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People Need to Insure More During Recession — DG CIIN

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Insurance - Investors King

The Director-General, Chartered Insurance Institute of Nigeria, Mr. Richard Borokini, speaks with NIKE POPOOLA on the need for insurers to invest more in human capital development, among other issues

Why are issuers of fake insurance certificates still thriving in the country despite the efforts of regulators and professional groups?

They are thriving because enforcement is weak. Enforcement of compulsory insurance is weak generally; that is why it is possible for somebody to be walking about with a fake insurance certificate. If you want to import your goods, the law says that you should insure them with a registered insurance company. Instead of going to a registered insurance company to buy a genuine insurance, some people decide to go to buy a fake insurance policy from the port. If Customs officials will ensure that every importer carries a genuine insurance cover, then there won’t be any fake insurance policy. The same is with motor vehicles.  Enforcement is also weak because at the place where these documents are issued, there is usually a racket, and definitely it is at the licensing offices where vehicle particulars are issued that some of the cabal operates, giving face insurance certificates. Rather than pursue genuine insurance, many desperate motorists go for a fake one. Again, the police and other enforcement agencies cannot differentiate between a fake and genuine insurance cover.

Technology would have assisted to check fake insurance and I think the insurance industry is going the way of technology to check that. For example, if you have to purchase your insurance and your certificate is on a portal, if a law enforcement agency is asking somebody on the road for his insurance, he verifies from the Nigerian Insurance Industry Database if it is genuine. If it is not genuine, it will show. The Nigerian Insurers Association is doing a lot of work on this. They are also doing something similar to the marine certificate. That will go a long way to eradicate fake insurance but the enforcement is weak. Until we improve on the enforcement of these laws, we will still have the issue of fake insurance.

Have foreign investors made any significant contribution to the industry?

Every economy wants foreign direct investment but then, the FDI should come to the sectors that are required. The issue is whether we need foreign direct investment in insurance? Some years back, we did a recapitalisation. Although with the current devaluation of the naira, the capital base of many insurance companies has been depleted if you have to convert it to dollar terms. Therefore, there may be a need to actually call for more capital. If that capital is coming from abroad, why not? Probably, they will come in with better corporate governance. In terms of corporate governance, there may be some positive terms to it. Maybe in terms of product innovation, there could be an advantage. But for those ones that have come in, we have not really seen the impact. That is to show you that the Nigerian environment is a peculiar environment, and for you to operate there, you have to be able to understand the peculiarity of the environment. Largely, if you look at it, the first 10 insurance companies are still companies that are locally bred, but that is not to discourage foreign investors from coming in. The insurance penetration in Nigeria is low, and because the penetration is low, there is potential for anyone to come in. So, let them come in if they are able to bring innovation to increase insurance penetration. It will be good. However, in terms of whether those that have come have made any great impact, we are still watching.

What impact is recession having on the insurance industry?

Whatever is happening in the insurance industry is strictly tied to the economy. If there is positive development in the economy, it will affect the growth of insurance. Demand for insurance generally is tied to the purchasing power of the average Nigerian. So, if the purchasing power of the average Nigerian is affected by what is happening, definitely the ability to purchase insurance will also be affected. Therefore, the demand for insurance is tied to the well-being of the average Nigerian. And in this time of recession, people can hardly meet their basic needs. If they cannot meet their basic needs, then of course, it will affect insurance. However, it is the time of recession that people should even insure the more, because you need to protect your assets. As with the value of dollar to naira, it has depreciated drastically and what that means is that if it took you N1m to do a particular project a year ago, with the exchange and inflation rate that has gone up, it will probably take you about N3m to do it now. So, it is now imperative for you to protect that asset. And how do you protect the asset? You have to protect the asset by insuring it against risks that could occur like fire or flood. A time of recession is not a time for people to shy away from insurance; it is the time to insure, in particular, to insure assets that will be costlier to replace if anything happens to them.

What are the recent things the institute has been doing to develop the sector?

One of the first things that we have embarked upon is to engage in corporate visits to insurance institutions. The insurance institutions are our major constituencies and these are the insurance companies, brokers and loss adjusters. We have been meeting with them to solicit their support for the institute’s programmes and to have a feedback on how we can serve them better.

We have also been trying to let them know about what the institute has in store for them as partners in developing the insurance industry. We want to let them know the programmes that the institute has in place to deepen insurance penetration in Nigeria and for the development of our members. We also want to let them know the benefits of being members of the institute.

We have also started some programmes to help in the professional development of our members. One of them is the breakfast seminar that we have instituted.

We also want to let people know about creating awareness for the industry in general and we try to go as much as engaging government services in doing this.

What impact has the annual professional forum by the CIIN had on the sector?

The professional forum is the largest gathering of insurance professionals so far in Nigeria. It started about 25 years ago and has been growing in leaps and bounds. The essence is to bring professionals together to discuss issues that will enable them to perform better as professionals. The main reason for the forum is to discuss issues that will enable them to be better professionals; to equip them with relevant knowledge that will enable them to practise as insurance practitioners, and that usually informs the theme of the forum and the kind of speakers we bring on board.

What are the major contributions of the CIIN to the Insurance Act that is being reviewed?

The insurance decree is being reviewed and we are one of the major stakeholders that made input into the law. It is still a draft so I may not say much on it. Some of the inputs we made are for the betterment of the average professional in the industry and relates to the fact that if you are a professional, you must continue to develop yourself. It is not just being able to acquire the certificate, but you must continue to develop yourself and the new act will address that issue. You have to develop yourself to meet the reality of the present time.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Oando Targets 100,000 Barrels Per Day Production by 2028

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Oando Plc

Nigerian energy company Oando is targeting a production of 100,000 barrels per day by 2028, following its acquisition of Eni’s Nigerian Agip Oil Company (NAOC) earlier this year.

This was disclosed by Oando Executive Director Alex Irune during an exclusive Fireside Chat at the ongoing African Energy Week: Invest in African Energies conference with Bloomberg News Correspondent Jennifer Zabasajja.

He shared the company’s future expansion plans and role in Nigeria’s energy transition and plans by the company to contribute to the 2 million barrels per day.

Mr Irune also highlighted the growing role of indigenous firms in the sector, particularly as international oil companies (IOCs) divest from onshore and shallow water assets.

“In the space of 24 months, you’re going to see about 60 percent-70 percent [of Nigeria’s production] by indigenous players, just based on the transition of IOCs to the deep offshore and the acquisitions we have seen, whether it’s Seplat, our deal or the ongoing Renaissance deal,” he said.

He also revealed that Oando is focused on maximizing the development of assets acquired through its deal, which increased its stake in OMLs 60, 61, 62 and 63 to 40 percent and nearly doubled its reserves to one billion barrels of oil equivalent.

The company’s ownership in NAOC’s joint venture assets will also grow, including 40 oil and gas fields, 12 production stations, and key infrastructure including pipelines, processing plants and the Brass River Oil Terminal.

He also noted that Oando remains open to future mergers and acquisitions across the continent.

“We’re always looking to do a deal. We stay where we have a comparative advantage, but we don’t rule out any markets. Nigeria is the first place we look – we have an immense amount of potential. As a leading energy company, we owe it to the country to reach that potential.”

Mr Irune also discussed the role of Nigeria’s Petroleum Industry Act (PIA) in strengthening the investment case, particularly for gas in Nigeria and fostering industry synergies.

The Oando-NAOC deal was the first M&A transaction following the PIA’s implementation and the company plans to leverage the deal to boost oil and gas production, with a view to supporting Nigeria’s energy transition in the future.

“In the immediate term, our focus is on producing every drop of oil we can to be able to fund that transition journey. We will use gas as a transition fuel – our assets are largely gas assets as a company, and Nigeria is largely a gas province as a country.”

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Alleged Bankruptcy: AMCON Withdrawals Case Against Dapo Abiodun’s Petroleum Company

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Asset Management Corporation of Nigeria (AMCON) has said it has withdrawn the case it instituted against Heyden Petroleum Limited.

The Corporation had approached the Lagos Division of the Federal High Court and prayed for the court’s approval to takeover Heyden Petroleum Limited owned by the Ogun State Governor, Dapo Abiodun.

AMCON had accused the company of bankruptcy, saying it was moving to acquire it in order to save it from further risk.

The presiding judge of the Federal High Court, Justice Ambrose Lewis-Allagoa had, after reviewing AMCON’s motion and supporting documents, agreed with it and ordered an interim takeover of the petroleum company.

Meanwhile, in a swift reversal, AMCON, in a statement issued by its Head of Corporate Communications, Jude Nwauzor, disclosed that the Asset Management Corporation had discontinued the matter, noting that “AMCON is not in dispute with Heyden Petroleum.”

Nwauzor said, “Our attention has been drawn to a publication in the media regarding to the pending litigation between the Asset Management Corporation of Nigeria (AMCON) and Heyden Petroleum Limited

“We hereby notify the general public that AMCON and Heyden Petroleum Limited have settled all issues between them amicably, and Heyden Petroleum Limited has demonstrated commitment to meeting their obligations and has been making payments accordingly.

“Given this latest development, AMCON has formally discontinued its pending litigation against Heyden Petroleum Limited, particularly Suit No. FHC/AMC/67/2024.

“As a responsible debt recovery agency of the Federal Government of Nigeria, it is not the practice of AMCON to engage in a media trial of obligors who are meeting their obligation. Accordingly, the general public is urged to disregard any negative commentaries on the relationship between AMCON and Heyden Petroleum Limited.”

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N1.3bn Fraud Allegation: Court Orders Arrest of Dana Air MD For Not Showing Up For Arraignment

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Mr. Hathiramani Ranesh

A Federal High Court in Abuja has ordered the arrest of the Managing Director of Dana Air, Mr. Hathiramani Ranesh for failing to appear in court for his arraignment in the alleged N1.3 billion fraud preferred against him by the Office of the Attorney-General of Federation (AGF).

The Federal Government had on October 10, 2024, asked the court to issue a bench warrant for the arrest of Dana Air after failing to honour invitation for his arraignment.

The AGF had filed a six-count charge against Ranesh and two others and marked Dana Group PLC and Dana Steel Ltd as the 2nd and 3rd defendants, respectively.

The prosecution argued that Ranesh and the two companies, along with others still at large, committed a felony between September and December 2018 at the DANA Steel Rolling Factory in Katsina.

They were accused of conspiring to remove, convert, and sell four units of industrial generators—three units Ht of 9,000 KVA and one unit of 1,000 KVA—valued at over N450 million. These assets were reportedly part of the Deed of Asset Debenture used as collateral for a bond, which remains valid.

The defendants and others at large were said to have conspired to fraudulently divert N864 million between April 7th and 8th, 2014, at House No. 116, Oshodi-Apapa Expressway, Isolo-Lagos.

This sum, reportedly part of the bond proceeds from Ecobank intended for revitalizing production at Dana Steel Rolling Factory in Katsina, was allegedly diverted for unauthorized purposes.

They were also accused of conspiring to transfer N60,300,000 to an Atlantic Shrimpers account (No: 0001633175) at Access Bank, fraudulently diverting funds earmarked as part of the Ecobank bond proceeds for resuming production at the Katsina factory.

The cumulative amount involved in the charge totals N1,374,300,000. Each offense is said to be contrary to and punishable under Section 516 of the Criminal Code Act, Laws of the Federation of Nigeria, 2004.

After Mojisola-Okeya Esho, counsel to the Federal Government, had requested for bench warrant to be issued against Ranesh, the defence lawyer, B. Ademola-Bello, disagreed with Esho, saying that they had filed a preliminary objection challenging the jurisdiction of the court to hear the matter and that the prosecution had already been served.

Delivering ruling on the application, Justice Obiora Egwuatu, agreed with Esho that Ranesh’s arrest was necessary due to his failure to appear in court despite being served with the charge and several proceedings having taken place.

Justice Egwuatu held that, according to Section 184 of the Administration of Criminal Justice Act (ACJA), 2015, the court has the authority to issue an arrest warrant against any defendant who fails to attend court sessions.

Egwuatu ordered that Ranesh must appear before the court on January 13, 2025, before any objections can be raised.

Consequently, he adjourned the matter till January 13, 2025, for hearing.

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