E-Financial
IFC, Africa Re Partnership Boosts Insurer’s Capacity to Underwrite Agribusiness
Insurance Companies in Nigeria and Africa have acquired capacity to underwrite agribusiness towards the support for food security in the continent following a partnership deal between Africa Reinsurance Corporation and IFC, a member of World Bank Group, DMD/COO Africa Re, Ken Aghoghovbia has said.
In a statement, he added, “In order to address the challenges depriving African insurance from investing in agric space, the IFC’s Global Index Insurance Facility (GIIF) set up an experience account whereby the loss ratios of the net account for local risk carriers would be capped at 75 per cent and the excess loss amounts transferred to the Global Index Insurance experience account, with Africa Re as the fund administrator.”
Aghoghovbia said IFC/GIIF fund, which Africa Re manages on behalf of the agriculture industry stakeholders aligns well with its mission statement of fostering the development of insurance and reinsurance industry in Africa.
The Global Index Insurance Facility (GIIF) is a multi-donor program managed by the World Bank Group created to address the scarcity of affordable insurance protection against weather and catastrophic risks in emerging countries.
GIIF is supported by the European Commission, the African, Caribbean and Pacific (ACP) Group of States, the Netherlands Ministry of Foreign Affairs, the German Federal Ministry of Economic Cooperation and Development (BMZ), and the Japan Ministry of Finance
He said the pilot phase of the experience account was set up in 2017 for a 3-year period to end in December 2020, with $900,000 fund covering Nigeria and Zambia and, “was intended to support the development of weather and area yield index insurance programs in these countries.
“During the last 3 years, the experience account fund has been triggered twice with two risk carriers, Mayfair Insurance Company (Zambia) and AXA Mansard Plc (Nigeria) benefiting in 2019 from the fund following various flood losses that impacted their net account portfolios.
“While in 2020, the Nigeria market was again hit by flood losses that affected 8 local risk carriers on the CBN Area Yield Index Anchor Borrowers Program (Wet Season) for rice, maize and cotton crops.
The total market gross claim was N1.996 billion, approximately $5 million and the local insurers that covered the risk include Veritas Capital, Leadway Assurance, AIICO Insurance, AXA Mansard Insurance Plc and Royal Exchange Insurance Plc.”
“Africa Re on its own paid about $1.5 million to the lead insurer as their reinsurance share of the claim and has handed out a total of $827,000 to the local risk carriers from the IFC’s GIIF experience account fund.
This initiative would certainly go a long way in moving Nigeria towards its goal of food security in line with Africa-Re’s mission to support African economic development, Ken Aghoghovbia, DMD/COO, Africa Reinsurance Corporation said.
An intervention by Africa Reinsurance Corporation (Africa Re) and IFC, a member of the World Bank Group to support African insurers provide risk solution to small holder farmers is beginning to yield result in Nigeria, “Aghoghobvia said.
Nigeria Deposit Insurance Corporation (NDIC) has said that it has obtained Winding up Orders for 96 out of 183 microfinance and primary mortgage banks whose licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023.
Bello Hassa, managing director, NDIC, stated this at a sensitisation seminar for Judges of the Federal High Court in Lagos organised by the NDIC, to enlighten the judiciary on the intricacies of the banking industry.
Hassan said, “As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”
He added that the NDIC was committed to fulfilling its mandate of protecting depositors through bank supervision, failure resolution and liquidation so as to boost confidence in the financial system.
Speaking on the role that the judiciary plays in the fulfillment of the mandate, Hassan said, “We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”
Citing some of the achievements from previous editions of the seminar, Hassan said that instances where liquidation-related litigations experienced delays were reduced.
Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national 0.5 per cent cyber security levy after the policy was largely resisted.
The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, director, Financial Policy and Regulation, Department and Chibuzo Efobi, director, Payment System Management Department.
The apex bank confirmed the suspension in a circular issued on May 17, 2024 with reference number PSMD/DIR/PUB/LAB/017/005 addressed to commercial banks, mobile money operators, and other financial institutions.
In an earlier circular issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, the bank mandated financial institutions to charge a 0.5 per cent levy on all electronic transactions.
President Bola Tinubu last week ordered the suspension of the National Cybersecurity levy.
The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the Securities and Exchange Commission (SEC) guidance and collaboration in harmonising the peer-to-peer forex sector in the country.
At an official courtesy visit to the newly appointed SEC Director-General, Dr. Timi Agama, the President of Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, who congratulated the SEC D-G on his appointment, observed that SEC regulates the sector that continues to threaten the existence of BDCs in Nigeria through online virtual transactions platforms which give access to millions of Nigerians to trade in foreign exchange without trace and accountability.
He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and the preservation of the integrity of the sub-sector, stressing that the future of BDC’s business was digital currency. The ABCON boss said that the meeting with the SEC DG and his executive board was a follow up to an earlier online virtual consultation.
Gwadabe explained that ABCON, the umbrella body for all licensed retail foreign exchange dealers, was established in 1991 to liaise with regulators, relevant stakeholders and security agencies for a transparent retail end forex market.
Gwadabe said: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about nine percent with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual-to-individual transaction.
“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.
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