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W’Bank Board Meets on Nigeria’s $150m Mining Loan Request

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  • W’Bank Board Meets on Nigeria’s $150m Mining Loan Request

The Board of Governors of the World Bank is currently meeting to discuss the $150m loan that Nigeria is seeking from the institution to boost the fortunes of the mining sector, the Minister of Mines and Steel Development, Dr. Kayode Fayemi, has said.

Fayemi stated this at the 53rd Annual International Conference and Exhibition of the Nigerian Society for Mining and Geosciences in Abuja on Tuesday.

The minister also stated that the Federal Government was targeting $25bn contribution to the nation’s Gross Domestic Product from the mining sector by the year 2026.

He said, “We have commenced a systematic effort to build knowledge and confidence among Nigerian financial institutions to support mining projects.

“In addition, we intend to establish the Nigerian Solid Minerals Investment Fund, structured as a private sector oriented investment outfit to provide financing to private sector-led projects in the mining sector.

“The Federal Government recently approved about N30bn from the Natural Resources Fund to promote exploration for new minerals and improve the regulatory framework in the ministry.

“The ministry, through the Federal Government, is also negotiating a $150m loan from the World bank to commence the Mindiver Project aimed at further resuscitating the ailing sector. Today (Tuesday), the bank’s board is meeting in Washington to consider the concessional loan.”

Should Nigeria successfully implement proposed recommendations for the sector, growth is expected to return to the sector in the form of new exploration activities, operations and production from active mining, functional processing and refining capacity, and higher value-addition in exports, the minister said.

Fayemi said, “Already, we are seeing the green shoots of growth if we go by the evidence coming out of the National Bureau of Statistics. The net outcome will be the creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs.

“We anticipate contribution to mining GDP to exceed $25bn by 2026 as industries are better able to use the output of the sector, substituting for imports.”

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

32 States Not Remitting Workers’ Contributory Pensions – PenCom

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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.

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Economy

East Africa to get US$20 Million from OPEC Fund for SMEs 

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The OPEC Fund approves US$20m for SMEs in East Africa

The OPEC Fund for International Development (the OPEC Fund)  has signed a US$20 million term loan in favor of East African Development Bank (EADB). EADB will use the loan to support small- and medium-size enterprises (SMEs) and infrastructure projects in East Africa.

EADB is an important regional development institution for delivering key development objectives across the East Africa region. It enjoys a high level of commitment from member states Kenya, Uganda, Tanzania and Rwanda, as well a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions.

SMEs account for more than half of EADB’s portfolio. They play an important part in development, driving economic growth and employment opportunities in East Africa and in developing countries more generally. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs.

“We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal (SDG) 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.”

Vivienne Yeda, the Director General of EADB, said: “We are pleased to receive a line of credit of US$20 million from the OPEC Fund dedicated to financing SMEs and infrastructure projects in EADB member countries. We appreciate the confidence placed in the EADB by the OPEC Fund. By financing SMEs, we expect to promote enterprises that generate employment opportunities, social economic development and consequently promote regional integration. The SME sector is a critical pillar for sustainable economic growth as it is the backbone of the EADB member countries’ economies.”

This is the third loan the OPEC Fund has provided to EADB in support of SMEs. In 2001, the organization approved US$10 million, followed by a further US$15 million in 2013.

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US Poll: Investors ‘Freaking’ Over Possible Contested Outcome of U.S. Election

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A disputed result in November’s U.S. presidential election is now the number one concern for investors – even ahead of a second wave of Covid-19 – according to a new global survey.

The poll carried out by deVere Group, one of the world’s largest independent financial advisory and fintech organisations, asked more than 700 clients ‘What is your biggest investment worry for the rest of 2020?’

A contested U.S. election was the number one (72%); the impact of a Covid-19 second wave (18%) and U.S.-China trade war (5%). The remaining 5% was made up of other geopolitical issues, including Brexit.

735 people resident in the UK, North America, Europe, Asia, Africa, Latin America and Australasia took part in the poll.

Of the poll’s findings, deVere Group CEO and founder, Nigel Green says: “Investors around the world are beginning to freak about the U.S. presidential election.

“But not about whether Trump or Biden wins, rather over the looming possibility of a disputed outcome.

“President Trump is already questioning the legitimacy of the election, heightening the chances of a contested result and an ensuing constitutional crisis in the world’s largest economy.

“It’s getting ugly and investors are, rightly, concerned that this will generate massive waves of volatility in the markets, not only in the U.S., but around the world.”

He continues: “Investors are telling us this is their biggest investment worry for the rest of 2020.

“It is likely that any election-triggered volatility will be highly impactful for may be only two or three weeks.

“As always, investors should remain in the market during this time.”

Rational investors, Mr Green believes, should be capitalising on any election turbulence.

“There are two key reasons why investors should be building up their portfolios in volatile times.

“First, are long-term benefits. There are many unknowns, but what we do know is that over the longer-term the performance of stock markets is fairly predictable: they go up.

“Indeed, for this reason, over a longer time horizon, investing in equities is almost universally recognised as one of the best ways people can accumulate wealth.

“By not topping up and diversifying portfolios in volatile periods, investors are pushing back the longer-term benefits they could be starting to reap.  Why forsake the long-term gains that would be generated on money invested now?”

“Second, the buying opportunities.  The see-sawing markets are a chance for investors to put new money into markets at lower prices.  A slump in the market means that there are high-quality equities available at more attractive prices.”

The deVere CEO concludes: “A contested outcome of the U.S. presidential election will almost inevitably send the stock markets into a temporary tailspin – and this is weighing on investors’ minds.

“I would argue, they should try and use the volatility to their financial advantage where possible and appropriate.”

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