Healthy growth at the PFAs
The Assets under management (AUM) of the Nigerian regulated pension industry increased by 20.2% y/y in August to N7.09trn (US$23.2bn). Market valuations were not the principal driver. This is a healthy increase when we consider the arrears in pension (and salary) payments to employees of state governments and public agencies. The FGN’s several initiatives to bolster state government finances notwithstanding, one reputable independent research body has estimated that at least 20 states were in arrears of some description as of June this year.
· Holdings of FGN paper amounted to 72.1% of AUM in August, compared with 69.3% one year earlier. There has however been a subtle shift: the share of FGN bonds has declined in line with a reported sharp fall in the PFAs’ bid at the monthly auctions while that of NTBs has risen from 12.1% to 18.6%.
· The PFAs were finally drawn to the stop rates of more than 22% that the CBN was setting at the time at its primary auctions and open market operations (OMO). The market has recently turned, guided by the CBN.
· PenCom’s latest data capture the first three months of the surge on the stock market, driven by new money from offshore investors.
· Nigeria’s reformed pension industry, shaped by legislation in 2004 and 2014, has been a success story. As such, we should not be surprised by moves to undo the good work in the National Assembly and by calls from officials for the AUM (the legal property of savers under contributory schemes) to be invested in government programmes.
· We welcome the monthly data releases from PenCom. We would also welcome independent industry analysis allowing investors to compare the performance of the pension funds.
Electricity tariff shortfalls hits N460bn, Discos mull force majeure: The current revenue shortfalls that have accumulated from the inability of the Nigerian Electricity Regulatory Commission (NERC) to allow 11 electricity distribution companies (Discos) to have cost reflective tariffs have now shot up to N460bn (US$1.3bn), thus burdening the operations of the Discos, the Association of Nigerian Electricity Distributors (ANED) has disclosed. (Source: Thisday)
Cement – backward integration saves Nigeria N240bn annually: Backward integration in the cement industry is saving the country up to N240bn (US$666.1m) annually, Lafarge Africa Plc has said. According to the firm, local manufacture of cement has also seen installed capacity increase from 2 million to 32 million metric tonnes since backward integration began in the sector in 2002. (Source: Punch)
Cross River, Siemens, others in 750MW power pact / FG approves transaction advisor for C’River deep seaport: The Cross River State Government has announced the signing of a Memorandum of Understanding with a consortium of energy firms led by Siemens to deliver a 750-megawatt (MW) power plant in the state. The state government said in a statement on Wednesday that the project would be deployed through ship-mounted turbines, with an 18-month timeline. The government stated that 40MW of electricity would be delivered in the next three months through a truck-mounted turbine as an emergency measure. In addition, the federal government (FG) has approved a transaction advisor for the Bakassi Deep Seaport project in the state. (Source: Punch)
Ikeja Electric, Mojec sign MoU for DT meters: Ikeja Electric Plc has signed a Memorandum of Understanding (MoU) with Mojec International Limited for the supply of distribution transformer meters. The acting chief executive officer, Anthony Youdeowei, Ikeja Electric, said at the signing ceremony of the MoU on Wednesday that energy accountability had been the bane of the nation’s energy sector. (Source: Punch)
FG proposes model to end estimated electricity billing in three years: The federal government (FG) has initiated a business model to end estimated billing for every electricity customer in the next three years. The proposed business model provides for the licensing of Meter Services Providers (MSP) by the Commission who would, on a competitive basis, provide for the financing, procurement, installation, maintenance and replacement of electronic prepaid meters for end-users of electricity. (Source: Guardian)
Axxela submits EIIJ feasibility study to NNPC: Axxela Limited, a Sub-Saharan Africa gas and power portfolio company, has completed and submitted a feasibility study to the Nigerian Gas Processing and Transportation Company (NGPTC), a subsidiary of the Nigerian National Petroleum Company (NNPC), to build a 510 kilometre ELPS-Ibadan-Ilorin-Jebba (EIIJ) pipeline network across the Western and Central states of Nigeria. (Source: Guardian)
NDDC, NEXIM Bank plan N2.5bn Export Development Fund: The Niger Delta Development Commission (NDDC) has assured that it will set up a N2.5bn (US$6.9m) export development fund in conjunction with the Nigerian Export-Import Bank (NEXIM). This was announced by the NDDC managing director, Nsima Ekere. (Source: Guardian)
Nigeria submits treaties ratification on copyright protection: As part of the country’s response to the challenges of copyright protection in emerging digital technology, Nigeria has deposited Instruments of Ratification of four Copyright Treaties at the 57th Assembly of member states of the World Intellectual Property Organisation (WIPO), Geneva, Switzerland. (Source: Thisday)