States Are Not Remitting Staff’s Contributory Pnesions
All state governments’ retirees in the country suffer either outright non-payment or long waits to access their pension benefits under the Contributory Pension Scheme.
Industry watchers have blamed this ugly trend on lack of political will by state governments to ensure a functional pension scheme in their states.
Retirees of states that have complied usually wait for between two and six years before they get paid, a source at PenCom said.
Status of implementation of the CPS in states as of June 30 showed that only four states and the Federal Capital Territory Administration had high level of compliance according to the National Pension Commission.
The commission listed theses five states that were funding the accrued rights of their workers regularly and commenced payment of pensions as Lagos, Kaduna, FCT, Osun and Delta.
Despite their higher level of compliance, these four states and the FCT still delayed in commencing pension payments to their retirees.
Lagos State, for instance, that received the National Pension Commission’s award on compliance has not started paying retirees that retired in 2018, 2019 and 2020.
The complying states blamed the delay in payment to backlog of arrears that needed to be cleared.
Anambra was funding the accrued rights of Local Government workers but not paying pensions under the CPS according to PenCom’s compliance list.
Five states with other pension schemes apart from the CPS are Jigawa, Kano, Yobe, Gombe and Zamfara.
The states at bill stage of joining the CPS are listed as Kwara, Plateau, Cross River, Borno, Akwa Ibom, Bauchi and Katsina.
The second quarter 2020 report of PenCom stated that 25 states had enacted pension laws on the Contributory Pension Scheme while seven states were at the bill stage.
Out of the five states operating other pension schemes, four states had adopted the Contributory Defined Benefits Scheme while one operates the Defined Benefits Scheme.
Among the states that had enacted laws on CPS was Niger State which suspended the implementation of the CPS in April, 2015.
However, the state governor recently approved the resumption of the scheme with effect from June 2020.
Among the states that adopted CDBS, Jigawa State was the only state that was fully implementing the scheme by consistently remitting employee pension contributions to selected PFAs to manage and had conducted actuarial valuation to ascertain any shortfall in the fund.
Kano State was yet to transfer its pension funds to licensed operators, and had huge arrears of pension liabilities as of the end of the review period.
Zamfara and Gombe States were yet to commence implementation of the CDBS as of the end of the quarter.
The Chairman, Trade Union Congress, Ogun State, Olubumi Fajobi, decried the backlog of arrears of pension and long waits suffered by retirees under the CPS.
He said, “Take Ogun State for example; we have a very large backlog running to almost N40bn that has not been remitted and that is for about 107 months.
“However, the government is taking steps to redress this.”
He worried that the governments were not committed in terms of remitting the contributions of workers.
Fajobi said, “The waiting period is also of concern for those who are accessing it. We have people waiting for two, three years before they can access any fund from the CPS after retirement.
“This makes a whole nonsense of the scheme from the 2004 reform and also for 2014 laws.”
The President, Association of Senior Civil Servants of Nigeria, Bola Audu, said any state that was not ready for the CPS should not start it, and those who started should endeavour to run it properly and not frustrate retirees.
“Pension is something somebody has worked all his life for and he intends to earn it when he is no longer able to work. So when you now play politics with those who are in pension, I don’t think it is a good idea at all,” he said.
A former President, TUC, Peter Esele, who described the pension situation as unfortunate said it encouraged corruption because those in active service were seeing the sufferings of retirees, and would want to amass as much funds as possible before they retired.
The Director, Centre for Pension Rights Advocacy, Ivor Takor, said the Pension Reform Act in 2004 created a lacuna.
What became obvious was that employees of states and local governments were not covered by or were excluded from the coverage of the Pension Reform Act 2004, he said.
Takor said, “The exclusion was not an oversight by the committee that carried out the reform, neither were sates and local government employees not covered in the executive bill that was sent to the National Assembly.
“Employees of states and local governments were covered in the executive bill sent by the President to the National Assembly.
“On the bill reaching the National Assembly, governors mobilised representatives of their states in both chambers of the National Assembly to remove employees of states and local governments from the bill before it was passed into law.
“Their reason was that the country was under civil rule; therefore, there must be the practice of true federalism, which does not allow the National Assembly to make laws for the states on an issue such as pension, which does not fall in the exclusive legislative list of the constitution.”
Takor said the mischief that found its way into the PRA 2004 was cured in the PRA 2014, which made the provisions of the Act to apply to any employment in public service of the Federation, Federal Capital Territory, states, local governments and the private sector.
Chairman, Federal Concerned Pensioners, David Adodo, lamented the treatment of senior citizens, who were denied their pension benefits.
The Allianz Global Pension Report 2020 recently ranked Nigeria 64th place, especially because of the insufficient adequacy of its pension system.
However, the acting Director-General, PenCom, Aisha Dahir-Umar, said the commission had continued to engage the state governments on compliance through interactive sessions, training and workshops.
Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom
Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.
The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.
Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.
Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.
“Farmers have been left at the whims and caprice of owners of the means of production.
“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.
“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.
“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.
“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?
“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.
CBN Predicts 2 Percent Growth for Nigeria in 2021
Despite the economic recession and numerous uncertainties encompassing Nigeria in recent months, the Central Bank of Nigeria (CBN) has said the nation will grow by 2 percent in 2021.
Speaking at the 2020 bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN), Godwin Emefiele, the Governor, CBN, said implemented government intervention programmes will aid the nation’s recovery by next year.
Emefiele further stated that the intervention efforts represent around 3.5 percent of Nigeria’s current Gross Domestic Product (GDP).
He said, “Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.”
On fast declining foreign reserves, the Governor said the institution has adopted a demand management framework designed to boost the production of items that can be produced locally and aid conservation of external reserves.
“Due to the unprecedented nature of the shock, we continued to favour a gradual liberalisation of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which rapid changes in the exchange rate could have on key macro-economic variables,” Emefiele stated.
The CBN projection came few weeks after the National Bureau of Statistics (NBS)’s report showed Africa’s largest economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria officially slid into the worse economic recession in almost 30 years and the second economic recession under the current administration.
While, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has projected that Nigeria would rebound from the recession in this final quarter or the very first quarter of 2021, falling revenue generation, rising capital flight amid weak demand due to the negative impact of coronavirus on earnings, household incomes and lack of jobs remain a concern.
COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday
Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.
Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.
The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.
OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.
This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.
Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.
“The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.
“President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.
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