The text of the paper presented by Mr. Tope Smart, Group Managing Director/CEO, NEM Insurance Plc at the Business Journal 10^th Anniversary Lecture in Lagos.

The economic growth of a nation depends largely on a number of factors among which is the level of her infrastructural development. Other factors such as macroeconomic environment, technological development, market size are very important, but the importance of infrastructure factor as a tool for economic growth is determined mainly by the quality of roads, railway, air transport and electricity supply to mention but a few.

A research once carried out by Fourie  in 2006, classified infrastructure into two major levels i.e high level and low level. According to him, high level includes roads, highways, railways, airports, electricity, water, sewage and telecommunications, while low level includes schools, hospitals, parks, courts, museums, theatres, libraries, universities, hospitals, etc.

All these are referred to as physical infrastructure or infrastructure capital.

Physical infrastructure can also be referred to as public infrastructure because it creates benefits for a large number of users.

Therefore, infrastructure services such as energy, transport, telecommunications, provision of water, sanitation and safe disposal of waste are fundamental to all kinds of household activities and economic production.  With the analysis above, we can see that infrastructure is a long term, capital intensive asset with a long life cycle.

A research conducted by Aschavier in 1989 revealed that productivity growth fell sharply in response to a reduction in public investment. Therefore, infrastructure is an important component of economic activity.  According to Dixon (1995), efficient infrastructure supports economic growth, improves quality of life and it is important for natural security.

Advantages

1. Investment in infrastructure can stimulate organisational and management changes.
2. Public infrastructure provides the geographic concentration of economic resources and wider and deeper markets for output and employment.
3. Public infrastructure is generally seen as a foundation on which to build the economy, e.g the development of infrastructure is one of the most important aspects for sustainable socio- economic development of a country.

Economic Growth Definition

A research conducted by Aschaer in 1995 confirmed that public infrastructure is the basis of quality of life; for example, good roads reduce the number of accidents and increase public safety;  water supply system  reduces  the  level  of  disease;  waste management improves the health of the environment. Also, social capital infrastructure has a significant positive impact on earnings.

Having looked at infrastructure, we shall now examine economic growth.

Economic growth simply put implies increase in per capital Gross Domestic Product (GDP). It is an increase in the production of goods and services over a specific period.

Economic growth leads to business expansion.  This leads to more jobs being created which consequently leads to higher demand for goods and services.

In Nigeria for instance, the Nigerian Bureau of Statistics reported that the economy recorded a GDP growth of 1.95% for the first quarter of 2018 as against 2.11% recorded during the last quarter of 2017.
The linkage between infrastructure and economic growth derives from the following factors:-

1. Output of infrastructure sectors such as power, water transport

e.t.c are used as inputs for production in the directly productive  sectors e.g agriculture, manufacturing e.t.c. Insufficient  availability of the former results in sub optimal utilization of assets in the latter., and this can affect the economic growth or  otherwise of a nation.

1. Infrastructure development such as transport improves productivity significantly.

   iii. Infrastructure provides the key to modern technology in practically all sectors

   Thus, given the type of linkage, infrastructural development is important not only for economic growth but also for poverty reduction.
   Secondly, the backward linkage between economic growth and infrastructure derives from the following:-

Growth in turn makes more demands on infrastructure.

Studies have indicated that with a 20% increase in public investment in infrastructure, Government can accelerate real growth by 1.8% points in the medium to long term i.e 6-10 years. This is further estimated to accompany a 0.2% decline in inflation rate.

Having looked at the linkage between infrastructure and economic growth, it is now convenient to relate these issues to the concept of insurance.

Concept of Insurance

Insurance hinges on the concept of Risk and risk is present in every activity of human life.

Insurance is the backbone of any economy because of the basic role it plays which is to restore someone, firm, government to the position it was before the occurrence of an insured peril.  For a consideration (premium) insurance ensures the continuity of an enterprise notwithstanding the occurrence of an unforeseen event.

Channels of Promotion of Economic Growth

Generally speaking, Insurance Industry promotes economic growth and structural development through the following channels:

Offer protection to firms and organizations – in this way, their financial stability is enhanced by the insurance company taking over any damage or interruption in the production process occurring as a result of the insured events.

1. Promoting entrepreneurial attitude, encouraging investment innovation and the vitality of the market.
   3. Offer relieve and by so doing reduce pressure on government.
   4.    Increasing financial intermediation through the creation of liquidity and savings through life insurance  products.
2. Promotion of risk prevention, thereby contributing to sustainable and responsible development.
3. Insurance, through life insurance companies provide funds for long-term investment in the real economy.
4. In the absence of a risk transfer mechanism like insurance, economic activities would be much lower and hence will result in economic loss.  This is the view of Golher (1991).

   8.    Insurance also helps to smooth out the volatile economic condition.

5. Also, in the absence of insurance, human behaviour, particularly risk aversion would either lead towards avoiding these activities or excessive precaution and both of these actions would result in an economic loss (Masum Billah, 2014).

   10. Also to be noted is that risk transfer mechanism will reduce fear, anxiety, frustration or demoralization which can reduce productivity in the environment.

   11.  Insurance also encourages creativity, innovation, entrepreneurial activities and trade that  are vital for sustainable growth .
   

Insurance Contribution to World’s GDP

According to Swiss Re, insurance contribution to the world’s GDP was 6.23% in 2016. Insurance contribution to the gross domestic product of developed countries is very significant.

For instance, in Japan, the GDP is 11%, while in areas such as North America, it is about 8%.  In United Kingdom and the Netherlands, the figure is about 12%, while for France, it is about 10%.
However, in Nigeria the penetration rate is still very low.  Insurance contribution to the GDP is still less than 1%.  Efforts are on to increase this figure significantly in the coming years.

Researchers have concluded that based on their findings there is a significant and a positive relationship between insurance and economic growth globally.
A recent study by Din (2017) investigated the relationship between insurance and economic growth for USA, UK, China, Malaysia and Pakistan.  The research concluded that there is a positive and significant relationship between aggregate insurance measured by net premiums and economic growth for all six countries.  While non life insurance is significantly associated with economic growth for all six countries, life is only promoting economic growth for UK, India and Pakistan.

Benefit to Insurance

It is also interesting to look at another perspective of insurance, relative to investment in infrastructure, various forms of benefits can be mentioned.

Research has equally shown that there is a linkage between insurance, infrastructure and economic growth. For example, investment in infrastructure leads to good quality of life.  These automatically lead to improvement in mortality rate and consequently reduce death claims under life insurance.  Also, good roads will reduce the number of accidents thereby leading to reduction in claim on motor insurance, goods in transit Insurance and group personal accident insurance e.t.c.  This will ultimately lead to a better, stronger and a healthier insurance industry.

In addition, availability of data helps in the generation and preparation of good statistics that are useful in preparing rate guide for insurance.  Good infrastructure will ensure this.

Conclusion

Without any doubt, it is very obvious from the above analysis that investment in infrastructure will result in the growth of the economy of any nation.

The attendant insurance needs resulting from such economic growth will be to the benefit of the insurance industry.

The Nigerian Stock Exchange (The NSE) is pleased to announce that it has reviewed its Equities Market Structure, which shall become effective on Monday, July 2, 2018.

The new Market Structure will create a level playing field for all market participants and enable investors deploy broader trading strategies, enjoy best execution and benefit from enhanced market depth.

The changes to the Market Structure include:

• Opening and Closing Auctions to be followed by Imbalance Sessions (where bids exceed offers, and vice versa). These Imbalance Sessions allow market participants enter Imbalance Orders to address imbalances from the auction sessions.
• Expansion of participants in the auction period to enhance fairness and competitiveness of the price setting mechanism.
• Introduction of the size test condition in price determination during the auction period; as it currently applies during the continuous trading session.
• Changes to the market price volatility mechanism such that daily Limit up Limit down (LULD) price band is now based on a single reference price (i.e., the previous day’s close) to allow for a symmetric up and down limit of 10% throughout the trading day.

Commenting on the new equities market structure, the Chief Executive Officer of the NSE, Mr. Oscar N. Onyema, said: “The review of the equities Market Structure was carried out to support our hybrid market model which offers the benefits of best execution and tighter spreads to investors. Moreover, it provides potential for cheaper cost of capital to issuers in our market. This Market Structure is in line with our 2018 to 2021 corporate strategy aimed at boosting retail investor participation.”

Other information relating to the NSE market model can be found in the NSE Equities Trading Manual which will be made available on the NSE website from July 2, 2018.

The NSE remains committed to maintaining a platform that engenders a fair and efficient market in line with global standards.

At the forefront of innovation and technology in energy while collaborating with power producers across the region, GE Power announced today that it has reached its 100^th power plant installation in Sub-Saharan Africa.

This significant milestone was achieved with power plants in Angola powered by trailer-mounted aero gas turbine technology. The company has now installed over 300 turbines in up to 22 countries in Sub-Saharan Africa.
Leslie Nelson, CEO, GE’s Gas Power business, Sub-Saharan Africa said: “This milestone is a testimony of our commitment to providing power solutions to meet the growing energy needs in many countries in the region ahead of other OEMs. Our regional operations are led by an expert African team. Our flexible and modular energy solutions respond to the ever-changing needs of the communities where we work and live. Our ability to partner with independent power producers, EPCs, strategic investors and governments to deliver these power projects strengthens the trust and confidence that our customers place in us.”

Ghana
Over 70% of the thermal power in Ghana runs on GE technology with over 600MW added to the grid in the last 24 months, with an additional 900MW planned over the next 2 years. Leading examples include the 400MW Bridgepower project– in consortium with indigenous partners, Endeavour and Sage Petroleum – which will be the first LPG-fired power plant in Africa and the largest LPG fired power plant in the world.

In partnership with Marinus Energy, the Atuabo Waste Gas to power project will be the first TM2500 plant to use otherwise flared Isopentane gas as a fuel source. The 200MW Amandi power plant which will come online in 2019 will run on GE’s latest 9E technology offering superior fuel flexibility.

Nigeria
In Nigeria today, GE technology provides over 75% of the gas-powered on-grid generation, with more than 3GW of heavy duty and fuel-flexible gas turbines at nine power plants including the Omotosho I & II power plants as well as GE’s innovative trailer-mounted gas turbines currently being installed at the Afam III Fast Power plant.

GE is committed to Nigeria’s Vision 2020; signing a Country to Company agreement with the Nigerian government to support development of up to 10GW of power.

Angola
GE and the Angola Ministry of Energy and Water are set to achieve the country’s additional electric power generation capacity target of 2000MW. Today, about 80% of Angola’s gas-powered generation runs on GE technology providing energy for up to 2 million Angolan households.

With over 20 trailer mounted gas turbines installed at fast power plants and the 750MW Soyo I combined cycle power plant under construction, Angola is well on its way to achieving its energy ambitions.

Ivory Coast
GE is a historical player and a pioneer in the power sector in Ivory Coast. The first-ever gas turbines (Vridi, 1984), the first independent power production project (Ciprel, 1994) and the first combined-cycle power plants in the country (Azito and Ciprel, 2015) all run mainly on GE technology.

In 2015, GE committed to support the country’s infrastructure development goals, which includes adding 1GW of power to the Ivorian national grid. The Azito Power plant produces more than a third of the electricity in the country and marks GE’s Power Services’first GT13E2 MXL2 gas turbine upgrade in SSA. This upgrade will add an additional 30MW to the plant’s 450MW production capacity.

In addition, GE is setting up an M&D (Monitoring and Diagnostic) center in Ivory Coast to provide the digital data and analytics service to improve performance and lower lifecycle costs of all GE equipment in the region.

Kenya
Kenya needs a diverse energy mix to support its growth initiatives. The 1050MW Lamu power project will use GE’s ultra-super critical technology to deliver superior efficiency and lowest emissions. The project will guarantee that up to 30% of electricity produced in Kenya is reliable base-load power.

South Africa
In South Africa, GE is deploying smarter, cleaner, steam technology at the Medupi and Kusile Power plants. Kusile is the first wet flue gas desulphurization plant in the continent and has 93% removal efficiency rate. Upon completion, Kusile and Medupi will provide up to 9600MW – enough power to meet the electricity needs of about 7 million households in South Africa.
“As a company, we believe that one of the key drivers of development in Africa is power. Lowering the tariffs, figuring out how we can make the most of the grid, optimizing the energy value chain – this is what we think about as a business and work towards improving everyday” said Lee Dawes, General Manager, GE Steam Power in Sub-Saharan Africa.
GE’s first turbine installation in Sub-Saharan Africa can be traced as far back as the early 1970s with its Frame 5 gas turbine technology. Since then, GE Power has been at the forefront of innovation in power technology with the most recent fuel-flexible and highly efficient 9EMax gas turbines, superior ultra-super-critical steam technology as well as a broad range of hydro and wind turbines and generators. GE has power plant installations in up to 22 countries in Sub-Saharan Africa and this number is set to grow even further.
GE reinforces its commitment to investment in the region through skills development initiatives to broaden and nurture its talent pool within the countries it operates. In South Africa, $2.4M worth of student bursaries have been awarded in partnership with Eskom.

In Ghana, $3.5M was donated to support the Engineering Program at Ashesi University. Over 120 employees are on GE Leadership development programs today. Corporate Social Responsibility initiatives are also carried out through a wide range of projects in the areas of health, education, environment and community-building to improve lives in the countries where we work and live.
GE Power is attending the 20^th Africa Energy Forum in Mauritius from June 19^th to June 22^nd, 2018.

The Nigerian Stock Exchange (NSE), in partnership with London Stock Exchange Group (LSEG) will host the 5th edition of the NSE-LSE Dual Listing Conference on Friday, June 1, 2018 in Lagos, Nigeria.

This year’s conference themed, “Attracting Global Capital to Drive Nigeria’s Economic Reforms and Sustainable Growth Development,” will bring together companies keen to explore a London/Lagos dual listing, corporate finance experts, lawyers, capital market operators, regulators, government officials, media and thought leaders to discuss investment opportunities in Nigeria.

Speaking about the conference, the Chief Executive Officer, NSE, Mr. Oscar N. Onyema, said that, “this event comes at a time when Nigeria has turned a corner from its worst recession in over two decades to have the best performing stock Exchange in Africa and third best performing globally. I have no doubt that the insightful deliberations at this conference will drive the level of engagement and idea generation that will solidify and strengthen our capital markets partnership and reinforce the drive of Federal, States and Corporates in accessing the deep pool of capital inherent in the Nigerian capital market and on the London Bourse. I encourage us to utilise the opportunities that exist between our exchanges to enhance capacity in our markets and promote diversity of investment products to meet the needs of a wide range of investors and issuers”.

“The recent dual listing of the first-ever FGN Sovereign FX denominated $1 billion Eurobond on The Nigerian Stock Exchange and London Stock Exchange gives credence to the successful partnership between the two exchanges”, he added.

Nikhil Rathi, Chief Executive Officer, London Stock Exchange Plc said: “The fifth NSE-London Stock Exchange Dual Listing Conference is a reflection of the strength of the partnership between our two exchanges and the global investment community’s strong desire to be a part of the Nigeria story. As the world’s most international exchange, London Stock Exchange looks forward to building on the success of existing dual listings in Nigeria and London and partnering with the NSE to showcase the rapid developments in Nigerian capital markets and the Nigerian economy.”

Confirmed speakers for the event include: Abimbola Ogunbanjo, Council President, NSE; Oscar N. Onyema, CEO, NSE; Ms. Mary Uduk, Ag. Director General, Securities and Exchange Commission (SEC); Laure Beaufils, British Deputy High Commissioner; Patience Oniha, Director General, Debt Management Office; Hajia Aisha Dahir-Umar, Acting Director General, National Pension Commission; Eme Essien Lore, Country Manager, International Finance Corporation; Dr. Benedict Oramah, President- The African Export-Import Bank; Dr Doyin Salami, Senior Fellow/Associate Professor, Lagos Business School, Pan Atlantic University; Tinuade Awe, Executive Director Regulations, NSE; Alex Okoh, Director General, Bureau of Public Enterprises; Haruna Jalo-Waziri, CEO, Central Securities Clearing System Plc; Tonye Cole, Co-Founder, Sahara Group Ltd and Yvonne Ike, Head of Sub Saharan Africa- Bank of America Merrill Lynch.

Others include: Ibukun Adebayo, Co-Head Emerging Markets, International Markets Unit, LSEG; Abdulkadir Abbas, Deputy Director, SEC; Tony Edwards, Partner- Stephenson Harwood LLP; Tony Ibeziako, Ag. Divisional Head, Primary Markets, NSE; Funso Akere, CEO, Stanbic IBTC Capital Ltd; Abiodun Sanusi, Director, Coronation Merchant Bank; Brian Egan, Group CFO, Dangote Cement; Omair Mohyal, Fixed Income Product Specialist, LSEG; Chinua Azubike, CEO- Infracredit; Kobby Bentsi-Enchill, Executive Director, Stanbic IBTC Capital Ltd; Vivien Shobo, CEO, Agusto &Co; Dapo Olagunju, Managing Director, West Africa-JP Morgan; Zeal Akaraiwe, CEO, Graeme Blaque and Iyobosa Sorae, Head Trading, FI & Treasury, Coronation Merchant Bank.

Recall The Nigerian Stock Exchange and London Stock Exchange Group signed a capital markets agreement in 2014 and renewed in 2017, to support African companies seeking dual listings in London and Lagos.

The agreement followed the implementation earlier in 2014 of a unique new cross-border settlement process between the UK and Nigeria.