General
Fitch Assigns African Risk Capacity IFS ‘BBB+’ With Stable Outlook
By Adedapo Adesanya
Fitch Ratings has assigned African Risk Capacity Limited (ARC Ltd), the commercial subsidiary of the African Risk Capacity Group (ARC Group), an ‘Insurer Financial Strength (IFS) Rating of ‘BBB+’ and a ‘Long-Term Issuer Default Rating (IDR) of ‘BBB’ with a stable outlook.
Announcing the rating on its official website, Fitch indicated that “the ratings reflect the commitment and credit quality of ARC’s sponsors, as well as the company’s good business profile, very strong capitalisation and leverage.”
Continuing, Fitch stated that, ARC Ltd.’s capital position is very strong, and a key strength for the rating level, adding that the company benefits from the treatment of the $67 million of Class C members’ returnable capital as Tier 1 capital under the Bermudan Solvency regime; and as equity capital under Fitch’s Prism Factor-Based Capital Model (Prism FBM).
As a result, ARC Ltd reported a Bermudan enhanced capital requirement (ECR) ratio of nearly 2500 per cent at March 31, 2020, while the company’s score on Fitch’s Prism FBM was “Extremely Strong” at end-2019.
Speaking on this development, the CEO ARC Ltd, Mr Lesley Ndlovu noted, “Obtaining an industry rating is an important enabler for our strategy to access new business by taking on inwards reinsurance, thereby allowing us to better meet the needs of countries by supporting national agricultural insurance schemes and providing capacity to local insurance companies.”
“Considering that this is the first time ARC Limited is being rated, we are gratified for being ranked among the top-notch insurance companies in Africa. With only one notch lower than Africa Re, we are encouraged more than ever to leverage our competitive edge towards becoming the best disaster risk insurer in Africa in the service of our Member States”, Mr Ndlovu concluded.
ARC Ltd is funded by the UK Department for International Development (DFID) and the German Development Bank KfW. Fitch’s assessment of these funders’ willingness and ability to support ARC results in a one-notch uplift to its standalone credit profile.
In addition to their capital contributions, Fitch believes DFID and KfW provide support to the company that is positive to the credit rating through governance and strategic input, while also facilitating sovereign participation in the business through premium subsidy schemes.
Also sharing his satisfaction with the rating, Mr Ibrahima Cheikh Diong, the Group Director-General, ARC Group, agreed that a BBB+ ranking of ARC Ltd, by an internationally acclaimed agency like Fitch, should boost the faith of ARC stakeholders in the viability of its model relative to meeting set obligations to the Member States.
“Our approach in providing sovereign disaster risk insurance coverage to African Union Member States is anchored on the mandate to ensure that vulnerable populations receive immediate support upon the trigger of the set parameters. Ultimately, we want to become the development insurer of choice for Africa offering multiple products; and a BBB+ by Fitch is a bold step in this quest”, said Mr Diong.
By Fitch’s assessment, ARC’s portfolio diversification is still limited as the company currently offers a single parametric insurance product covering drought risk. Geographic diversification is moderate with the 2019/20 risk pool (‘members’) covering only 11 African Union Member States out of a possible 34, with the number of members having been volatile in prior years. Fitch expects ARC’s business profile to improve through increased diversification as more countries sign up to the ARC project attracted by a broader range of products.
ARC was established to be managed on a commercial basis and achieve very modest profits, but this remains secondary to the company’s development goals. Fitch believes a degree of risk tolerance is inherent in the company’s underwriting practices as development goals are prioritised over underwriting margins.
The rating actions factored in Fitch’s current assessment of the impact of the COVID-19 pandemic, including its economic impact, under a set of rating assumptions outlined on Fitch’s website. These assumptions were used by Fitch to develop Pro-forma financial metrics for ARC Ltd that are compared with rating guidelines defined in its criteria. Under the rating-case assumptions, ARC Ltd’s credit fundamentals remain good and commensurate with a ‘BBB+’ IFS Rating.
In just over 6 years of operations, 56 policies have been signed by the ARC Member States with $83 million paid in premiums for cumulative insurance coverage of $641 million and the protection of 64.1 million vulnerable population in participating countries.
From this, ARC Ltd made $60m payouts to the Governments of Senegal, Niger, Mauritania, Malawi, Cote D’Ivoire, the START Network and WFP following droughts episodes in 2014, 2015 and 2019. These funds have gone towards assisting over 2.5 million people whose livelihoods rely on agriculture, preventing the loss of hard-earned developmental gains in addition to 1 million.
Governments have used ARC Ltd insurance payouts to scale up cash transfers, subsidize livestock feeds, replenish depleted food reserves, and distribute emergency food supplies. Recently, in 2020, payouts of $2.13 million were made to the Republic of Madagascar to cover 600,000 vulnerable population; and $1.8m to the Government of Zimbabwe and WFP to support over 500,000 people affected by the drought.
General
NDLEA Arrests Engineer For Concealing Illicit Drugs In Pressure Machines
By Adedapo Adesanya
The National Drug Law Enforcement Agency (NDLEA) has arrested a suspected drug trafficker, Mr Egwu Phillip Inya, a building engineer, while attempting to take delivery of illicit consignments concealed in pressure machines imported from South Africa.
According to a statement by the NDLEA spokesperson, Mr Femi Babafemi, on Sunday, the 42-year-old Egwu was arrested on Monday, December 2, 2024, at Okeyson Motor Park in Enugu when he showed up to collect three units of pressure machines inside which were hidden parcels of Loud, a synthetic strain of cannabis, weighing 7.40 kilograms.
Mr Babafemi stated that the consignments had arrived the Murtala Muhammed International Airport, Ikeja Lagos import shed on November 29, 2024.
“Following credible intelligence, officers of the MMIA Strategic Command of the Agency had monitored the shipment pass through clearing processes up to a logistics company’s warehouse outside the airport where it was to be collected by the consignee.
“The importer however changed the point of collection to Enugu at the last minute. As a result, NDLEA operatives in a follow-up operation in Enugu arrested Egwu when he showed up to collect the consignments.
“No fewer than 511,000 pills of tramadol were recovered from a Siena vehicle at Hildi, Askira Uba way in Adamawa state by NDLEA operatives on patrol along the road in the early hours of Friday 6th December.
“The occupants of the vehicle had made a detour upon sighting the NDLEA team and, after a distance, abandoned the vehicle with the consignments after noticing the operatives were on their trail,” the statement said.
It also added that in Ekiti State, two suspects, Mr Olanrewaju Alale, 48, and Mr Babatunde Kayode Ijadahun, 55, were arrested along Ise- Emure road in a J5 bus marked EPE 958 XJ while transporting 108 jumbo bags of cannabis weighing 1, 323 kilograms to Owo, Ondo state from where they claimed the consignment will be moved to the North for distribution.
It further read, “Another suspect, Adekunle Yusuf, 33, was nabbed by NDLEA operatives with 704 kilograms of the same psychoactive substance, concealed in white sacks on Friday 6th December at Idere road, Igboora, Oyo state.
“In Lagos, a grandmother, 65-year-old Ramata Bola Adeyemo was on Friday 6th December arrested by NDLEA operatives at 62 Odunfa Street, Lagos Island, where 20.6 litres of codeine-based syrup was recovered from her. Also arrested in Lagos was Alhaji Lawan Manga who was picked up at Ogundana Street, Ikeja on Thursday, December 5 while 4.7kg cannabis and 1.3kg tramadol were recovered from him.
“With the same vigour, Commands and formations of the Agency across the country continued their War Against Drug Abuse, WADA, sensitization lectures to schools, worship centres, workplaces and communities among others in the past week. These include WADA sensitisation lecture to students and staff of Progressive Secondary School, Ado Awaye, Oyo state; Muslim Grammar School, Ede, Osun state; Government Girls College, Maiduguri, Borno state; Community Secondary School, Ogale, Rivers state; Santa Maria Secondary School, Igogoro, Enugu state; and Chiranci Upper Basic Junior Secondary School, Bichi, Kano state while Lagos State command of NDLEA organised WADA enlightenment lecture for leaders and members of NURTW, Orile Agege, Lagos, among others.
The chief executive of NDLEA, Mr Buba Marwa, stated that their operational successes and those of their compatriots across the country especially their balanced approach to drug supply reduction and drug demand reduction efforts are well appreciated.
General
Aigbovbioise Aig-Imoukhuede for Africa Financial Summit in Morocco
By Aduragbemi Omiyale
The chief executive of Coronation Asset Management, Mr Aigbovbioise Aig-Imoukhuede, will speak at the Africa Financial Summit (AFIS) fixed for Monday, December 9 to Tuesday 10, 2024, in Casablanca, Morocco.
Mr Aig-Imoukhuede, who is also the President of the Fund Managers Association of Nigeria (FMAN), will participate as a distinguished speaker on a strategic panel titled Connecting the Dots Between Investors and Issuers with AI and Fintech, with the session to be moderated by Senior Director at McKinsey and Company, Anass Bensrhir.
He will be joined by the Director General of the Securities and Exchange Commission (SEC) in Nigeria), Mr Emomotimi John Agama; and the Chairman of the Financial Regulatory Authority in Egypt, Mr Mohamed Farid Saleh.
The panel will delve into critical topics such as cultivating a digital investment culture to attract investors and issuers, scaling digital investment products through traditional banking channels, and fostering strong collaboration between fintech innovators and regulators.
Mr Aig-Imoukhuede will share insights on how Coronation is developing digital infrastructure and frameworks to enable wealth creation at all levels—individual, organisational, and public sector—while influencing economic growth across the continent.
“At Coronation, we believe that wealth creation should be accessible to all, and technology is the key to making this a reality.
“Through AI and fintech, we aim to bridge the gap between investors and issuers, laying the foundation for a thriving financial ecosystem across Africa. The discussions at AFIS will be instrumental in driving this transformation,” he stated.
Mr Aig-Imoukhuede is a seasoned leader in the financial sector, with extensive experience in wealth management, investment strategy, and policy advocacy.
His leadership at Coronation Asset Management highlights his expertise in driving innovative investment strategies, advancing wealth management solutions, and fostering sustainable growth across Nigeria’s financial ecosystem and the broader African market.
Coronation’s participation at AFIS reflects its commitment to redefining financial services through innovation and partnerships.
General
How to Stop Recycling of Criminals, Ex-Convicts—Onabulo
By Emmanuel Udom
The president of the Crime Reporters Association of Nigeria (CRAN), Mr Olalekan Onabulo, has explained how the various justice systems could work to stop the recycling of criminals and ex-convicts in the country.
Speaking in his welcome address at the CRAN Public Lecture/Award ceremony held at Sheba Event Centre in Ikeja, Lagos, Mr Onabulo said that there is no denying the fact that the pursuit of justice and security is a shared responsibility that demands collective efforts and collaborations.
He further explained that since recidivism, which is the recycling of criminals and ex-convicts is a hydra-headed monster, which has become a significant source of concern for security agents in the country.
Security operatives are in most cases ambushed, killed or maimed by criminals earlier arrested, investigated and prosecuted who returned to a life of criminalities after their convictions.
According to the CRAN leader, these criminals are emboldened and unrepentant and may want to take their pounds of flesh from security operatives to carry out their professional duties.
Speaking on Justice System Administration and Security in Nigeria: Challenges, Opportunities, and Solutions, Mr Onabulo said all hands must be on deck to address the issue as the whole process seems to have failed and must be redeemed by all and sundry.
”The security operatives, the judiciary and indeed all Nigerians must collaborate and work together to create a safer, just, and equitable society for all,” he stated.
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