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PFAs Invest N11.36bn in Infrastructure, Eye Airport Projects

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  • PFAs Invest N11.36bn in Infrastructure, Eye Airport Projects

The Pension Funds Administrators have continued to raise their investments in infrastructure even as they move to extend their investment tentacles to the nation’s airports as assets under their management increase, NIKE POPOOLA reports.

The Pension Funds Administrators have raised their investments in infrastructure to N11.36bn from the pension money in their custody, according to the latest report on the issue from the National Bureau of Statistics.

It said the figure was for the end of the second quarter of the 2018 financial period.

The NBS stated in its ‘Pension Asset and Membership Data’ that the total funds under the Contributory Pension Scheme stood at N8.23tn as of the end of June.

The Federal Government, which is the biggest borrower of the funds, has 70.75 per cent or N5.8tn of the total assets in its custody.

The NBS’ report showed that the Federal Government had invested N4.04tn, N1.7tn, N8.35bn, N58.36bn and N7.7bn in the Federal Government of Nigeria bonds, treasury bills, agency bonds, Sukuk bonds and Green bonds.

It added that a total of N151.95bn of the funds was invested in state government securities.

According to the NBS, the pension asset and Retirement Savings Account membership data for Q2 2018 showed that 8,136,202 workers were registered under the pension scheme, compared to 7,975,976 registered workers in Q1 2018; while the pension fund asset under management as of Q2 2018 stood at N8.232tn as against N7.943tn in Q1 2018.

FGN bonds had the highest weight percentage of 49.08 per cent of the total pension fund assets and closely followed by treasury bills with 20.76 per cent; and domestic ordinary shares with 8.62 per cent, while green bonds had the least with 0.09 per cent weight.

The data revealed that participants within the age distribution of 30-39 years had the highest percentage composition, closely followed by participants within the age bracket of 40-49 years and 50-59 years, while participants above 65 years had the least percentage composition.

Other figures obtained from the National Pension Commission on investment in infrastructure revealed that in May 2015, the operators invested N568m in infrastructure and increased it to N1.35bn in December 2015.

The PFAs invested N2.06bn in infrastructure bond in December 2016, and had gradually increased the pension funds invested in the portfolio.

For instance, PenCom’s data showed that the PFAs invested N6.86bn in the nation’s infrastructure as of December 2017.

Operators of the CPS are looking at how to extend the investment of the increasing pension funds to airport projects in the country and other large investment areas.

According to the Managing Director, Sigma Pension, Mr Dave Uduanu, the operators are working with development finance institutions on how to create support for investible projects.

“The pension operators are looking at forming a consortium in such areas for investment because those are large-scale investments, which are beyond the capacity of any one pension fund,” he said.

Uduanu, who noted that more of the funds should be invested in the real sector of the economy, stated that there should be supply of instruments of listed companies and quality infrastructural instruments.

The Director-General, PenCom, Aisha Dahir-Umar, said the CPS had facilitated a pool of pension funds which had consistently accumulated since its inception.

She said there was enormous potential for the growth of Nigerian pension funds to account for a significant proportion of the Gross Domestic Product.

“The commission’s ongoing strategy implementation aims to attain an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019,” she said.

According to her, the specific measures planned to achieve this include, first, the expansion of coverage of the CPS to the underserved economic sectors through micro-pension and renewed enforcement of compliance.

“Our objective in this direction is to attain at least 20 million contributors by the year 2019,” she said.

The acting director-general said it sought to grow the assets through more investments in variable income instruments that could generate higher returns.

In order to achieve this, she said the commission commenced the implementation of the multi-fund structure in July, 2018, which segregated the funds based on the risk profile of contributors and gave them an opportunity to choose subject-to-age parameters.

Dahir-Umar stated that the increase in contribution rates in the Pension Reform Act 2014 from 15 per cent to 18 per cent — 10 per cent by employer and eight per cent by the employee — would also increase the size of pension funds when fully implemented for treasury funded Federal Government’s Ministries, Departments and Agencies.

“The commission has also intensified efforts at ensuring the payment of all outstanding pension liabilities, including accrued pension rights and pension increases that are yet to be implemented,” she said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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