The National Pension Commission (PenCom) is taking steps to raise pension bonds through the Debt Management Office (DMO) to offset the N400 billion pension arrears of federal retirees.
The acting Director-General, PenCom, Aisha Dahir-Umar said the commission had been engaging relevant authorities in order to ensure funding of the arrears accumulated through accrued rights.
According to PenCom, “Section 39 (2) of the Pension Reform Act 2014 mandates the Federal Government to pay into the Retirement Benefits Bond Redemption Fund Account an amount not less than five per cent of the total monthly wage bill payable to employees in the public service of the federation towards the redemption of the accrued pension right of FGN retirees.
“In the last five years, budgetary funding/releases had not been regular and adequate for the payment of outstanding accrued pension rights as a result of decline in government revenue,” a report by Punch disclosed.
To clear the debt, PenCom submitted a suggestion to the government to consider issuance of bond through the DMO instead of placing the burden on budget allocation.
According to a source in PenCom, who spoke on the delay of the pension arrears, “The commission had been in talks with the DMO on how to raise the pension bonds to clear the pension arrears.
“While the discussion is still ongoing, the Federal Government said some funds should be released over a period of time.
“But as the funds have not been released, we are still trying to see the possibility of raising the pension bonds to clear the backlog.”
FG’s attempt to stop payment delay: The Federal Government will release N62.83 billion to clear the backlog of accrued pension rights of retirees in the next three years through the Ministry of Finance, Budget and National Planning.
The Finance Minister, Zainab Ahmed has been directed to appropriate and release N12.83 billion, N25 billion and another N25 billion in the budgets of 2020, 2021 and 2022 respectively.
Also, the government had disclosed its intention to fast-track pension payment for workers who switched to the Contributory Pension Scheme (CPS) before retirement. So, the funds will be for retirees under CPS.
But there’s a problem: Many retirees can’t wait for that long. Most want the pension payment to be fast-tracked with immediate effect rather than wait for that long. Though the 2020 budget has been approved, the funds haven’t been disbursed by the government.
Some of the retirees are reportedly scared that when payment begins, they probably wouldn’t be alive to enjoy the reward of their efforts during service to the government. The space within the period of payment worries them, and the inflation, as well as proposed VAT increase, which is expected to increase the cost of living, isn’t helping the situation most of them are said to be.
Should PenCom invoke its right? With retirees complaining of the delay in pension payment and the government not swiftly clearing the debt owed to them, PenCom could go over the government’s head to invoke its right to ensure payment.
The Pension Reform Act 2014 gives statutory power to PenCom to direct the Accountant General of the Federation to deduct at source unpaid accrued pension rights. But the commission might not due to political constraints; note that the power has never been exercised for this reason.
How to access CBN’s healthcare grant
The disbursement under the Scheme shall be made to beneficiaries in tranches subject to approved milestones achieved.
The Central Bank of Nigeria (CBN) has issued the guidelines to its Healthcare Sector Research and Development Intervention Scheme (HSRDIS).
The grant was designed to help strengthen the public healthcare system with innovative financing of research and development (R&D) in new and improved drugs, vaccines and diagnostics of infectious diseases in Nigeria.
This was disclosed by CBN via its site in Saturday and seen by Nairametrics. The guideline stated that the HSRDIS is designed to trigger intense national R&D activities to develop a Nigerian vaccine, drugs and herbal medicines against the spread of COVID-19.
CBN Releases it’s Healthcare Research and Development Grant Guidelines to help strengthen the public healthcare system. See website…ow.ly/SLxc50A0Njo
— Central Bank of Nigeria (@cenbank) June 6, 2020
It stated, “It would also curb any other communicable or non-communicable diseases through the provision of grants to biotechnological and pharmaceutical companies, institutions, researchers, and research institutes.
The Scheme is intended to boost domestic manufacturing of critical drugs and vaccines to ensure their sustainable domestic supply and reduce the bulk manufacturing costs of the drugs, herbal medicines and vaccines in Nigeria.
Source of fund
According to the apex bank, the Scheme shall be funded from the Developmental Component of the Micro, Small and Medium Enterprise Development Fund (MSMEDF).
While Research activities would not access more than N50 million, development/Manufacturing activities will access more than N500.0 million.
CBN emphasised that the disbursement under the Scheme shall be made to beneficiaries in tranches subject to approved milestones achieved.
Timeframe given to research activities was not more than two years from the date of release of fund and Development/Manufacturing activities are not more than one (1) year from the date of release of fund.
Who is eligible:
Candidate vaccines undergoing pre-clinical testing or trials shall not be
eligible for consideration under this Scheme.
But candidate vaccines undergoing clinical testing or trials shall be eligible for consideration under the Scheme if considered to have high potential to cross the clinical trial stage and prospects of scale by the Body of Experts (BoE).
It stated, “In applying for the grant, the applicant shall be required to have conducted pre-clinical testing of the candidate drugs, herbal medicines and vaccines, and obtained certification from relevant health authorities for further research and development.
“Special consideration shall be given to candidate drugs, herbal medicines and
vaccines with high scientific merit against emerging infections and contribute to the development of the Nigerian vaccine.”
The applicant(s) shall submit its application, with relevant documentation of validation from relevant health authorities, trial results, patent registration details (if any) and development timetable to the Body of Experts (BoE).
“The BoE shall evaluate applications and recommend to the CBN. CBN shall review for documentation adequacy and completeness.
“Upon approval, the approved grant sum shall be released to the applicant’s
account with any PFI of his/her choice. The beneficiary shall submit periodic progress report on the project to the CBN.
“The CBN shall have proprietary right over all financed R&D outcomes or
products. Equally, licensing protocol for the mass manufacturing of developed
drugs, phytomedicines and vaccines shall be defined by the BoE in accordance with
the World Health Organisation’s current Good Manufacturing Practices (cGMP),” it added.
Possibilities of a second wave of COVID-19 infections Limits U.S dollar gains
American dollar ended the week cumulatively lower as the possibilities of the second wave of COVID-19 pandemic limited its upside.
The American dollar index closed on Friday up at 0.18% to 96.93.
However American dollar ended the week cumulatively lower, for a third straight week, as uncertainty about America’s economy limited its upside.
The uncertainties about the economic outlook and the possibilities of a second wave of COVID-19 infections had capped the greenback’s gains, Chuck Tomes, portfolio manager at Manulife Asset Management said in an interview with CNBC.
What is the importance of the dollar index? The American Dollar Index tracks the U.S dollar strength relatively against a bouquet of other major currencies around the world, such as (Japanese yen, Euro, British pounds sterling, Swedish krona, Canadian dollar, Swiss Franc).
Nigerians hoping to meet foreign exchange debt or payment obligations, transactions via the U.S dollar to countries like France, United Kingdom, Australia, Germany Japan, would have the need to pay fewer dollars to fulfill such transactions.
“Today you’ve seen better-than-expected economic data coming out of the U.S. in terms of the jobs numbers.
“The reaction on the back of that has been expectations of better growth coming out of the U.S. as well as a steepening yield curve, both of which have provided a lift to the dollar.” Chuck Tomes added.
However, some currency analysts in a report to CNBC said the good macroeconomic gains recorded on Friday in America might not be repeated soon.
“While this was no doubt a great jobs report, a lot of good news was already priced in. Future estimates and expectations on the economic rebound are likely higher from here and therefore harder to meet or beat,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management.
NPA to receive shiploads of petroleum products and food items in Lagos port
Among the expected items to be received are frozen fish, base oil, general cargo, bulk salt, bulk clinker, butane gas, bulk wheat and soya beans.
The Nigerian Ports Authority (NPA) will receive 16 ships laden with petroleum products, food items and other goods over the next 14 days.
According to its publication, `Shipping Position,’ which was released on Saturday, the receipts of the shipment will last from June 6 through June 20.
According to the publication viewed by NAN, the ships are expected to arrive at the Lagos Port Complex.
The NPA also noted in its publication that 23 ships had arrived the ports, waiting to berth with containers, general cargo and petrol, while 17 other ships were at the ports discharging containers, petrol, butane, bulk fertilizer, bulk wheat, general cargo and frozen fish.
What you should know
When the World Health Organisation declared COVID-19 a pandemic, and several industries started shutting down, the Nigerian government took the decision to leave Nigerian ports operation in line with stipulated guidelines.
This was done to prevent further contraction in the economy, as the economic implications of shutting down the seaports in an import-dependent economy were considered unsavory.
The government decided that, just like the food and healthcare sectors, the ports were to be considered essential too since there was a need to keep a steady import of foods, refined petroleum products, raw materials for the local industries, finished consumer goods and most importantly, drugs for the healthcare system.
Managing Director of the NPA, Hadiza Bala-Usman, also suspended applicable terminal storage fees on consignments for an initial period of 21 days effective 23 March, and agreed to fast-track the clearance of over 1,500 overtime cargoes as part of its efforts to promote ease of business.