health Insurance Service (NHIS), the Nigerian Police Force (NPF), the CBN, the Economic and Financial Crimes Commission (EFCC), the Nigeria Immigration Service (NIS), the (PENCOM), the State Security Service (SSS), the Office of the National Security Adviser (ONSA), the Corporate Affairs Commission (CAC), the Office of the Head of the Civil Service of the Federation (OHCSF), the National Population Commission (NpopC), the Nigerian Prison Service (NPS) and a few others.

    These agencies are involved in one form of identity database management or the other, necessitating a transitional period that has to come to and end by December 31, 2014. Currently most of these agencies, 14 of them, have been connected to our fibre network – CAC, NpopC, NIS, NPS, NPF, CBN, NCC, PenCom, INEC, FIRS, FRSC and others.

     

     

     

     

     

     

     

     

     

     

     

     

    Are Nigerians responding well to the call for enrolment by NIMC?

    Initially, there were very strong reservations. Now the response has improved with the pre-enrolment portal we introduced. The turnout is now impressive and we are gradually getting over stretched because the enrolment centres are few- just so you don’t ask me why, we did not budget for that since it was to be driven by the private sector that incidentally have not delivered to date. We will address the issue shortly and decisively too. We now need to rapidly respond to the increasing turnout to avoid frustration and apathy; we now need to further intervene in the enrolment centre rollout to the local government level and special locations.

    The point must be made that the expected private sector participation under the concession granted two consortia in July 2010 has not worked out well as yet. As we speak they have not been able to achieve Financial Closure and there are many reasons for that and we can’t allow that to hold us back. We have addressed most of the issues that constrained financial closure – proven technical viability and indeed financial viability, whether profitability and sustainability issues have been addressed can only be determined by the lenders. The only sore point or issue was our inability to get the CBN to rescind its decision to withdraw the know your customer (KYC) Policy based on the NIN which was issued in May 2012 and subsequently withdrawn two weeks later. That policy reversal after working with them for over one year to achieve it, in my opinion, was unfortunate. But since the subsequent commencement of the CBN/Bankers Committee project, I can understand why. We now look forward to using their database if it meets with the international standards we have agreed to and it is not made proprietary, as was the case with SAGEM. This point is extremely critical to a seamless integration; otherwise it will be a huge duplication since what we have designed for Nigeria is perhaps what they have adopted for the financial services sector, with one of our concessionaires participating in the scheme.

    We are determined to ensure the President’s directive is achieved and we will focus on that with a deep sense of responsibility. We will not fail to identify and submit a report on any issue or issues that will delay us. The concessionaires are not ready yet; when they are ready to step in we will ensure a comprehensive project audit and hand over to them, but we will not allow any delay or distractive effort to stop us. Of course, the concession agreement has adequate provisions for dealing with all these operational issues including termination. Where it becomes necessary we would follow due process and perhaps opt out of the arrangement where we will still be waiting for the concessionaires to drive the process. We will look for the funds and get this thing going. The good thing is that in the immediate to short term, this project might not be self-sustaining, but in the medium to long term it is extremely capable of sustaining itself.

    Will this NIMS exercise boost Foreign Direct Investment (FDI) into the country?

    A major problem we still face as a nation is a true way to prove identity. The NIMS can boost FDI in several ways. Aside from the traditional ways, there some more uncommon ways also; for example advance fee fraud and different forms of deception still thrive because of the problem of ‘prove of identity. Access to local credits has not improved and so local partners are unable to come up with their equity contributions to joint ventures with foreign partners. The effect of this is multi-dimensional. Credits, not cash based transactions, drive economies. It is so difficult to achieve securitisation in Nigeria; there are so many idle assets that can be used to secure credits, increased trust levels among Nigerians and businesses which if supported by the NIMS infrastructure, will help tilt transactional relationships away from cash, the huge cost of managing the naira – now estimated to be N192billion annually are all issues that do not allow investment inflow into some critical areas of the economy.

    Nigeria must conform to global best practice and the right universal identification tool is a precondition. Prove of identity can unlock the significant economic and employment potential of the economy and help grow local demand and domestic production that will subsequently boost foreign direct investment. The number one country image laundering project therefore is the level of trust and acceptance of the identity management solution of the country. This is so basic that transactional and other forms of relationships are based on trust and you cannot trust someone you do not know or can’t confirm his identity.

    Once we get this going on a large scale, we would restore confidence and respect to the economy in the eyes of the world. Put succinctly, the world of deception where advance fee fraudsters reign would be completely eliminated. Fraudulent and other criminal activities based on successful Identity theft will be significantly reduced and the law enforcement agencies will benefit immensely from the infrastructure.

    Where are the places that a person can go and get registered for the programme?

    NIMC has enrolment offices in the 36 states of the federation as well as in the Federal Capital Territory (FCT), Abuja. We also have enrolment centres in about 400 local government areas. Applicants can visit the NIMC website on www.nimc.gov.ng to see the full list of enrolment centres nationwide.

     Is there an expiry date or deadline for the NIN enrolment exercises?

    When the NIMS enrolment exercise was formally launched by President Goodluck Jonathan on October last year, he gave the commission a mandate to enrol at least a 100 million Nigerians as well as harmonise the collected data into the National Database by December next year. It is now the NIMC’s target to hit 100 million enrolments.

    What are the benefits of the National Identity Management System (NIMS) project for Nigerians and the country as a whole?

    When the NIMS project is fully operational, it will among other things:

    Provide a convenient and simplified process for enrolment into the National Identity Database for the issuance and use of the National Identification Number (NIN) and the National Identity (smart) Card.

    It will help protect you from identity theft and fraud by providing a simple, reliable, sustainable and universally acceptable means of confirming your identity at all times.

    It will make life easier by providing Nigerians with an easy and convenient means of providing their identity anywhere in Nigeria and beyond. It will help reform our political process by facilitating the work of the managers of the electoral process.

    It will make it harder for criminals to use false or multiple, duplicate and ghost identities.

    This will help government, through the enhanced performance of the Law Enforcement Agencies (LEAs), to protect Nigerians from crime, especially Advance Fee Fraud and terrorism.

    It will help reassure Nigerians that civil/public servants are who they say they are: no ghost workers phenomenon again. It will help the nation to better manage our national currency, achieve financial inclusion and deepen the customer credit system, which will help to grow the economy, create employment opportunities and raise the standards of living of Nigerians.

    It will help to harmonize and integrate identity databases in government agencies (and also in the private sector) and optimise the use of government resources so that service delivery is enhanced across the economy. It will promote and help to make tax and other government revenue generation processes easier because identities will be easier to prove. It will also help to launder Nigeria’s image because Nigerians can now prove their identity.

     

     

  • ‘We treat big and small farmers alike’

    ‘We treat big and small farmers alike’

    Twenty-six years ago, the Federal Government established the Nigerian Agricultural Insurance Corporation (NAIC) to provide cover for farmers at a subsidised rate to mitigate their losses. However, many farmers are yet to benefit from it, because of lack of awareness. NAIC’s Managing Director Mr Bode Opadokun, in this interview with OMOBOLA TOLU-KUSIMO, speaks on his plans to achieve the firm’s objectives and address its shortcomings.

    Despite being in existence for long, many farmers are not aware of NAIC. What is responsible for this?

    Insurance is not generally accepted and it is worse with agriculture. But it is a general problem and I would say, in terms of appreciation of the work and value of agric insurance, it is on the increase. Presently, the elite have taken insurance seriously. Gone are the days when insurers used claims and settlements to sell insurance. Today, what people are looking at is how quick and prompt you settle claims.

    For example, in NAIC, what we are trying to do is to, first of all, have internal restructuring and change among our people, because, I believe that it is only a satisfied internal customer that can make the external customers happy. If the staff are not happy, there is no way they can give their best to the external customers. There is a reorientation and change going on among the staff of the corporation. For the first time, in the history of the organisation, we held management retreat for three days. According to the information I gathered, the company had not had it in over 15 years. We need to stop thinking that because we are a public organisation, we can do anything we like. I am coming from the private sector and what I told them is that, yes, we are owned by the government but yet we must be accountable to the customers. It is not the government we are serving. We are set up for a particular purpose. We also discussed prospecting and maintaining new business. What some NAIC staff do is to go after transactions that are bank related which is compelling on the customer. The reorientation we are now giving to the staff by looking at the dynamics and prospects of maintaining business is how to identify customers beyond those that took facility from the bank. What about those that are operating their businesses with their own money; to what extent should we go to educate them to understand the benefits of such patronage.

    We also discussed extensively the opportunity and role of NAIC in the new agricultural transformation agenda. We discovered that before the retreat; some staff did not understand some of the projects and are not aware of investments and other investors that are coming to the country. It is not possible to give what you don’t have. However, the good thing about our own business is that there is insurance opportunity from the reformative stage. From the moment a farmer or an investor agrees to invest in farming and bring equipment to plough the land, there is insurance opportunity. When the equipment arrives in Nigeria and they have to move them to the site, they’ll need guards in transit insurance and lots more. After planting, they will need to arrange cover against risk of flood and peril and even the yield needs cover. Presently there have not been arrangement on insurance based on inputs but we are partnering with Swiss Re which is the second largest reinsurance company in the world. We have an understanding with them to provide us with technical support on human capacity development and we will be signing a Memorandum of Understanding with them soon. Part of the reason why I am partnering with them is to ensure our personnel are trained and retrained. We also want to see how we can improve on our products. Presently, we based insurance on input whereas we should look at it from the point of yield. What I mean about input is the total cost you will incur in the form of planting on a particular seed. Whereas in other deviation what they are looking at is, what is the projection of yield that you want to have which sometimes is being used as the basis of indemnity? But that is based on different factors which we are still trying to work on in conjunction with the Renaissance Partners.

    Weather index has also been in high demand by the customers but the challenge we have is getting the statistics that we need for us to be able to project into the future and base the premium. We want to get some of this information from the Nigerian Meteorological Agency (NIMET) in conjunction with the climate change agency. They are the ones to provide us with this information. But the good thing is that the present ministry of agriculture has been able to work on this project and a climate change committee has been set up where we are able to work on some of these factors. This project is very important. I stated it during my last meeting with the people anchoring the project and we discovered the role NAIC can play on the impact of the project.

    What are you doing to ensure more farmers are aware of the scheme?

    We are trying to sensitise farmers in the urban and rural areas properly through workshops and visits to farmlands to inform them of our services. This way, they will key into insurance voluntarily and not because they are compelled to do so.

    What are your plans to realise the objective of the corporation?

    From the feedback I got, now it is not how far but how well. There are so many things that we are trying to put together in the short time I assumed office. I found that there is not much awareness of NAIC generally. I found that not many people know it and if people don’t know the corporation as they should, how will they know the benefits, assistance or role it can play in the agricultural transformation agenda? We have noted all of these and are working on them, and I believe a positive result will be achieved soon.

    Kindly give a brief insight into NAIC?   

    The primary objective of setting up the NAIC, amongst other things, was to implement, manage and administer agricultural insurance scheme at a subsidised rate as provided by federal and state governments. It is also to carry out insurance on commercial basis and operate other types of insurance business as may be permitted by the National Insurance Commission (NAICOM). As at today, the corporation can be said to have an edge and greater opportunity over other companies that underwrites general business as they do not have access to subsidised premium on crops and livestock policies. Moreover, the Federal Ministry of Agriculture and Rural Development Transformation Agenda focused primarily in making agriculture a business and not a development project through the formation of different schemes and programmes, such as the Nigeria Incentive Based Risk Sharing System (NIRSAL), Growth Enhancement Scheme (GES), Rural Finance Institution Building Program (RUFIN), Staple Crop processing Zones and Agricultural Value Chain. The schemes opened a large vista of opportunities which, we must harness for the betterment of stakeholders.

    In simple context, our objective is not only to mitigate but eliminate financial losses of farmers who have been affected by flood, drought and other natural hazard. If you cannot mitigate, you cannot eliminate the extent of financial losses from crop losses. For instance, in 2012, drought affected over 130,000 farmers. Unfortunately, not many were insured because they were not aware of the existence of such cover. Majority of those insured were the medium and large- scale farmers, who invariably have accessed loans from the banks. These set of farmers insured their farms because the banks require that they have insurance before they can access loan.

    What is the projection of the weather on farmer’s land and their produce?

    We cannot give projections on weather. NIMET is in the position to do so. We do not know it now and that is because we are not doing Weather Index Insurance yet. The only thing we should be guided on is the level of flood we should expect. We are all living witnesses of what happened in 2012. We are told the rain of 2013 will be far more than the flood we are experiencing in 2012. But it was almost a drought that we had last year. The only thing we tried to do as a company is to see how we are going to support our portfolio properly by ensuring we have a good reinsurance in place. There are channels of distribution network that we are working on in conjunction with the Federal Ministry of Agriculture. It is really crop insurance but it is the process of selling the insurance that we are changing. It is going to be different because it will be ICT driven. We will sell it through the e-wallet system. We have advanced on it and we will distribute insurance to farmers through this system. The rainy season has started and the distribution of fertilisers has commenced. Before now government gives farmers two bags of fertilisers free but it was agreed this year, that the farmers will pay certain percentage of money. It will no longer be 100 per cent subsidised. What they will pay is about N2,750 for a bag of fertiliser. From analysis, we discovered that a bag will take care of a farming of one acre of land and they are entitled to two bags so that means they will be able to plough two fertilisers on two acres of land. What we plan to do is to promote insurance cover up to the tune of N20,000 per acre even though this is not the worth of the crop that is on the field. But what we try to do is to base it on a compensation that was paid by the Federal Government to each of the farmers affected in 2012 flood. Each of them was paid N22,000 as a form of compensation. So we are not providing indemnity but compensation for each of the farmers against the listed peril. This means that a farmer buys a bag of fertiliser for just N300 for a sum insured of N20,000. So as the farmer buys two bags and pay N600, he or she would have had insurance cover for N40,000. For instance, the flood that happened the other time or maybe there’s a fire, storm or drought, the farmer can go back to farming almost immediately.

    We discover that it is the small scale farmers, micro farmers that are really affected. These are people whose primary objective is to take care of their family and that is why we have to bring down the premium to as low as N300 for a value of N20,000 sum insured.

    Do you have a reinsurance scheme?

    The only way we can also support and strengthen our own business is to ensure we have a proper reinsurance in place. If the 2012 flood happens again, we will not be able to meet up to our obligation. This is part of what we went to do in Zurich with Swiss re. They have a good brand and they will help us develop our human capacity here in Nigeria and at the end of the day, we will have more knowledge of how to do the business better.

    What is your target in terms of premium income generation?

    For me, it is not the premium income target that matters but the level of coverage and impact we are going to make among the farmers. Our target is how farmers are going to be more aware of the benefits and how to take advantage of it. On the database from the ministry of agriculture, we have 10.9 million registered farmers under the e-wallet fertiliser scheme. Our target is to at least provide cover for 50 per cent of these farmers; it will mean we have reach out to about 5 million farmers in Nigeria. This is our target.

    But in terms of premium income, the year 2013 ended with about N900 million and it is a far cry from what we ought to achieve.

    Another good thing we discover is that NAIC is the only company that underwrite agric in West Africa because of the peculiar nature of the risk attached to the line of business. So we are looking at how to extend our services to some countries. We will not provide reinsurance for them but provide technical and consulting services. We have two companies that approached us from Ghana and Liberia. They had a farmland they wanted to insure. We sent our own personnel to the countries to do the risk survey; agree the pricing and guide them. Then we will encourage the local operators in their country to take a certain percentage of the risk and place the balance with another reinsurance company within their market or place it with Continental Re in Nigeria. We will then charge our own fees. This and many more are what we are doing to improve our income.

    Some farmers are complaining that NAIC is not present in their state. What are you doing to address the problem?

    Part of our programme is how we will sensitise them more and partner with them through their various associations. We partner with cassava, fish farmers, and many others. We are also looking at many other states that we want to partner with and have branches in each of the zones. Presently we have branches in all the zones and if a farmer does not know us, that means the zonal officers have not been doing what they ought to do. The executives cannot be everywhere. But we will ensure they do what is expected of them henceforth.

    Also, some farmers that have insurance complain of not being paid cla ims.

    I will take it from the point of how professional we are. If you follow our story, there is a claim of about N80 million that I paid when I resumed in February this year. That claim has been there and adjusted since December last year. Some of us still have the idea of parastatals kind of thing that is different from the private sector. I am coming from the private sector and for me; any claim that is settled is a form of advertisement. I believe a satisfied customer will always talk about you in a good way to others and even market you. I see no reason why a claim that has been investigated by a loss adjuster and reported back to you as true should not be settled immediately. There is no point delaying such claim because you will not pay it twice. The sum of N50 million valued today cannot be compared to N80 million in three months’ time. So if we keep the money in the bank, we may not get up to N1 million but the publicity we would have gotten if we had paid the claim on time will be more. I will like to say to every farmer that has insured their farms and other stakeholders that this current management will not hesitate to pay claims. Part of the thing we draw up is three strategic business initiative. These are the fundamentals that we are working upon to make us grow and have a good brand.

    In branding ourselves, we discovered that we need to work on our communication channels, not only to the external customer but even within the Corporation. We believe that, the same NAIC that is based in Sokoto is the same one at Bayelsa. Based on this, we are doing so much in our information technology (ICT) so that our business communication will improve. We are also redesigning our website. In the next one month or thereabout you will be able to log on to the new one. The speed of managing your data and communicating with both internal and external customer when you have a good ICT platform to manual is quite different. This affects our ‘Turn Around Time’ for our operation. Before now, it takes a long time to prepare policies. For example, from the understanding of our business central, everything from preparing and approving polices comes to Abuja. We are now going to have three head offices, one in Lagos, Kaduna and Port Harcourt. So some of the key people that are doing the authorisation in Abuja will be deployed to these three regions and will be empowered to underwrite. This I believe will definitely reflect on the ‘Turn Around Time’. Policy preparation that takes two to three weeks to prepare should take at most 48 hours for an ideal company. So by the time we centralise in authorizing this business, it will save the business process up to payment of claims.

    It seems NAIC does not have the capacity to cover all agricultural risks. Recently, some fish farmers complained that the Corporation refused to provide cover for their juvenile and fingerling production. Why?

    The challenge is that we don’t have cover for juvenile presently. The reasons are one, the mortality rate for juvenile and the challenge also has to do with the knowledge gap of some of these farmers. For example, if you want to supply fingerlings, it is not the same morning that you want to go and deliver that you will pack them into a basket, leave them and put them in an open keg and take them out. They cannot survive because the temperature while they were in the pond will be different from when you will put them in the basket and almost immediately put them on transit. They are very fragile at the stage and the mortality will be very high. Ideally, for you to move them tomorrow, it is like a baby that you handle with care. You suppose to take them neatly and preserve them in the new atmosphere for at least 12 hours for them to get used to it.

    So, these are the areas we have serious challenge, where we also feel we need to re-educate some of these farmers. Then we have not been able to get reinsurance cover for fingerlings because of the extreme mortality rate in Nigeria. So what we have to do is partner with Swiss Re and it is part of the listed cover that we need for the farmers.

    The Federal Government has banned fish importation, prompting many to invest in local production. But this is still without insurance which is supposed to cushion their loss. Does this not suggest that the initiative may not be successful?

    Yes, it is going to be a challenge but I strongly believe it is going to get better. From the recent sensitisation programme for fish farmers by an NGO whom we partnered with, we found out that some of them did not even know how insurance can be beneficial to their business. So from time to time, we intend to sensitise them in each states. We are going to Ogun State now. We have gone to Kwara State and the Governor called me that same day that they want to partner with us on Songai farms. They also want us to meet their ministry of agriculture for other programmes. So I believe that if we reach out more, we will see the gain not only to the Corporation but also to the farmers.