Experts to Discuss Infrastructure Financing at FICAN Conference

10/09/2017

Andrew Alli MD/CEO Africa Finance Corporation

The President/Chief Executive of the Africa Finance Corporation (AFC), Mr. Andrew Alli and other leading experts in the financial sector are expected to proffer solution to the challenges of infrastructure financing in the country, at the 2017 annual conference of the Finance Correspondents Association of Nigeria (FICAN).

Others expected at the annual event which holds at the Orchid Hotels, Lekki, Lagos, on Saturday, 16th September, include the Managing Directors/Chief Executive Officers of Heritage Bank Plc, Mr. Ifie Sekibo; Rand Merchant Bank, Mr. Micheal Larbie; SunTrust Bank Limited, Mr. Mohammed Jibrin; Viathan Engineering Limited, Mr. Ladi Sanni; as well as the Acting Director General of the Infrastructure Concession Regulatory Commission, Engr. Chidi Kingsley Izuwah.

The theme of the conference is: “Financing Nigeria’s Infrastructure: Issues, Challenges, and Options.”

FICAN in a statement stressed that the place of infrastructure in economic and social development of a country cannot be over emphasised.

Infrastructure financing, according to the Association, plays critical roles in promoting economic growth, standard of living, poverty reduction by enhancing productivity, improving competitiveness and linking people and organisations together through telecommunications.

It also contributes to environmental sustainability.

Nigeria is currently faced with huge infrastructural gap that has hindered its earnest desire to exploit its rich natural and human resources for its development. For instance, in spite of the country’s huge oil and gas, sunlight and hydro resources, Nigeria cannot generate enough electricity to drive its development.

“Indeed, Nigeria’s infrastructure deficit had stymied its economic growth, restricted productivity of its economy and limited its competitiveness. The challenge of the absence of critical infrastructure continues to impact negatively on the cost of doing business, investment, and capital inflow into the country,” the statement added.

It had been projected that the country needs to invest $10 billion annually over the next 10 years for it to significantly reduce its infrastructure deficit. Some of the sectors that require huge investments include power, housing and highways, railways, ports, airports, dams, bridges and tunnels, oil and gas, water and sanitation and telecommunication.

Therefore, presently, the need to evolve creative options to generate long-term finance to tackle Nigeria’s infrastructural challenges is one of the most important questions agitating the minds of policy makers in public and private sectors.

“What are the appropriate financing vehicles to enable the federal, states and local governments in the country achieve the objective of infrastructure development? Are Nigerian banks well positioned to finance such big-ticket deals?” are among the issues the experts are expected to discuss at the conference.

Leadway Partners NBA to Deepen Insurance Coverage for Lawyers

Business Journal

10/09/2017

Leadway Assurance has reiterated its commitment to providing insurance protection to practicing lawyers who are members of the Nigerian Bar Association (NBA). Leadway asserted this in its partnership with the NBA for the week long 2017 Nigerian Bar Association General Conference which held from August 18th to 24th, 2017 at the Landmark Centre, Lagos.

The conference themed, “African Business: Penetrating through Institution Building” drew participants cutting across different sectors and industries around the world.

As part of this partnership, Leadway Assurance deployed its state of the art, first-of-its-kind Insurance Mobile Office to engage the thousands of lawyers who attended the conference on its tailored-for-lawyers insurance plan known as the Leadway Lawyer Affinity Cover.

The plan, which is for all active NBA members, comes at no extra cost to the lawyers as it is covered under the annual bar practice fee paid to the NBA. The Leadway Lawyer Affinity plan provides insurance cover of up to N1,000,000 (One Million Naira only) covers accidental permanent total disability, critical illness, accidental medical and accidental death expenses for the ‘learned’ professionals.

Speaking on the partnership, Executive Director, Leadway Assurance, Ms. Adetola Adegbayi said:

“We believe that by providing insurance to the members of the Nigerian Bar Association, we are intrinsically providing the biggest support to the economy, governance and government of the country. Insurance helps safeguard the profession and the professionals alike.”

It would be recalled that the NBA, the largest body of lawyers in Africa with over 100,000 registered members, entered into a strategic partnership with Leadway Assurance Company Limited in 2014 to provide a feasible group life insurance policy for all lawyers who pay their Annual Bar Practice Fees when due.

The insurance policy is designed to cover all the NBA lawyers in the following areas; Death or Accidental Permanent Total Accidental Disability; Accidental death; Critical illness and Accidental Medical Expenses.

To further deepen discourse at the conference, Leadway Assurance also hosted a Forum Session which held on Wednesday, August 23, 2017.

The high profile panellists at the session include the Executive Governor of Oyo State, Senator Abiola Ajimobi; Ghanaian Minister of Finance, Mr. Ken Ofori-Atta; and Director-General, Debt Management Office (DMO), Mrs. Patience Oniha.

Leadway Assurance is one of Nigeria’s foremost insurance service companies with a reputation for service efficiency and customer reliability. The organisation is committed to bridging the financial protection gap and increasing the rate of insurance penetration in Nigeria.

Allianz Acquires Ensure Insurance, Expands Africa Footprint

Business Journal

30/08/2017

Allianz Group announced yesterday a binding agreement to acquire 98 percent of Nigerian insurer Ensure Insurance Plc from its core shareholder Greenoaks Global Holdings Ltd. (GGH).

Ensure Insurance Plc. offers life and non-life insurance services and generated 11 million euros in gross premiums written in 2016.

Allianz Group views Africa as one of the important future growth markets and is now present in 17 countries across the region. Nigeria, a fast growing country with a population of more than 180 million citizens, is the country with the largest GDP on the continent.

“Nigeria is one of the most dynamic economies in Africa. The acquisition of Ensure Insurance Plc. gives us full access to this key insurance market in Africa and marks a major milestone for Allianz’s long-term growth strategy on the continent. This new step of development will allow us to offer the best products and services to Nigerian customers in both personal and commercial lines. In addition, as we grow our excellent African teams, we are laying particular emphasis on hiring and developing local talent,” said Coenraad Vrolijk, Regional CEO Africa of Allianz SE.

Pending regulatory approvals, the transaction is expected to close end of 2017 when Ensure Insurance Plc. shall become a member of the Allianz Group.

About Allianz Group

The Allianz Group is one of the world’s leading insurers and asset managers with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.4 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than 70 countries achieved total revenues of 122 billion euros and an operating profit of 11 billion euros for the group.

In Africa[1], Allianz is currently present in 17 countries[i] and accompanies clients in 39 countries. Its 1,500 employees achieved regional revenues of 600 million euros in 2016. Allianz also provides micro-insurance for 500,000 low income families and individuals in Africa.

About Ensure Insurance Plc

Ensure Insurance Plc. is one of the most innovative and fastest growing insurance companies in Nigeria. The company has undergone a turnaround and transformation exercise consequent upon its acquisition from Union Bank of Nigeria Plc in 2014 and at which time, it was known as Union Assurance Company Plc.

Ensure provides simple, accessible, relevant and affordable products to the retail segment of the industry and a bedrock of highly secure reinsurance facilities and unmatched technical competence for its corporate business customers. We are focused on delivering excellent products and customer services and we intend to be the dominant insurance services provider in Nigeria. Ensure Insurance Plc. recorded astounding growth of 46 percent and a Profit After Tax of Naira 1.052 billion (3 million euros) in FY 2016.

Allianz in Africa: Benin, Burkina Faso, Cameroon, Central African Republic, Egypt, Ghana, Ivory Coast, Kenya, Madagascar, Mali, Mauritius, Morocco, Nigeria, Republic of the Congo, Senegal, South Africa, Togo.

Big Tech, Not Fintech, Causing Greatest Disruption to Banking, Insurance Markets

Business Journal

30/08/2017

Financial institutions’ drive to become more “experience-driven” is opening the door to potential competition from global technology giants, according to a report published by the World Economic Forum.
According to the report, Beyond Fintech: A Pragmatic Assessment of Disruptive Potential in Financial Services, the challenge to banks and insurers is down to large technology firms hollowing out the value proposition of these institutions by carrying out more core functions, even as banks and insurers lean ever more heavily on them to compete.
Another finding of the report, which aims to examine the impact of innovation on the financial ecosystem, is that fintech start-ups, while achieving success in terms of changing the basis for competition, have had less impact than expected in disrupting the competitive landscape.
“The partnership between banks and large tech companies risks not staying a reciprocal one,” said Jesse McWaters, lead author of the study, and Project Lead, Disruptive Innovation in Financial Services at the World Economic Forum. “Financial institutions increasingly rely on technology firms for their most strategically sensitive capabilities, but can so far only offer their ongoing business in return.”

Examples include:

Amazon Web Services (AWS), which provides services to dozens of finance companies, including Aon, Capital One, Carlyle, Nasdaq, Pacific Life and Stripe

Brazil’s Banco Bradesco Facebook app, which allows customers to conduct day-to-day banking from Facebook, relying on the social network’s customer data analytics to target users

Capital One and Liberty Mutual’s “Alexa” solution (a voice-activated personal assistant), which allows customers to check balances, pay bills and track spending through these devices

While these partnerships can accelerate innovation, the report points out that they also pose a risk should large technology players choose to enter financial services in direct competition with retail banks and insurers.
“Tech giants would be able to pick and choose their points of entry into financial services; maximizing their strengths like rich datasets and strong brands, while taking advantage of incumbent institutions’ dependence on them,” said McWaters. As a result, financial institutions will likely need to walk a challenging line between capitalizing on the services of large technology players and becoming dependent on them.
For customers, the entry of large technology firms into financial services could mean entrusting both their financial and non-financial data to the same company. For policy-makers it would raise serious questions about how best to avoid both anticompetitive behaviour and the inappropriate use of personal data in decision-making.
The findings suggest a move away from a focus on the potential competitive threat of high-tech financial services start-ups, typically called “fintechs”. Much research, including the World Economic Forum’s 2015 report on The Future of Financial Services, suggested that “niche” fintechs could stage a broader disruption of the financial system. But, while they have deeply influenced the direction of innovation in the industry, there are growing doubts about their ability to directly challenge incumbent financial institutions.
“Fintechs have changed the basis of competition in financial services, but not the competitive landscape” said Rob Galaski, Partner, Americas FSI Regional Leader, Deloitte Canada, and co-author of the report. “Fintechs now define the tempo and direction of innovation in financial services, but high customer switching costs and the rapid response of incumbents has challenged their ability to scale”.
“The ability to be a fast follower has proven more important than being first for large financial institutions,” said Galaski. “Agile incumbents have used the fintech ecosystem as a supermarket for capabilities, making the ability to nurture and rapidly form partnerships a critical ingredient to banks’ competitive success.”
“Technology is not driving a global convergence in customer experience, instead divergent customer demand and regulatory priorities are creating distinctly regionalized financial ecosystems” said Bob Contri, Principal, Deloitte Consulting LLP (US); Deloitte Global Financial Services Industry Leader, and an adviser to the report. “This could pose a serious challenge to regulatory coordination, as regulators struggle to understand the disparate impact of global regulations on each region”.

NPA Elevates Managers for Operational Efficiency

Business Journal

30/08/2017

The Management of Nigeria Ports Authority NPA has approved the elevation of some of its managers to the rank of Assistant General Manager (AGM), in line with its commitment towards operational efficiency.

Amongst those affected are Ibrahim Nasiru of the Public Affairs Division which has been rechristened Corporate and Strategic Communications under the new structure of the Authority.

Others are Eze Saint David Chima of the Audit Division and Ibezim Geofery of ICT who moves to Monitoring and Compliance Division.

Also affected are Fawole Adeleke Stephen of Accounts and Jagun Khadijat previously of Medical Services now moved to SERVICOM as Assistant General Manager.

Similarly promoted are Adah Ambrose and Bamgbala Tokunbo, both of ICT and Nwaiwu Bartholomew Chijioke of Procurement Division.

NPA’s Abuja Laison office would have Maltok Josephine Adar as AGM same as Engr. Ashade Olarewaju Kolawole of Dockyards.

Others on the list are Sobande Theresa Nkemdilim previously of Personnel to Administration and Dr. Mrs. Essien Titilola Ayoola of Medical Services.

All the appointments take effect from the 1^st August 2017.

Equities Extend Losses to Third Consecutive Session… NSE ASI down 1.5%

Business Journal

30/08/2017

At the close of trade today, the equities market extended losses to the third consecutive session as the benchmark index fell 1.5% to close at 35,629.13 points while YTD gain retreated to 32.6%. Consequently, investors lost N185.0bn as market capitalisation settled at N12.3tn.

Performance was dragged by losses in large cap stocks such as DANGCEM(-3.8%), GUARANTY (-0.5%), ACCESS (-3.9%) and DANGSUGAR (-4.9%). However, activity level improved as volume and value traded surged 66.1% and 93.8% to 239.9m units and N2.9bn respectively.

All Sector Indices Save For Insurance Close in the Red

Sector performance was largely bearish as all indices closed lower save for the Insurance index which 0.3% due to upticks in CONTINSURE (+4.5%) and NEM (+1.0%). The Industrial Goods index led losers, down 1.8% on account price depreciation in DANGCEM(-3.8%) while the Banking index followed, shedding 0.8% as a result of declines in GUARANTY (-0.5%) and ACCESS (-3.9%).

FIDELITY released its H1:2017 report today which showed Gross Earnings and PAT expanded by 22.1% and 65.6% Y-o-Y to N85.8bn and N9.0bn respectively. Similarly, the Oil & Gas index slid 0.5% owing to negative sentiment towards MOBIL (-5.0%). Losses in GUINNESS (-3.6%) dragged the Consumer Goods index 0.1% lower.

Investor Sentiment Weakens

Investor sentiment remained weak as market breadth (advancers/decliners’ ratio) dropped to 0.2x (from 0.5x recorded yesterday) – 7 stocks advanced against 30 that declined. The best performing stocks today were CUTIX (+10.0%), MAYBAKER (+4.5%) and CONTINSURE (+4.5%) while NAHCO (-5.0%), FIRSTALUM (-5.0%) and MOBIL (-5.0%) were the worst performers.

The continuous decline in market performance as seen in previous sessions presents an opportunity for bargain hunters to take advantage of stocks that had declined. Hence, we anticipate a rebound in the equities market in subsequent trading sessions this week.

Market Statistics: Wednesday, 30th August 2017

Market Cap (N’bn)	12,280.4
Market Cap (US$’bn)	40.2
NSE All-Share Index	35,629.13
Daily Performance %	(1.5)
Week Performance %	(3.9)
YTD Performance %	32.6
Daily Volume (Million)	239.9
Daily Value (N’bn)	2.9
Daily Value (US$’m)	9.6

Law Union & Rock Targets N1bn Profit by End 2017

Business Journal

30/08/2017

Capture — The executive management of Law Union & Rock Insurance Plc at a recent event in Lagos.

Law Union & Rock Insurance Plc says it is projecting profit after tax of N1 billion by the end of 2017 jus as its profit rose by four percent in the second quarter from N307.3 million in 2016 to N318.7 million in the same period of 2017.

Mr. Jide Orimolade, Managing Director/CEO, Law Union & Rock Insurance Plc, said the company achieved gross premium income of N2.7 billion in the first half of the year as against N2.3 billion in 2016. The underwriter also paid claims of N622.5 million in the half year ended June 30, 2017 to underline its commitment to prompt settlement of claims to its policyholders.

Orimolade said:

“Law Union is a well-known underwriting firm with a stable outlook and result-oriented management. We have numerous strategic initiatives which have contributed immensely to the growth of our financials. The company is not only determined to meet all her obligations to policyholders, it is also committed in adding value to customers through disruptive innovation that delivers seamless, convenient and stress-free business ecosystem.”

The executive management of Law Union & Rock Insurance Plc at a recent event in Lagos.

The company listed its 2017 corporate goals as:

Grow gross premium income by 50 percent
Retain 90 percent of existing customers
Grow direct & retail businesses
Improve relationship with brokers and other channels
Achieve improved credit rating from A- to A+ by GCR
Become the preferred first choice underwriter amongst general insurance business providers in Nigeria

NPA Approves New Structure to Drive Efficiency

Business Journal

30/08/2017

Hadiza Usman MD, NPA — Hadiza Usman - MD, NPA

The Board of the Nigerian Ports Authority (NPA) has approved a new organisational structure and the commencement of a Business Process Re-engineering initiative that will create synergies to improve efficiency. It has also approved the redistribution of all General Managers in its employ.

The far reaching initiatives which are aimed at making the NPA a truly professional and performance driven organisation, were approved at a board meeting which on July 27, 2017 in Lagos.

The management notes that this review has become important because NPA’s structure has remained the same in spite of the 2006 concession which changed the Authority status from owner/operator to landlord.

This change in status brought about the concession of cargo handling operations to the private sector; outsourcing of dredging, towage services and vessel maintenance, use of contractors to build infrastructure.

Changes approved by the Board include:

the reduction in the number of General Managers from 25 to 22; the upgrade of the Hydrography and Dredging Department into a Division status to be headed by a General Manager in recognition of its strategic importance to the Authority; the upgrade of the Information and Communications Technology Department into a Division to take more responsibilities from Departments like Utilities; the creation of a new Monitoring and Regulations Division; the merger of the Capital Projects and Maintenance Divisions into a single Engineering Division to eliminate redundancies; the scrapping of the Special Duties Division; scrapping of the zonal office structure such that departments in the ports will now report directly to the head office.

Other decisions taken include: a change in the nomenclature of nine departments and divisions including Public Affairs, which will now be known as Corporate Communications; Overseas Office (London Office) into International Liaison Office; Capital Projects and Maintenance Divisions now to be known as Engineering Division; Hydrography& Dredging Department now Hydrography Services Division; Monitoring and Compliance Division now Monitoring and Regulation Division; Commercial and Port Promotion Services Department now Tariff& Billing Department; Secretary/Legal Services now Legal Services; Insurance & Risk Management Department now Enterprise Risk Management Department andthe Business Development and Joint Venture Department into Public Private Partnership Division.

The Authority is convinced that this new structure will enhance its capacity to:

To meet its new mandate and strategic direction,
Improve allocation and optimisation of resources;
Eliminate the duplication of resource and work duplication and
Reduce cost to income ratio to the advantage of all stakeholders and Nigerians as a whole.

In addition to the above, the initiative will specifically forestall:

The duplication of responsibilities across divisions
The unnecessary bottleneck currently created by the zonal office structure
Redundancies created by the transfer for certain core function of the Authority to third party contractors and
The multiple reporting relationships and attendant red tape.

The business process re-engineering process is the next phase of the re-organisation and it will detail work procedures that will enable the Authority take full advantage of the technology that has already been deployed and terminate the low capacity utilisation engendered by manual processes.

The Authority assures that the ultimate goal of this initiative is to institute a transparent and efficient system which will deliver the best dividend to Nigeria and its citizens. We solicit the support of all Nigerians to the achievement of these goals.

Insurance Customers Meet at Insurance September

Business Journal

30/08/2017

“The transformational changes we expect in the insurance industry in Nigeria will occur when policyholders (insurance customers) understand the value of insurance and positively engage insurance operators to deliver on their promises and commitments.”

This was the assertion of Ekerete Ola Gam-Ikon while speaking on the upcoming policyholders’ event, ‘Insurance September’ put together by select professionals.

Ekerete, a respected Consultant on Insurance, Management and Strategy, stated that the time has come to discuss the insurance industry in Nigeria from the point of the positive experiences of policyholders and, to some extent, investors.

According to him, Insurance September is a developing idea that evolved from several interactions with other professionals, business owners, policymakers, entrepreneurs and consultants concerned about the challenges the insurance industry faces in trying to respond to the increasing expectations of customers in our clime.

He said Insurance September was therefore the opportunity for policyholders to share practical ideas that will improve their experiences with the insurance operators.

“Policyholders are no longer impressed with being told that insurance is highly technical and left confused when they have claims” he said.

Themed “Breaking the Code”, the event scheduled to hold on September 29, 2017 is expected to feature well respected speakers including Mr. Olufemi Awoyemi of Proshare, Mrs. Ini Abimbola of ThistlePraxis, Mr. Dienye Peterside of Pilot Finance, Mr. Charles O’Tudor of Adstrat, Mrs. Edobong Akpabio of Organic Green Animal Farms, Mr. Abiodun Atobatele of ATB Techsoft, Mr. Emmanuel Essien of Alpha Mead Capital, Mr. Olugbolahan Mark George of Mark George Consultants and Mr. Emmanuel Udowoima of BrandHealth. They will share insurance experiences from their professional perspectives.

According to Ekerete Ola Gam-Ikon, who had also worked with leading insurance brands in Nigeria, the event is holding in Lagos, the commercial capital of Nigeria and home of insurance business; to ensure quality participation from all stakeholders.

Guests, largely insurance customers, are sure to enjoy a day of innovative insurance discourse that will ultimately deepen insurance penetration in Nigeria.

Rivers State to Host 2017 Editors’ Conference

Business Journal

21/08/2017

Chief Nyesom Wike Executive Governor Rivers State

Rivers State will host this year’s edition of the All Nigeria Editors’ Conference (ANEC 2017) which holds in Port Harcourt from Wednesday, September 20 to Sunday, September 24.

ANEC is the annual flagship conference of the Nigerian Guild of Editors (NGE). This year’s event themed: Nigerian Media – Balancing Professionalism, Advocacy and Business will also have an extraordinary convention to adopt the reviewed NGE constitution.

The Nigeria Guild of Editors has in recent years dedicated its annual conference to fostering and deepening discourses on national issues. This year, the Conference is focusing on the media as a major stakeholder in the nation’s democratic project.

Now in its 13th year, this is the second time that ANEC will focus solely on the media after its first edition held in 2004 in Ada, Osun State, with the support of the government of the then Governor Olagunsoye Oyinlola. The theme of the 2004 conference was: Ethics, Professionalism and the Nigerian Editor.

According to Egbemode, the choice of this year’s theme was a response to popular demand by members of the Guild on the need for the Guild to discuss the myriad challenges confronting the journalism profession and proffer lasting solution to them.

The prevailing economic downturn has had a negative impact on the media leading to low revenue receipts, job losses with several media houses either extinct or on the brink of collapse. There is also the issue of safety of journalists.

In recent time, there have been cases of impunity against journalists who were either harassed or killed in the course of discharging their constitutional duty which is to uphold the responsibility and accountability of the government to the people.

All of this has necessitated the theme of this year’s ANEC which will be attended by no fewer than 300 Nigerian editors from the print, electronic and online platforms, media entrepreneurs, sundry public officers and administrators.

Governor Wike said that the conference would afford the state the opportunity to showcase its investment potential as well as consolidate its partnership with the media for sustainable development of the state.

Wike noted that the state is hosting several national and international events as a demonstration of the fact that Rivers State is an investors’ destination, stressing that the state is peaceful and the people hospitable.

“Hosting this year’s conference will also make the editors witness first-hand the development projects and programmes of my administration which has improved the living standard of the people”, the Governor said.

ANEC is the largest gathering of Nigerian editors. It is a watering hole of ideas that has shaped government policies and programmes over the years. The conference also attracts both local and foreign speakers as well as editors from organizations such as the West African Editors Forum (WAEF), the African Editors Forum (TAEF), the World Editors Forum (WEF), the World Association of Newspapers (WAN) and the Global Editors Network (GEN).

New Bills Threaten N6.5trn Pension Assets

Business Journal

16/08/2017

The Pension Fund Operators Association of Nigeria (PenOp) has warned that pension assets in the country currently valued at N6.5 trillion could be at risk if multiple bills on the pension system at the National Assembly become law.

PenOP President, Eguarekhide Longe said prominent among the Bills, include one sponsored by Hon. Oluwole Oke on May 16, 2017 seeking to amend the Pension Reform Act 2014 to exclude members of the Nigeria Police, the Nigerian Security and Civil Defence Corps, Nigeria Customs Service, Nigeria Prison Service, Nigeria immigration Service and the Economic and Financial Crimes Commission from the application of the Contributory Pension Scheme (CPS) and other related matters.

He said the Bill passed its second reading and has been referred to the relevant Committee of the House of Representatives for further action.

He stated that an additional cause for concern regarding the legislature arose on May 10, 2017, when yet other private member’s Bill sponsored by Senator Aliyu Wamako (Constituency – Sokoto North) sought to pass a Law for “An Act to Further Amend the PRA 2004 to Provide for Definite Percentage a Retiree Can Withdraw from his RSA and for Other Matters Related Thereto.”

He noted that this permits retirees to withdraw a definite rate of 75 per cent of the value of their RSA upon retirement, leaving only 25 per cent to be spread over their expected years of retirement as periodic pension payments.

He explained that the proposal is based on a misunderstanding of the concept of pension payment under the CPS.

Longe stressed that it is pedestrian to assume that lump sum should be fixed, rather, what should be implemented is a minimum replacement ratio as monthly pensions.

“Accordingly, the retiree should keep an amount that can procure an amount of monthly pensions as replacement of salary over an expected life span. Whatever remains over that amount may be taken as lump sum. The current replacement ratio under the CPS is 50 per cent of last pay by virtue of the PRA 2014 and regulations issued by the Commission. One of the objectives of the CPS is to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

“The proposed amendment would mean leaving only 25 per cent to be spread over the lifespan of the retiree, which may be longer than 20 years, thus giving meagre monthly pensions below the current replacement ratio of a minimum of 50 per cent of last pay. It is doubtful if the 25 per cent balance in a retiree’s RSA, after deduction of 75 per cent lump sum, would, if spread through the retiree’s expected life span, be adequate to reasonably cater for his livelihood during old age. Accordingly, the proposed amendment would only result in the depletion of the RSA without regard for the retiree’s continued subsistence, thereby impoverishing retirees.”

Equities Market Extend Losses To Third Consecutive Session… NSE ASI Down 2.7%

Business Journal

16/08/2017

The negative trend in the equities market was extended into the third consecutive trading day as the All Share Index (ASI) fell 2.7% to close at 36,102.38 points whilst YTD gain further moderated to 34.3%. Accordingly, market capitalisation declined by N346.1bn to settle at N12.4tn.

The poor performance was majorly attributable to negative sentiment towards DANGCEM (-4.9%) and GUARANTY (-4.7%) in addition to profit taking in NIGERIAN BREWERIES (-2.6%) and ZENITH (-3.3%). However, activity level on the exchange waned as volume and value traded dipped 42.6% and 6.4% to 224.8m units and N5.1bn respectively.

Industrial Goods Index Tops Sector Losers
Performance across sectors was bearish as all indices trended southwards. The Industrial Goods index led losers, down 3.1% on account of sustained losses in DANGCEM (-4.9%) and WAPCO (-1.7%).

The Banking index followed suit, down 2.8% due to declines recorded in GUARANTY (-4.7%), ZENITH (-3.3%) and ACCESS (-5.0%). GUARANTY released its H1:2017 earnings result today, growing Gross Earnings and PAT by 2.0% and 16.6% to N214.1bn and N83.7bn respectively.

In the same vein, the Consumer Goods and Oil & Gas indices fell 1.0% apiece on account of price depreciation in NIGERIAN BREWERIES(-2.6%), GUINNESS (-2.2%), TOTAL (-4.0%) and FORTE (-2.9%) respectively. Similarly, the Insurance index marginally declined 0.1% owing to a drop in price of LINKASSURE (-1.3%).

Investor Sentiment Remains Weak
In line with benchmark performance, market breadth remained weak, as the ratio of advancers to decliners settled at 0.3x (same as yesterday’s close of 0.3x) after 10 stocks gained against 30 losers.

CILEASING (+5.2%), VITAFOAM (+4.4%) and UPL (+3.7%) led the gainers’ chart while ACCESS (-5.0%), FCMB (-5.0%) and STANBIC (-4.9%) were the worst performers.

As we noted yesterday, market performance remains driven by profit taking after the sustained rally in prior weeks.

Nonetheless, we believe this negative trend will be reversed on account of bargain hunting. Hence we anticipate a rebound in the equities market in subsequent sessions this week.

Market Statistics: Wednesday, 16th August 2017

Market Cap (N’bn)	12,443.5
Market Cap (US$’bn)	40.7
NSE All-Share Index	36,102.38
Daily Performance %	(2.7)
Week Performance %	(5.4)
YTD Performance %	34.3
Daily Volume (Million)	224.8
Daily Value (N’bn)	5.1
Daily Value (US$’m)	16.7

Global Airlines Financial Monitor: July 2017

Business Journal

16/08/2017

Initial airline financial results from Q2 2017 have been more robust than earlier in the year, and suggest that the squeeze on profit margins from higher costs and weak yields peaked in Q1.
Meanwhile, having trended downwards since 2013, the latest monthly data suggest that passenger yields have now started to trend upwards. Exchange rate-adjusted yields were broadly unchanged from their year-ago level in May.
Global airline share prices fell in July, driven by a decline in the North America index. Having seen airline shares outperform global equities over the past year, July’s decline appears, in part, to reflect profit taking by investors.
Brent crude oil prices rose back above US$50/bbl in July, and ended the month nearly 10% higher than they started it. Nonetheless, the futures market remains consistent with just a modest increase in prices over the medium term.
Passenger and freight demand growth posted their strongest first half of the year since 2005 and 2010 respectively. The seasonally-adjusted passenger load factor remained broadly stable close to an all-time high over the same period, while the freight load factor recovered to its highest level in more than two and a half years.
The pick-up in global trade is helping to support premium passenger demand, particularly to, from and within Asia Pacific. Premium revenues have risen in year-on-year terms on key routes to and from the region so far in 2017.

PenCom, Operators Oppose 75% Lump Sum Bill

Business Journal

13/08/2017

The National Pension Commission (PenCom) and Pension Funds Operators Association of Nigeria (PenOp) have jointly opposed a bill at the National Assembly seeking payment of 75 percent lump sum to a retiree upon retirement as against the current 50 percent enshrined in the Pension Reform Act 2014 and regulations by PenCom.

The bill was sponsored by Senator Aliyu Wamako, former executive governor of Sokoto State.

In a position paper, Mrs. Aisha Dahir-Umar, Acting Director-General of PenCom faulted the bill on the ground that it is based on a misunderstanding of the concept of pension payment under the Contributory Pension Scheme(CPS).

“It is trite that lump sum should not be fixed. Rather, what should be implemented is a minimum replacement ratio as monthly pensions. Accordingly, the retiree should keep an amount that can procure an amount of monthly pensions as replacement of salary over an expected life span.”

She also countered that the proposed amendment would mean leaving only 25 percent to be spread over the life span of a retiree, which may be longer than 20 years whereas one of the objectives of the CPS is for people to save to cater for their livelihood during old age.

L:R- Company Secretary, NPF Pensions Limited Ikechukwu Utazi; Managing Director, FUG Pensions, Usman Sulaiman; Head, Research and Corporate Strategy Department, National Pension Commission (PenCom), Dr. Farouk Aminu; President, Pension Funds Operators Association of Nigeria (PenOp), Longe Eguarekhide; Executive Secretary, PenOP, Susan Oranye; Executive Director, Investment, NPF Pensions Limited, Nicholas Nnaji and Managing Director, AXAMansard Pension, Dapo Akinsanya at the 2017 pension retreat in Abeokuta, Ogun State.

“Retirees will spend the money quickly and return to dependency and insecurity” if the 75percent lump sum bill succeeds while “retirees will return to active life rather than retirement, thereby reducing their life expectancy.”

PenCom also argued that the amendment will impact the national economy negatively by drawing large amounts out of the pool of pension assets.

In the same vein, the Pension Funds Operators Association of Nigeria (PenOp) warned that allowing retirees to draw 75 percent lump sum will leave such retirees with meagre monthly pensions below the current replacement ratio of a minimum of 50 percent of last pay.

“It is doubtful if the 25 percent balance in a retiree’s Retirement Savings Account (RSA) after deduction of 75 percent lump sum, would, if spread through the retiree’s expected life span, be adequate to reasonably cater for his livelihood during old age.”

PenOp, which is the umbrella body of pension fund operators in the country, also warned that with 75 percent lump sum in their kitty, retirees will become targets for unscrupulous business opportunities due to their lack of experience in handling or investing such bulk sums, and will spend the money quickly and return to square one.

“A 75 percent lump sum payment upon retirement is never the case in all jurisdictions operating the Contributory Pension Scheme the world over.”

According to PenOp “it is important that members of the legislature and indeed all arms of government are held accountable for the ill-informed decisions they take that have indelible effects on the lives of the people they govern. Also, urgent attention of the public and government needs to be drawn to convey the positive message of pension reform to all the publics and stakeholders of the pension system in Nigeria.”

NCC Summons GLO, Suspends Promotion

Business Journal

13/08/2017

The Nigerian Communications Commission (NCC) has summoned he management of Globacom Limited to appear before the Commission in Abuja on Thursday, August 17, 2017 for allegedly violating the terms of its GLO Overload Promotion. The Commission also ordered Globacom to suspend the promo immediately pending the outcome of the summons.

In a letter (NCC/Glo/F76/vol/13/2017) dated August 10, 2017 and signed by Sunday Dare, Executive Commissioner, Stakeholders Management and Abdullahi Maikano, Director Consumer Affairs of NCC, the Commission stated as follows:

“It has however come to our notice that Globacom Nigeria Limited has been implementing the above regulatory approval in breach, especially given your recent media campaign on the “Glo Free Data Offer, a clear departure from the terms and condition of the approval given for the Glo Overload Promotion.

Consequent upon the above, you are hereby directed to suspend implementation of the Glo Overload Promotion from your network with immediate effect.”

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