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Pension Assets Hit N5.8tn as Pencom Seeks to Invest 40% in Infrastructure

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The Director General of the National Pension Commission (PenCom), Ms

The Director General of the National Pension Commission (PenCom), Ms. Chinelo Anohu-Amazu, on Tuesday hinted that the total pension assets had hit N5.8 trillion, adding that the commission was targeting to invest 40 per cent of the funds in infrastructure and housing by 2019.

She was, however, quick to add that the safety of such investments would not be compromised, as they would require guarantees from government and stakeholders.

She said currently, 15 per cent of the assets are invested in infrastructure bonds, five per cent in infrastructure funds, 35 per cent in corporate bonds, and 20 per cent in mutual funds.

Speaking in Abuja on “Using Pension Funds for Infrastructure Development to Enhance Inclusive Growth” at an interactive forum organised by the Financial Correspondents Association of Nigeria (FICAN), she also disclosed that a multi-funds investment structure was being put in place to allow people some flexibility in investment choice, taking into consideration age, among others.

However, the PenCom boss further revealed that having recovered about N10 billion from employers who had failed to remit pension deductions, the commission had engaged the Economic and Financial Crimes Commission (EFCC) to prosecute employers who criminally deduct pensions without remitting same to Pension Funds Administrators (PFAs).

Represented at the forum by the Head, Investment and Supervision Unit, PenCom, Mr. Ehimeme Ohioma, the director general said the prosecution of such employers should begin soon with a “name and shame” strategy.

Nevertheless, she said the unavailability of investment projects remained a major challenge to the investment of pension assets in the country.

She identified other constraints to include political risk, policy somersaults, and lack of continuity, adding that less than three per cent of assets are currently invested in infrastructure through state government bonds.

She said government and other stakeholders had not really taken advantage of pension assets to develop infrastructure in the country.

Anohu-Amazu said as part of efforts to deepen pensions, a micro-pension scheme was being finalised to provide opportunities and products targeted at over 50 million people in the informal sector of the economy.

She said the proposed infrastructure projects should, however, be commercially viable and self-financing or able to generate cash flows to repay overtime while bid/concession processes must be open and transparent.

She added that political risks must be guaranteed for projects by the federal government or the IFC/World Bank and African Development Bank (AfDB) to effectively tap into pension funds for infrastructure development.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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