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INEC Chairman Seeks Approval to Withdraw N5.2 Billion From Special INEC Fund

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INEC Seeking Approval to Withdraw N5.2 Billion

According to Electoral Act 2010, the Special INEC Fund was created to enable the commission save a certain percentage of its allocations for rainy days and emergencies. There has been no withdrawal since the inception of the special fund in 2010.

The chairman, Prof Yakubu said INEC had no problem with 2019 budget, however, the global health pandemic has disrupted the plans and strategies of the commission which led to some financial challenges in the 2020 budget.

N40 billion was proposed as INEC budget for 2021, this budget was expected to cover electoral expenses, litigations and overhead cost amidst growing personnel cost. However, the budget has been reduced to N36 billion as a result of the budget cut caused by the negative effect of COVID 19.

But what has happened now is our budget for 2020 dropped to N40 billion from N45.5 billion in 2019. And as a result of the 10 percent COVID cut, it further dropped to N36 billion in the middle of the year when we had already made preparation for expenditure, and therefore, since that fund is made for the rainy days, I informed the committee that the rainy day has come. So we are taking part of the fund to balance our budget for this year.” Prof Yakubu explained.

The cut in budget prompted the commission to seek Senate’s approval to withdraw N5.2 billion from the INEC SPECIAL FUND.

The Commission cannot be independent unless it is financially independent. There are some activities that happen that are time bound or bound by some specific provisions of the constitution that the Commission has to undertake,” he said to the media.

“So, the fund was established to allow the Commission to discharge those responsibilities. It was established in 2010 but there was no cause to spend from it, and from the last five years this Commission did not spend from it”, he further stated.

He further revealed the legal challenges faced by the commission on pre-election and post-election court cases from general elections held in 2019.

For instance, if we have a case for governorship election before the Supreme Court, it is a maximum of N4.5 million, but because of the number of cases, we are almost getting close to 1,700 pre-election and post-election cases in 2019 alone”.

“Every day you hear people going to court and joining INEC, but we will continue to do what we can within available resources”, he added.

Thereafter, he directed the INEC chairperson to, report back on specific legislative issues and restructuring of salary structures for the commission within the next three months.

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Banking Sector

Foreign Exchange: First Bank to Discontinue Dollar Transactions on Naira Card

First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022

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FirstBank Headquarter - Investors King

First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022. 

In a recent email that First Bank sent to its customers, the bank stated customers will no longer be able to perform international transactions on First Bank Naira credit card, virtual card and visa prepaid card. 

The message read, “Due to current market realities on foreign exchange, you will no longer be able to use the Naira Mastercard, Naira Credit Card, our Virtual card and Visa Prepaid Naira card for international transactions. This will take effect on 30 September 2022,” First Bank said. 

The message added that customers can only use their multicurrency and other permitted cards to make international transactions. 

“Please use your Visa Debit Multicurrency Card, Visa Prepaid (USD) Card and Visa Gold Credit Card to continue transacting abroad with limits of up to $10,000.” The statement concluded.

It could be recalled that in July 2022, Standard Chartered Bank also suspended international transactions on its naira visa debit card. 

Other banks that have suspended international transactions on naira cards include Flutterwave, Eversend and other financial technology platforms.

Investors King had earlier reported that Nigerian banks have reduced international transactions to $20 on Naira cards due to the ongoing foreign exchange scarcity in Nigeria.

The reduction started in 2020 from $500 to $100 in 2021. In March 2022, many of the financial institutions subsequently reduced international transactions on naira cards to $20. 

At the 364th Bankers Committee Meeting in Abuja in 2021, the CBN Governor, Godwin Emefiele disclosed that the apex bank will stop supplying foreign currency to Deposit Money Bank (DMBs) otherwise known as commercial banks by the end of the year.  He, therefore, urges them to source for their foreign exchange from export proceeds.

 

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Finance

FG Plans to Borrow to Finance 2023 Budget as Debt Profile Hits N42.84 Trillion

Nigeria’s total public debt stock is now N42.84 trillion, or $103.31 billion as of June 2022

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United States Dollar - Investors King Ltd

With the drop in oil production and Nigeria’s revenue generation, Nigeria’s public debt is projected to increase further in 2022 and 2023.

According to the Debt Management Office (DMO), Nigeria’s total public debt stock is presently N42.84 trillion, or $103.31 billion as of June 2022. 

As of March 2022, Nigeria’s total debt profile was N41.60 trillion or $100.07 billion. This shows an increase of N1.24 trillion in three months. 

Investors King learnt from the statement published on the DMO website on Tuesday that the total debt represents the domestic and external debt stocks of the federal government, the 36 states and the Federal Capital Territory (FCT).

The statement further clarified that the foreign component of the debt stands at N16.61 trillion, or $39.96 billion, the same figure it was in March 2022. While the local component increased to N26.23 trillion or $63.24 billion.

The statement also disclosed that a higher proportion (58 percent) of the external debts were concessional and semi-concessional loans which the government obtained from multilateral financial institutions such as the International Monetary Fund (IMF), the World Bank, Afrexim and African Development Bank. 

These concessions and semi- concessions include loans from bilateral lenders such as Germany, China, Japan, India and France,”

Meanwhile, the increase in domestic debt stock from N24.98 trillion or $60.1 billion in March to N26.23 trillion or $63.24 billion in June was due to the credit facilities which the Federal Government raised to part-finance the deficit in the 2022 budget. 

Nigeria’s rising debt profile has been a major subject of discussion among analysts. Investors King earlier reported that the 2023 budget proposal has a deficit of more than N12 trillion which will likely be financed by another set of borrowings and subsequently increase the country’s debt profile. 

Nevertheless, the Debt Management Office, however, stated that Nigeria’s Debt-to-GDP ratio remains under control at 23.06 percent, Nigeria’s self-imposed limit of 40 percent. 

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Insurance

Prudential Zenith Life Insurance Grows Profit After Tax by 75 in 2021

Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.

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Prudential Zenith Life Insurance

Despite rising economic uncertainties and the challenging business environment experienced in 2021, Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.

The company disclosed this in its audited financial statement for the period ended December 31, 2021, and obtained by Investors King on Monday.

In the financial statement approved by the National Insurance Commission (NAICOM), Gross Written Premium (GWP) and Annualized Premium Equivalent (APE) expanded by 16.3% and 9.3%, respectively. This was a result of the 27% growth recorded in new business acquisition for Group Life written during the period.

Similarly, investment income grew by 30% year-on-year due to a significant increase in the interest-generating assets of the company, and commission income also increased by 43% during the period.

The financial performance is a testament to the continued focus on investments, as the company remains committed to building a strong market-leading position in Nigeria by enhancing its capabilities, strengthening its digitally enabled multi-channel distribution network, and broadening the range of products and services that are available to customers in order to meet their needs.

Despite the challenges experienced during the Covid-19 pandemic in 2020, Prudential Zenith was able to achieve this strong growth in 2021 and is poised to continue improving its performance in the upcoming financial years. Prudential Zenith will continue to develop and launch unique products to meet customers’ needs, leveraging technology and its core corporate governance structure to deliver faster claims settlement. The company will also continue to prioritize the health, safety, and welfare of customers, who subscribe to its unique insurance product offerings.

Prudential Zenith Life Insurance Ltd (PZL) is a subsidiary of Prudential Plc., established in 2017 when Prudential Plc acquired a 51% holding in Zenith Life Insurance. PZL is one of the most capitalized companies in the Nigerian insurance industry with a wide range of individual products including savings & investments-linked products, endowment, and protection products designed to meet the needs of individuals and their families.  For corporate clients, the company’s product offerings include Group Life, Key-Man Assurance, Credit Life, School Fees Protection, and Mortgage Protection, ensuring that the welfare of clients’ staff and families are met.

Prudential Plc provides life and health insurance, and asset management in Africa and Asia, helping people get the most out of life by making healthcare affordable and accessible and by promoting financial inclusion. Prudential protects people’s wealth, helps them grow their assets, and empowers them to save for their goals. It has more than 19 million life customers and is listed on stock exchanges in London (PRU), Hong Kong (2378), Singapore (K6S), and New York (PUK).

Prudential Plc has insurance operations in eight countries in Africa: Nigeria, Cameroon, Cote d’Ivoire, Ghana, Kenya, Togo Uganda, and Zambia.  With over 1 million customers, Prudential Africa works with over 11,000 agents and six exclusive bank partnerships, with access to over 600 branches to bring value-added insurance solutions to its customers.

 

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