From Basil Obasi, Abuja
The Minister of Finance, Mrs Kemi Adeosun, Monday lamented the under-performance of the nation’s insurance sector was denying government an annual 1.5 per cent Gross Domestic Product (GDP) growth.
The Minister made the disclosure at the 2016 National Insurance Conference (NIC) with the theme “Expanding National Resources and Infrastructure in Challenging Times”, which kicked off in Abuja, said the persistent under-performance of the sector was revealed during the 2014 Insurance Summit.
Adeosun noted the need to immediately address the issues responsible for the under-performance “because a 0. 33 per cent increase in insurance penetration can result to a growth of 0.5 per cent in GDP and create over 70,000 jobs annually.”
She argued that the industry was under-performing, compared to its pension and banking counterparts, having identified low awareness as one of the factors responsible for this poor-run, even as she pointed out that out of 57 insurance companies in the country, less than 23 advertise their products.
“The companies put in less than 20 adverts on television, less than 10 adverts on radio and less than 10 adverts on social media. Other factors include poor distribution channels and unethical practices among operators. I’m working vigorously with the National Insurance Commission (NAICOM) to ensure that premium discounting is eliminated among practitioners,” she stated.
The Minister also said there was need for recapitalisation of most insurance companies, pointing out that “The first top three banks have over N300 billion capital base each, while the top three insurance companies’ capital base is between N14 billion and N25 billion each.”
The Commissioner for Insurance, Alhaji Mohammed Kari, commended the Insurance Industry Consultative Council for organising the conference to reposition the industry.
He pledged NAICOM’s commitment to making the industry the next growth area for economic development.
New Customs duty: Shippers threaten to abandon goods at port
The Shippers Association Lagos State Chapter has wained that importers and exporters may abandon goods at the ports following the increase in Customs duty exchange rate.
The President of the association, Mr Jonathan Nicol, who stated this in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos said that the exchange rate was moved up from from N197 to N282 to a dollar, adding that this new Customs duty exchange regime has become another “scourge’’ to shippers.
According to him, it is the exchange rate on the contract document “the Form M’’, that should be used in payment of Customs duties.
“Any distortion of that figure, obviously, will add to the clearing costs and the market prices of goods.
“Importers are then made to source additional funds to meet the costs of clearance. When the costs of clearing goods go up, they will be passed to the final consumers.
“This in itself is a big challenge to the shipper. Goods caught in this regime will be grossly affected.
“Some (goods) will be abandoned in the ports for lack of funds,’’ Nicol told NAN.
The shippers further explained that this would increase the cost of doing business in Nigeria.
He said, “The Nigeria Customs Service (NCS) is handicapped due to the envisaged revenue target they must generate for government.’’
Nicol added that the situation could destroy import businesses expected in Nigeria.
“When you add the new terminal charges just increased by the operators, they are killing the “hen that lays the Golden Egg’’.
The shippers also expressed the concern that inflation in the country would increase.
“The shipper will add all his costs and roll out new tariffs on his goods to break even,’’ Nicol said.
He suggested that such action (tariffs) should be done piecemeal adding that the new duty exchange rate from N197 to N282 is astronomic.
“We envisage that more goods would be sent to ports in neighbouring countries where they have almost stable cost regimes. Smuggling will also increase,’’the shipper said.
NAN reports that the National Association of Government Approved Freight Forwarders (NAGAFF) on Friday described as hasty the recent 43 per cent hike in import duty by the NCS.
Speaking through its Publicity Secretary, Mr Stanley Ezenga, NAGAFF said that the increase in import duties would increase the cost of doing business as well as prices of imported goods.
The NCS, had through a circular issued to all Zonal Coordinators and Area Controllerson July 1, directed that all commands should be charging duties based on the new forex regime.