Economy
Senate Passes Nigerian Insurance Industry Reform Bill, Awaits Assent
By Adedapo Adesanya
The Senate has passed the 2014 Nigerian Insurance Industry Reform Bill, following the adoption of the report by the Committee on Banking, Insurance, and Other Financial Institutions.
The report was presented by the committee’s chairman, Mr Adetokunbo Abiru during the plenary session on Tuesday.
The bill is awaiting assent by President Bola Tinubu to become codified and executed as a law.
Mr Abiru explained that the bill, which was read a second time on July 18, sought to consolidate various existing laws regulating insurance businesses in Nigeria.
He listed the relevant laws to include the Insurance Act 2003, the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, the National Insurance Corporation Act, and the Nigerian Reinsurance Corporation Act.
A major objective of the bill, according to the lawmaker, is to create a robust legal and regulatory framework for the insurance sector, enabling it to contribute positively to Nigeria’s financial landscape.
He emphasised the need for effective risk-based supervision in the insurance sector, arguing that the current rule-based regulatory system had become obsolete.
The former chief executive of Polaris Bank noted that stakeholders, during the public hearing, widely supported the bill, highlighting that existing laws no longer meet the evolving needs of the industry.
“The current insurance legislation is over two decades old and lacks provisions to address contemporary challenges and foster growth and innovation,” he said.
He also pointed out that legal obsolescence had led to regulatory inefficiencies, hampering the industry’s global competitiveness.
Mr Abiru urged the Senate to pass the bill, which would provide a comprehensive framework for the regulation of all types of insurance initiatives in Nigeria.
His colleague, Mr Jimoh Ibrahim raised concerns about the proposed minimum capital requirement of N45 billion for reinsurance businesses, suggesting the status quo should be maintained due to the current economic situation.
He highlighted that the passage of the bill was necessary to align the insurance ecosystem with contemporary economic realities, which would ultimately benefit the country.
“This Act, once it receives concurrence from the House of Representatives and assent from the President, will significantly contribute to shaping our economy for the better.
“Economies are dynamic and constantly changing, so it is incumbent upon the authorities of every nation to update their legislation to align with contemporary realities.
“This is precisely what the passage of this legislation aims to achieve to restructure the entire insurance ecosystem in line with current realities.
“I am confident that the country will benefit greatly when the law is eventually assented to.”
By Aduragbemi Omiyale
Efforts are being made by the Senate to abolish informal currency markets in the country by amending the Central Bank of Nigeria Act of 2007, meaning only the official market would be recognised by law to discourage round-tripping.
A bill to make this a reality has already passed the first reading at the Senate after the Chairman of the Senate Committee on Reparations and Repatriation, Mr Ned Nwoko, moved a Bill for an Act to Alter the Central Bank of Nigeria Act, 2007, No. 7, to Prohibit the Use of Foreign Currencies for Remuneration and for Other Related Matters.
The bill, when passed into law by the President, will also make it an offence to use any foreign currency for domestic transactions.
Mr Nwoko said the idea is to create demand for the local currency, the Naira, which is almost at its lowest ebb because of its depreciating value at the currency market.
The Nigerian economy is bleeding because many people do not have confidence in the country’s legal tender and is not being used as a store of value.
At the moment, Nigeria operates more than one foreign exchange (FX) market. The official market is the Nigerian Autonomous Foreign Exchange Market (NAFEM), but currencies are also traded in the black market and the peer-to-peer (P2P) segment via cryptocurrency and all have different exchange rates.
At the plenary on Tuesday, Mr Nwoko said his bill intends to eliminate discriminatory practices and strengthen confidence in the local currency.
When passed and signed into law, nobody living in Nigeria will be allowed to pay salaries of Nigerians or expatriates or transact any business in the country with the Dollar, Pound Sterling or Euro or any other foreign currency.
Also, the government will not be allowed to sell crude oil or other commodities or products in foreign currency but “exclusively in Naira.”
According to him, international buyers would be compelled “to purchase the [local] currency” to drive “its demand and value.”
The lawmaker emphasised that this will “position the Naira as the central currency for all financial operations, reinforcing its dominance in the economy.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.29 per cent appreciation on Tuesday, December 17 lifted by FrieslandCampina Wamco Nigeria Plc.
After closing in the past three sessions in the red territory, the share price of FrieslandCampina Wamco Nigeria Plc improved by N3.90 on Tuesday to settle at N44.00 per unit, in contrast to Monday’s closing price of N40.10 per unit.
As a result, the Unlisted Security Index (NSI) added 8.85 points to wrap the session at 3,023.80 points compared with 3,014.95 points recorded in the previous session.
In the same vein, the value of the trading went up yesterday by N3.03 billion to settle at N1.036 trillion compared with the N1.330 trillion it closed in the preceding session.
Business Post reports that during the trading session, three securities depreciated as Nipco Plc shrank by N14.70 to close at N132.30 per share versus the preceding closing rate of N147 per share.
Further, Geo-Fluids Plc weakened by 36 Kobo to finish the trading session at N3.55 per unit compared with Monday’s closing price of N3.91 per unit, and Afriland Properties Plc lost 21 Kobo to end the session at N15.99 per share, in contrast to the preceding day’s N16.20 per share.
On Tuesday, the volume of securities traded in the session went up by 496.4 per cent to 540,503 units from the 90,629 units recorded a day earlier, as the value of shares increased by 1,190.2 per cent to N29.4 million from the N2.3 million recorded on Monday, while the number of deals decreased by 16.7 per cent to 15 deals from the 18 deals recorded in the previous trading day.
When the market closed for the day, Geo-Fluids Plc was the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, trailed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
The most active stock by value (year-to-date) for the session remained Aradel Holdings Plc with 108.7 million units sold for N89.2 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc with 297.3 million units valued at N5.3 billion.
By Adedapo Adesanya
The federal government may approve the $1.3 billion asset sale deal between Shell and Renaissance, which was rejected in the coming weeks.
The Africa Report reported that deal may get approval following the announcement of Shell’s $5 billion investment in the Bonga North project.
According to the publication, the final investment decision (FID) served as a pavement for the oil major to get approval for the sale of its onshore and shallow water assets to Renaissance.
In October, the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, revealed that while the government had processed five divestment applications, only four were approved – leaving out Shell’s asset sale to Renaissance, a consortium made up of four indigenous companies including Aradel Holdings, ND Western, First Exploration and Production (E&P) and WalterSmith as well as the international energy group, Petrolin.
These assets, initially at $2.4 billion and now at $1.3 billion, include an estimated 6.73 billion barrels of crude oil and condensate, along with 56.27 trillion cubic feet of gas.
The FG rejected the transaction because the consortium did not have the financial, experiential, and technical capacities to take over the assets.
On Monday, Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc announced the FID on Bonga North, a deep-water project off the coast of Nigeria.
President Bola Tinubu welcomed the move, lauding it as a good investment into the nation’s oil and gas sector.
Bonga North will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility which Shell operates with a 55 per cent interest.
The Bonga North project will involve drilling, completing, and starting up 16 wells (eight production and eight water injection wells), modifications to the existing Bonga Main FPSO and the installation of new subsea hardware tied back to the FPSO.
Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day, with the first oil anticipated by the end of the decade.
Bonga North will help ensure Shell’s leading Integrated Gas and Upstream business continues to drive cash generation into the next decade.
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