E-Financial
Operators Seek Review of Insurance, Pension Investment Legislations
Operators in the real sector as well as the insurance and pension sectors have called for urgent review of legislations guiding investments in various sectors of the economy in order to allow real sector operators have access to long-term funds.
The operators who spoke at the 2020 national conference of the National Association of Insurance and Pension Correspondents (NAIPCO) held in Lagos, noted that currently, some legislations on investment in Nigeria do not favour investments in most sectors of the economy.
Dr. Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry (LCCI), while speaking on the theme: “Promoting Bankable Investments Portfolio for Insurance and Pension Sectors,” said bankable investment portfolio has become a general economic challenge facing Nigerian banking system.
He noted that insurance and pension funds are larger sources of long-term fund but are not available for real sector investment, whereas funds from financial system which is short-term in nature are the only available fund for them.
He, however, noted that the tight regulation in investment of pension fund somehow saved the sector during crash in capital market investment.
He said key issues to put into consideration in investing pension funds in the real sector includes safety of the investment, returns on investment, liquidity of the investment especially for insurance funds because of payment of claims which may arise ant time.
He noted that the N11.35 trillion pension funds as at August this year means a lot in Nigeria investment market if there is right kind of investment environment and regulation.
He said there was need for government to put in place a unified exchange rate to encourage diaspora remittances.
Also speaking, the Chairman, Nigeria Social Insurance Trust Fund, (NSITF), Mr. Austin Enajemo-Isere, said there was urgent need to consider alternative strategies to retool the economy for survival and growth even as he called for the review of the Pension Reform Act (PRA) to enable those in real sector have access to insurance and Pension fund to finance their operations.
Enajemo-Isere, who was the chairman at the conference, identified the effect of the ravaging COVID-19 pandemic and wanton destruction of life and properties across the country in the wake of the #EndSARS protest that was hijacked by hoodlums, among many others on the economy and noted that the impact of these crisis have resulted into the Nation GDP declining from a growth of 2.2 percent in 2019 to about -4 percent by year end.
He said as a result of this, the government, private sector institutions and individuals have continued to search for economic survival strategies to change the narratives and create new normal.
The NSITF boss, advocated for a deliberate policy by the authorities, in addition to what is currently obtainable, directly or through moral suasion to invest Insurance and Pension Fund in sectors such as Manufacturing, Agriculture and Aviation among others with an inbuilt safety net.
“In furtherance to the foregoing, the current restrictive nature of insurance and pension funds investment outlets calls for review of the legislations guiding investment of insurance and pension fund. The yelling and plea from the Organised Private sector of Nigeria (OPSN) to create more access to investible funds deserves attention.
“It is worthy to note and be reminded that insurance and pension funds are subject to regulatory guidelines as provided in section 25 of the Insurance Act 2003 as amended and Sect 86 of the PRA 2014, for the purpose of safety and Returns.
“However, a consideration for review of these legislations to enable some special and real sectors of the economy have access to insurance and pension fund to finance their operations, will be most beneficial to the growth and development of the Nation’s Macroeconomic activities.
A deliberate policy by the authorities, in addition to what is currently obtainable, directly or through moral suasion to invest insurance and pension fund in sectors such as manufacturing, agriculture and aviation, etc with an inbuilt safety net, will be a welcome development,” he suggested.
The NSTIF boss, who stressed the important role of insurance as a catalyst for nation-building and risk transfer mechanism, commended underwriters for rising to their responsibility, noting that, “some operators, in recent times have given assurances to the insuring public that reported claims emanating from the EndSARS protest, among others, will be promptly honored, particularly policies with extension that cover strike, riot and civil commotions (SRCC). This is cheering news for the industry and the nation in general.”
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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