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Pensions: States Failed to Remit N3.4bn Deducted From Workers’ Pay, Says PenCom

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  • Pensions: States Failed to Remit N3.4bn Deducted From Workers’ Pay, Says PenCom

States operating the Contributory Pension Scheme refused to remit about N3.4bn pension contributions deducted from their workers monthly remunerations into their respective Retirement Savings Accounts with their Pension Fund Administrators.

The acting Director-General, National Pension Commission, Aisha Dahir-Umar, disclosed this during the second quarter consultative forum for states in Lagos on Wednesday.

The forum was attended by pension compliance officers and other stakeholders from different states and pension fund operators’ offices.

She also said that N8.09bn was remitted as pension contributions in the first quarter of 2019.

Dahir-Umar said, “Based on PFAs’ returns, over N3.4bn pension contributions are uncredited into state employees’ RSAs as of May 31, 2019, and the age analysis showed that over 38 per cent of this amount had been outstanding for over one year.

Dahir-Umar, who was represented by the Head, States Operations Department, PenCom, Dan Ndackson, said a major item, which should occupy a pride of place during deliberations, was the recurring issue of uncredited remittances, which denied concerned employees the investment income that should have accrued to them.

She added that it was heart-warming to observe the steady progress of the implementation of the CPS in the states, especially with regards to the remittance of pension contributions.

“Returns submitted to the commission by the PFAs showed that over N8.09bn was remitted to them as pension contributions of state employees in the first quarter of 2019,” she said.

The PenCom boss informed that the second quarter had recorded remarkable achievements in ensuring seamless implementation of the CPS in states.

In this regard, she said the commission, as part of its mandate of supervising the smooth implementation of the CPS and to ensure excellent service delivery, especially in state pension administration, introduced branch inspection of PFAs in states.

Dahir-Umar reported that the commission had so far conducted three of such branch inspections in Edo, Ondo and Ekiti states.

“As more inspections of PFA branches are upcoming, the commission is currently utilising the outcomes of these inspections in ensuring that PFAs take the necessary remedial actions to ensure excellent service delivery in the pension industry,” she said.

She added that the commission’s collaboration and concerted efforts with various states had led to significant in-roads in the areas of stakeholder engagement, capacity development and implementation milestones.

Notable among the many achievements within the second quarter were the meetings held with the governors-elect (now governors) of Lagos and Bauchi states, she mentioned.

Dahir-Umar said, “We are also pleased to note the giant stride taken by the Benue State Government recently by enacting the Benue State Pension Reform Law 2019, in May 2019.

“Besides joining the league of states that have commenced the process of implementing the CPS, the Benue State Law incorporated all the observations made by the commission in the draft bill before passage into law.

“We are, therefore, confident that with this sound and sustainable legal framework in place, Benue State’s implementation will not face major challenges.”

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

Oil Firms Borrowed N130B From Banks in February – CBN

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Operators in the downstream, natural gas and crude oil refining sectors of the Nigerian oil and gas industry borrowed N130b from Nigerian banks in February amid the significant rise in global crude oil prices.

The debt owed by the oil and gas companies rose to N4.05tn in February from N3.92bn in January, according to the latest data obtained from the Central Bank of Nigeria on Monday.

Operators in the upstream and services subsectors owed banks N1.26tn in February, down from N1.27tn a month earlier.

The combined debt of N5.31tn owed by oil and gas operators as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.

Oil and gas firms received the biggest share of the credit from the deposit money banks to the private sector.

The slump in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.

A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, reflecting expectations of rising asset risk and weakening government support capacity over the next 12 to 18 months.

“Nigerian banks’ loan quality will weaken in 2021 as coronavirus support measures implemented by the government and central bank last year, including the loan repayment holiday, are unwound,” said Peter Mushangwe, an analyst at Moody’s.

The rating agency estimated that between 40 percent and 45 percent of banking loans were restructured in 2020, easing pressure on borrowers following the outbreak of the pandemic.

Another global credit rating agency, Fitch Ratings, had noted in a December 8 report that Nigerian bank asset quality had historically fallen with oil prices, with the oil sector representing 28 percent of loans at the end of the first half of 2020.

It said the upstream and midstream segments (nearly seven percent of gross loans) had been particularly affected by low oil prices and production cuts.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

The rating agency predicted that Nigerian bank asset quality would weaken over the next 12 to 18 months.

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Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

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The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

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Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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