39.5million Nigerians are excluded from financial services – CBN

By BusinessNews Staff on November 24, 2015

The Central Bank of Nigeria (CBN) has restated that about 39.5 million Nigerians were totally excluded from the financial services system. These include insurance services, pension and banking services.

The bank said greater numbers of persons were excluded from insurance and pension services.

A representative of CBN at the micro insurance fair recently held in Lagos, Mr. Olayinka Peters from the Financial Inclusion Secretariat of the apex bank stated this while addressing exhibitors and visitors at the fair.

He attributed Nigerian’s apathy to insurance in particular to lack of trust and financial education, adding that the above two problems must be addressed by the insurers in collaboration with the apex bank.

Peters said to help the apex bank wade into the problem; insurance industry must provide quality data on insurance activities.

According to him, CBN annually publishes data on banking, insurance and pension but that there has not been any quality data raised by insurance industry.

He said data on insurance often provided by the National Insurance Commission (NAICOM), is of poor quality pointing out that it lacked information on number of women, number of men and children that have insurance cover.

Furthermore, he said the available insurance data provided by the commission lacked sector by sector insurance activities such as agric sector insurance.

He called on the commission and umbrella body of insurance underwriters, the Nigeria Insurers Association to avail the apex bank with quality data that will enable it give adequate attention to insurance and come up with strategy on how to improve on the performance of the sector which after its century of operation in Nigeria contributes below one percent to the National GDP.

He promised that the financial inclusion strategy secretariat to which the NIA is a stake holder would publish every quality data released by the insurance industry.

Speaking, the Director General of NIA, Mr. Sunday Thomas said the association considers the fair very important because looking at the structure of Nigerian population, there is need to deepen Insurance penetration further to make Nigeria occupy higher position  in African insurance market .

He said in terms of market volume, Nigeria occupies 4th position, filing behind South Africa, Morocco and Egypt.

Thomas said through the fair, NIA wants to leverage on the population of the country to increase insurance penetration and earn more premium for the industry.
According to him, NIA in hosting the fair, considered the fact that majority of Nigeria’s population falls within the low income group and these have for years been excluded from insurance service delivery.

He said against this backdrop, member companies of NIA have gone into development of products that will serve this developing retail market.

According to Thomas, the fair has successfully brought the insurers and insuring public to  a common platform where they can interact with each other on insurance services available as well as the relevance to them.

Also speaking at the event, Group Managing Director, Mutual Benefit Assurance, Mr. Akin Ogunbiyi said insurance is very relevant to Nigerians especially to grass root dwellers and informal sector operators.

Ogunbiyi who gave the key note address at the fair listed advantages of insurance to this segment of Nigerian population as provision of other benefits that cannot be accessed through other mechanism adding that micro insurance provides value addition advantage such as risk management advice.

He also noted that micro insurance services to the informal sector operators provides them with peace of mind especially in this period of incessant fire out breaks in various markets in the country since the operators who has micro insurance cover knows that there is micro insurance cover in place.

Petroleum contributes N1.94trn to Nigeria’s GDP

By Michael Eboh

The oil and gas sector contributed N1.942 trillion to Nigeria’s Gross Domestic Product, GDP, in the third quarter, Q3 of 2015, according to a data by the National Bureau of Statistics, NBS.

Giving a breakdown, the NBS in its GDP Q3 2015 report, said the Crude Petroleum and Natural Gas sub-sector accounted for N1.845 trillion, rising from N1.614 trillion in Q2 2015, and also an improvement when compared to N1.826 trillion recorded in 2014.

On the other hand, the Oil Refining sub-sector, under the Manufacturing sector, accounted for N81.93 billion, compared to N28.545 billion and N92.55 billion recorded Q2 2015 and Q3 2014 respectively.

The contribution of the Crude Petroleum and Natural Gas sub-sector, according to the NBS, represented 10.27 per cent of the country’s total real GDP, and is an improvement on the N1.614 trillion recorded in Q2 2014.

The NBS attributed the improved contribution of the sector to a significant rise in crude oil production in the period under review, compared to oil output in Q2 2015.

According to the report, in the period under review, preliminary data on oOil production reflects output of 2.17 million barrels per day (mbpd) up from production in Q2 2015 by 0.17 mbpd.

“Oil production was also marginally higher in the corresponding quarter in 2014 by 0.02 mbpd when output was recorded at 2.15 mbpd,” the report said.

The NBS further said that the contribution of the oil and gas sector to Nigeria’s GDP in Q3 2015, reflected an increase by 1.06, year-on-year, higher by 4.65 per cent points from the corresponding quarter of 2014, and higher than the Q2 when growth declined by 6.79 per cent.

The report continued: “Quarter-on-Quarter, growth also increased by 14.35 per cent. As a share of the economy, the oil sector represented 10.27% of total real GDP, down from the shares recorded in the corresponding period of 2014 by 0.18 per cent points and up from the share in the Second Quarter of 2015 by 0.46 per cent points.”

Generally, the NBS said that Nigeria’s GDP in Q3 2015, grew by 2.84 per cent (year-on-year) in real terms, higher by 0.49 per cent points from growth recorded in the preceding quarter, yet lower by 3.38 percentage points from growth recorded in the corresponding quarter of 2014.

It also added that quarter on quarter, Nigeria’s real GDP increased by 9.19 per cent.

NCC says MTN, Globacom, Etisalat violate porting process time as at 22nd Nov, 2015

Lagos – The Nigerian Communications Commission (NCC) on Saturday said that MTN Nigeria, Globacom and Etisalat violated the Mobile Number Portability (MNP) process time obligations in the third quarter of 2015.

The commission made this known in its `2015 3Q Compliance Monitoring and Enforcement Report’, obtained in Lagos.

The regulatory body said to address the increasing cases of port request rejections, it had resolved to monitor operators and take appropriate actions.

“Consequent upon the above, series of compliance checks were carried out regarding timer violations by donor operators with respect to `validation and deactivation responses’, which have timelines of two hours and an hour respectively,’’ the commission said.

It said that during the compliance check in the quarter, it was observed that there was a timer deactivation violation by Etisalat, regarding a Corporate Port request of over 63 lines belonging to Neoconde Energy Limited.

NCC said that the company had initiated a corporate port out request from Etisalat to Airtel on Aug. 7, 2015 at 9.13a.m., but was partially completed as at 1.52p.m. on the same day.

“As a result, these 63 subscribers were unable to receive calls from Etisalat’s network,’’ it noted.

The commission also said that a timer deactivation violation was noticed from MTN, regarding a Corporate Port request of over 109 lines belonging to Nigerian Breweries Plc.

According to NCC, the company initiated a corporate port out request from MTN to Glo via lead MSISDN: 07036735494 on Aug. 11, 2015 at 1.20p.m., but was partially completed as at 11.22a.m. on Aug. 14, 2015.

“As a result, these subscribers were not able to receive calls from MTN subscribers.

“In the same vein, a timer validation violation by MTN regarding four individual Port requests from MSISDNs: 08139382308, 08143810152, 08135485305 and 08162108093.

“MTN breached the timer of two hours for validation of four port requests from the NPC as stated in the MNP Business Rules,’’ it added.

The telecoms umpire said that a timer validation violation was observed from Globacom, regarding 11 individuals and one corporate Port request.

NCC said that Glo had breached the two hours allowable for validation of six port requests from the NPC, as stated in the MNP Business Rules.

It said that Globacom validated one of these port requests over nine hours after receipt from the MNP administrator.

“Glo also breached the one allowable hour for the Donor to deactivate 147 Ported out lines belonging to Reckitt Ltd consistent with provisions of the MNP Business Rules.

“All the above timer violations are currently undergoing enforcement actions,’’ the commission said.

The regulatory body said that its compliance activity was consistent with Section 89 of the Nigerian Communications Act 2003.

It said that the section mandated the commission to monitor all significant matters relating to the performance of all licensed telecoms service providers and publish annual reports at the end of each financial year.

NCC said it had developed `Compliance Monitoring and Enforcement’ strategies to prosecute the above mandate and achieve its objective of fair competition, ethical market conduct and optimal quality of service in the Nigerian telecommunications industry.

Fixed income OTC Market records N11.5trn turnover in one month

The over-the-counter (OTC) market for fixed income and currency recorded N11.48 trillion turnovers in the month of October, according to data released by FMDQ OTC Securities Exchange Plc on Wednesday.

The performance showed a drop of N3.06 trillion month-on-months and an increase of 1.42 per cent year-on-year(y/y). Activities in the Treasury Bills segment dominated the market, accounting for 43 per cent of total turnover, up from a contribution of 37 per cent recorded in the previous month.

Foreign exchange (FX) market contribution to turnover declined two per cent from the previous month to 17 per cent, recording a total of $9.84 billion. Secured market (Repos/Buy-Backs) transactions accounted for 19 per cent of total turnover in October, down 10 per cent from 29 per cent recorded in September while FGN bonds contribution remained relatively flat at 13 per cent.

On the other hand, activities in Unsecured Placements/Takings increased by one per cent, compared to seven per cent recorded in the previous month.

An analysis of the FX market showed that it settled at $7.97 billion, a 25.51 per cent drop in the value recorded in September, with an average daily turnover of $0.26 billion.

“While member-member trades increased $0.54 billion (56 per cent), member-client trades, which accounted for 80 per cent of FX turnover declined by 18 per cent month on month. FX Spot and Swap transactions declined by 24 per cent ($2.14 billion) and 29 per cent ($0.49 billion),” FMDQ OTC explained.

The exchange added that the total value of fixed income consideration traded in the month of October was N6.5trillion, an increase of N1.4 trillion 40 per cent month on month. Treasury bills turnover came to N4.96 trillion, accounting for 76.40 per cent of total fixed Income turnover, down from 83.09 per cent recorded in the previous month. On a YoY basis, turnover on Treasury bills and FGN bonds increased by N2.58 trillion (108 per cent) and N0.73 trillion (92 per cent) respectively.

Meanwhile, bullish sentiments prevailed in the fixed income market within the review period as yields pared downwards on all tenors.  On the average, the yield curve shifted downwards by 250 basis points with the short end of the curve recording the most drop in yields.

Outstanding FGN bonds increased by N477.63 billion or nine per cent to settle at N5.81trillion, up from N5.34 trillion recorded in the previous month.  This increase was due to the conversion of State loans to FGN bonds in the month.

A further analysis of the data indicates that net debt issuance in the month stood at N35.56 billion, compared with N2.40 billion  net issuance in the previous month, while total coupon paid on FGN bonds in the month amounted to N44.44 billion.