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FG Unveils Pension Plan for 80 Million Informal Sector Workers

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  • FG Unveils Pension Plan for 80 Million Informal Sector Workers

President Muhammadu Buhari has unveiled a Micro Pension Plan for people operating in the informal sector of the economy, even as he promised to halt the rot in the nation’s pension system.

The President, while unveiling the pension plan on Thursday in Abuja, noted that those in the informal sector needed to be captured in the plan just like those in the formal sector.

The Micro Pension Plan targets the significant majority of Nigeria’s working population who, incidentally, operate in the informal sector.

With an estimated 80 million people working in the informal sector of the economy, the Micro Pension Plan would take care of participants from various informal sector workers including market women, members of the National Union of Road Transport Workers, and members of textile, garment and tailoring associations.

Others are tricycle operators and Okada Riders Associations, butchers associations, workers in the movie and performing arts industry, mechanics and other workers in the automotive industry and single professionals like lawyers, accountants and many others.

Buhari said his administration understood the importance of the pension industry, adding that this was why the Micro Pension Plan was conceived so that operators in the informal sector would have something to fall back on when they retire from active service.

He added that despite its lean resources, the Federal Government would continue to support the National Pension Commission in order to successfully implement the initiative.

As part of the government’s support to the initiative, he directed that the Financial System Strategy 2020 should support the plan through its financial inclusion programme.

Buhari said that in the last three years, his administration had provided grants, technical support and loans to small businesses, noting that through such interventions, the lifestyle of many people had changed for the better.

Having achieved so much with making the business environment-friendly for businesses, the President said it was imperative to have a social protection plan in form of pension for traders, farmers, and tailors, among others, operating in the informal sector of the economy.

Earlier, the acting Director-General, PenCom, Aisha Dahir-Umar, disclosed that up to N6.51tn of total pension assets had so far been invested in government securities.

She added that this represented 73 per cent of the total pension assets.

The DG explained that another N95.31bn was invested in infrastructure, while N7.19bn went into the subscription of the Federal Government’s Green Bond.

Explaining the Micro Pension Plan, she said that under the plan, 40 per cent of the amount contributed could be accessed for contingency purpose while the balance of 60 per cent would be set aside for retirement benefit.

She said while contributors could start drawing from their 40 per cent contribution after three months of making the initial deposit, the 60 per cent balance could only be accessed at the age of 50 during retirement.

She said through the implementation of the Micro Pension Plan, it was expected that the level of old age poverty would be reduced by 85 per cent.

The DG said, “This event is remarkable because it unveils a unique financial product, which democratises the savings culture in Nigeria in a systematic and efficient manner.

“The product also perfectly aligns with the current social empowerment programmes of the Federal Government, as it seeks to ensure, in the long-term, the sustainability of the benefits of the empowerment programmes for the participants, who may seize this opportunity to save for their old age.

“Our objective is to ensure efficiency and effectiveness in service delivery as well as transparency and accountability in the administration of the product by licensed pension operators.

“With the formal launch and subsequent successful implementation, the Micro Pension Plan is expected to significantly expand pension coverage to greater number of Nigerians and further generate additional long-term funds for economic development.

“The Commission would collaborate with relevant stakeholders to sensitise and enlighten the target participants and the public on the features and benefits of the plan.”

The Secretary to the Government of the Federation, Mr Boss Mustapha, expressed optimism that the initiative would expand pension fund coverage to the informal sector.

He said that the unveiling of the plan by the President would make a greater number of Nigerians to expand the pool of investible funds available to the economy.

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.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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