Africa Review

PenCom: Retirement Savings Contributions Hit N290bn – Punch

The total pension contributions into the Retirement Savings Accounts (RSAs) of employees in the private and public sectors amounted to N289.81 billion in 2010, the National Pension Commission (PenCom) has said. PenCom disclosed this in its 2010 annual report and statement of account. The report showed that while the public sector accounted for N162.46billion, which represented 56.06 per cent of total pension contributions in the year, the private sector accounted for N127.35 billion or 43.94 per cent of the contributions. It showed that in cumulative terms, total pension contributions as at December 31, 2010 amounted to N957.97 billion in 2010. This it said was made up of N567.23 billion (59.21 per cent) public sector contributions and N390.74 billion (40.79 per cent) private sector contributions. “The total contribution by the public sector included N33.02 billion from participating state and local governments’ employees and self - funding state and federal government agencies. The average monthly contributions for the public sector successively increased from N8.27 billion in 2008 to N11.43 billion in 2009 and N13.54 billion in 2010, giving an increase of 18.46 per cent over the 2009 figures. “Similarly, the private sector pension contribution witnessed a leap in 2010 as it increased from N91.21 billion in 2009 to N127.35 billion in 2010, representing an increase of 39.62 per cent. Consequently, the average monthly pension contribution by the private sector increased by 39.61 per cent from N7.60 billion in 2009 to N10.61 billion in 2010 in 2010,” the report added.

Dangote floats N2bn housing fund – Businessday

The vision of the minister of housing and environment, Amma Pepple, to use massive construction of housing as a job creation strategy has received some fillip as Aliko Dangote , Chairman Dangote Group, has pledged to make available a N2 billion revolving housing fund to government. BusinessDay learnt that at the recent Presidential Retreat organised by the Economic Management Team, Pepple  canvassed the support of the private sector in reducing the housing deficit, which currently stands at 18 million housing units. The housing ministers’ job creation model is based on the premise that there is a significant shortage of housing in the country , as there is of employment opportunities and that if there is  large scale construction to address the housing shortage, the effort would create massive employment, especially among the unskilled and low skilled Nigerians who feel the brunt of  unemployment and poverty the most. Pepple observes that with a huge home construction programme, various categories of people, including dealers in sand, stone, cement, iron rods, plumbing, electrical, engineering etc, would be gainfully employed. In response, Dangote, according to our source, offered to provide the money to stimulate job creation, through the construction of houses on a build- sell-off and replenish basis. Tony Chiejina, general manager, corporate affairs, Dangote Group, who confirmed the story to BusinessDay, by telephone said ‘the facility is almost interest free’. Chiejina further said that Aliko Dangote was moved by his desire to bring down the cost of housing in Nigeria and reduce the level of unemployment. He also revealed that the details of the loan were being worked out with the Federal Ministry of Environment, Housing and Urban Development.

States return to bond over MPR hike – Businessday

As the cost of funds shoots up, following the recent hike in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria ’ (CBN) state governments may have directed their financial consultants to move away from bank loans already in progress. They are opting for the bond market, where the rates are lower and terms are longer, to enable them carry out their developmental projects. Rivers State is top on the list of  those that have soft-pedaled on bank loans. Governor Chibuike Rotimi Amaechi confirmed to newsmen at an interactive session in Government House, at the weekend, that he had ordered a stop to a N100 billion loan, which the state began drawing two months back. The governor admitted his administration had drawn N40 billion out of the tranche, but said it would go no further, and would rather return to the bond market to raise the rest. The state government began taking bank loans late last year, with an initial N30 billion ‘bridging loan”, which it may have since liquidated. Mid way  this year, the state government got fresh approval from the House of Assembly  to raise a N250 billion bond, but later opted for a N100 billion bank loan, saying the interest was lowered to eight per cent, as against 12 per cent for the bond. The state was to source the remaining N150 billion from the bond market.

Forex reserves drop by $1.58bn – Punch

After moving up from $32.989bn on October 13 to $34.599bn on October 14, the forex reserves commenced a free fall which lasted for nine days. The first decline to $34.532bn as stated by the CBN was recorded on October 17, and thereafter, the losses persisted till October 27, 2011, to close at $33.02bn. Analysts have noted that the CBN, in a bid to strengthen the local currency, often use the country’s reserves to stabilise the naira against the greenback, thus reducing the reserves. Also, to strengthen the naira, the bank said it would intervene in the inter-bank market to either buy or sell, noting that interested dealers in the intervention were to submit their bids and offer rates for specific amounts.

Fitch revises Lagos state outlook to stable – Punch

Fitch Ratings, an international ratings agency, has revised Lagos State’s long-term foreign currency rating outlook to stable from negative. The rating agency, in a report on its website, also affirmed Lagos’s long-term foreign and local currency ratings at ‘BB-’, short-term foreign currency rating at ‘B’, national rating at ‘A’ with stable outlooks, as well as the long-term ratings of ‘BB-’ and ‘AA’ of the N50bn and N57.5bn bonds, maturing in 2014 and 2017 respectively. The outlook revision on the foreign currency rating follows the revision of Nigeria’s outlook to stable from negative last week. According to Fitch’s criteria, the sovereign local and foreign issuer default ratings usually caps sub nationals’ ratings. Based on this criterion, in October 2010, Lagos’ outlook was changed to negative when the sovereign outlook was revised to negative from stable.

NAICOM stops issuance of licence  - Punch

The National Insurance Commssion has placed an embargo on the issuance of licenses to new insurance companies.  The Commissioner for Insurance, Mr. Fola Daniel, who said this, explained that the step became necessary in order to strengthen existing insurance companies to become big entities that would be able to bear bigger risks, instead of breeding new ones. Daniel said, “We are hesitant to give new licences to start new companies because we want to grow bigger insurance companies. Silently, there are some ongoing mergers and takeover decisions within the insurance industry, and we are monitoring them, closely.