Connect with us
Advertisement
Oando
Advertisement
Alpha
Advertisement
Hotflex
Advertisement
Binance
Advertisement
Advertisement
UBA
Advertisement
Patricia
Advertisement
Access bank
Advertisement
app

Columnists

Untold story of how FG sunk N67 billion into NTA in 10 years

NTA has long become a shadow of itself despite huge investments from the federal government over the years.

Published

on

Untold story of how FG sunk N67 billion into NTA in 10 years

“I, Prince Jegede Shokoya, the son of the soil, and by the grace of God, the only young millionaire in the whole universe”

The above is a quote from the character Prince Jegede Shokoya (played by Claude Eke) addressing Chief Zebrudaya (Played by Chika Okpala). The occasion was “Apolina’s birthday, and the programme was New Masquerade, a popular sitcom which aired on NTA between the 80s and the early 90s.

READ: #EndSARS: NBC fines AIT, Channels and Arise TV over use of “unverifiable” footages

By the early nineties, the New Masquerade had become one of the major programmes pulling viewers to the channel, particularly because of ‘Zebrudaya, the character which had become famous for the interesting and peculiar use of the English language. Other family programmes like Tales by Moonlight, and Superstory were also popular among viewers, across different generations.

The Village Headmaster in the 80s was famous for its resounding gong which served as a summons to inform viewers that the soap opera was about to commence.

READ: StarTimes/NTA venture yielded no profit in 11 years – DG, NTA

Though characterised by the occasional blue screen and the fluctuating frequencies that came with analogue transmission; these programmes pulled men away from the bars and lured children from the playground. Was this due to love for the channel and its productions, or due to an obvious lack of options?

However, those times are long gone and NTA has long become a shadow of itself despite huge investments from the federal government over the years. Once known for its classic and captivating content, NTA used to be the one-stop point for all family sitcoms, educational programmes and news updates, but this might have all been due to the dearth of competition at the time.

Hotflex

READ: NTA-StarTimes declares no N200 billion missing, says it is open to forensic audit

The beginning…

The Nigerian Television Authority came into being in May 1977 through Decree 24 of 1977 which had a retroactive effect from April 1976.  By the Decree, all existing regional television Stations established in the country between October 1959 and 1974 came under the umbrella of the NTA, which became the only body empowered to handle television broadcasting in the country.

Shortly after, in 1976, funding of the stations became the sole responsibility of the federal government, at about the same time broadcasting started its transition from white and black to coloured, and networking of news started via domestic satellite.

READ: CBN to integrate non-interest window in its loans to SMEs, households

From 12 stations in the 70s, NTA has now grown to about 100 stations spread across the country, with presence in every state capital and senatorial district; but how much growth has been achieved outside the number of stations?

Subsequent amendments since then have moved NTA from being a public service and non-profit activity funded by the government to a Public Service partly funded by Government and partially commercialized to operate in line with the public service guidelines, the broadcasting code and civil service structure.

READ: Nigerians spend $14 billion on generators, fuel

Jaiz bank

Did this change make the structure better, or did it only introduce confusion into the system?

Even though its vision as stated on its website reads; “To be a world-class television network” and its mission “To provide excellent television service world-wide and project the true African perspective”, how much of its services can really be said to be excellent or of a global standard?

READ: Most privatized Nigerian companies are dying

News and programmes

One of the core mandates of the NTA right from inception is creating News and programmes for transmission as a public service. Programmes like The Village Headmaster, New Masquerade, Cock Crow at Dawn and the likes were transmitted in the 80s and early 90s.

Most of these programmes have evaporated over the years, some probably due to non-profitability, and others due to loss of some key characters, or in some cases, the competition took over the market.

READ: NNPC states why it failed to fix refineries, to build 200,000 capacity refinery

One time Ex-Director of programmes, Peter Igho said that the problem started with a single directive forbidding NTA staff from acting in the drama and entertainment programmes. Despites protests from the staff, the management at the time insisted that channels such as BBC did not have its staff participating in its drama or documentary programmes, and so any staff of the authority that wished to continue acting should resign his job and focus on acting.

“I protested against the directive for several reasons. It was cheaper and easier to use the staff for the production. Also, if a staff member is cast in the production, he knows he has to show up since his job is on the line, so they were generally easier to manage. Since the staff were not willing to resign for the singular purpose of acting, we had to rest programmes like Village Headmaster and several others,” Igho explained in the interview.

app

READ: Analysis: NNPC and its refining losses 

The stop of these programmes created a vacuum which was soon filled with Mexican and South American soap operas which were just becoming popular. Before long, NTA that was known for its original and exclusive local content became a home for foreign contents.

The few of such programmes still being aired on NTA, are also streamed on private channels and viewers definitely opt to go for where they can have a better viewing experience. Super Story, for instance, still airs on NTA, but is now also being streamed on WAP TV. Both channels are available on the StarTimes decoder for subscribers so viewing experience is the determining factor at the end of the day.

The reach

In 2010, NTA entered a partnership with Startimes, the graduation to Digital Broadcasting ahead of the 2015 global deadline given by the ITU. Courtesy of that partnership, NTA News 24, NTA Sports 24, NTA Knowledge, NTA Hausa, NTA Igbo, NTA Yoruba and NTA Entertainment are hosted at no cost on the NTA/Startimes bouquets.

But how is the wider reach improving content quality?

According to GeoPoll an international media research institution, as at June 2014, NTA which was the largest and oldest stations in Nigeria, had the most viewers with a total of over 3.355 billion views over the course of the month, well ahead of AfricaMagic, AIT, SuperSports and Channels Television.

However, by Q1 2017, Channels TV had taken over the position while NTA was nowhere to be found on the chart. AIT was second on the chart, followed closely by Silverbird Television, CNN, Galaxy, TVC, Africa Magic Yoruba, and three other channels. Note that most of these terrestrial stations are being viewed through paid subscriptions.

From 2017, the viewership has dwindled even further as other private stations move further up the chart.

How much has been invested over the past decade?

The usual thinking is that funding could be a challenge responsible for the uncompetitive nature of the channel. However, with documents available from the Budget office show in the last 10 years (2020 excluded), the federal government has invested a total of N67 billion, with about N58 billion going into personnel costs, N4.5 billion going into capital projects, N4.4 billion into overhead costs.

The 2020 approved budget reveals that NTA is to receive N6.6 billion allocation from the federal government for the year, with personnel costs taking a whopping N6.1 billion, capital project to get N303.8 million, while overhead costs would gulp about N195 million.

This is nothing compared to the N564.68 million which DAAR communications invested in the acquisition of assets, plant and equipment for its stations in 2018, N564.34 million in 2019 and N223.01 million in H1 2020.

And even more money…

Just in February, the Federal Government requested to borrow the sum of N1.92 trillion, out of which N181.5 billion ($500 Million) was proposed to digitize NTA.

The loan, according to Minister of Information and Culture Lai Mohammed, will enable NTA compete with the likes of Cable News Network (CNN), as it would be deployed to “establish the media and culture industry centre, digitize all NTA stations, and at the same time construct integrated television services to infuse on network, which is the signal distributor and essential component of the digitization project”.

In addition, it would also help Nigeria meet the digitisation deadline of June 17, 2020, as given by the International Telecommunication Union (ITU), after several shifts in dates.

Recall that when the International Telecommunications Union (ITU) commemorated the switchover from analog to digital terrestrial television broadcasting in June 2015, then Director-General of NTA, Mr Sola Omole, requested a sum of $15 million (N5.5 billion) to complete its digitization programme and another N6 billion for total restructuring across Nigeria.

In September 2016, President Muhammadu Buhari approved the release of 10 Billion Naira to the National Broadcasting Commission (NBC) for the Digital Switch-Over, and this sum was used to carry out the Digital Switch-Over in Abuja alone.

But somehow, these monies have not made the desired impact in the output.

Almost three years ago, Senator Ben Murray Bruce, who also happens to be a former Director-General of NTA, expressed concerns over the ‘over-bloated nature of the budget’ of some government agencies and ministries including National Orientation Agency (NOA), Federal Radio Corporation of Nigeria (FRCN), Nigeria Television Authority (NTA), and Voice of Nigeria (VON).

According to him, these agencies had become a burden to the government and are better off sold to the staff.

“If you look at the budget, you will see some agencies, they get recurrent expenditure, they pay salaries, they get houses, computers, cars but they have no money to do any work. No money to do any work, we pay salaries. Some agencies are so bloated it defies logic but these agencies exist. Let us look at agencies that make no sense. FRCN sells it to the staff. FRCN has eight thousand workers sell it to them. Sell NTA to the staff, Voice of Nigeria, who listens to Voice of Nigeria? Sell it. If the staff wants to buy, let them buy it. Set up a cooperative like Awolowo did, sell it to them.

“They have no use right now. If we spend seventy-one percent on recurrent expenditure, we will never get out of this predicament we find ourselves,” he said.

In response to his stand, there were insinuations that the Senator, who became popular with his common-sense propositions, was a part of the problem NTA has had in the past.

Popular Twitter verified user, Kayode Ogundamisi had said in a series of tweets that the, “N8 billion refurbishment of equipment” carried out under Brice’s tenure could hardly justify the quality of the audio and visual output on the channel.

“Let’s start with N8 billion refurbishment of NTA equipment. As a former DG do you think what we get from NTA is worth what did you know?

“After you left NTA as a DG we witnessed ‘midas touch’ in Silverbird TV, Galleria, expensive Restructuring of Rhythm FM. I am particularly worried we could not get to the bottom of the N8 billion NTA refurbishment scandal. Please let’s revisit,” Ogundamisi tweeted further.

Bruce, however, responded to this accusation saying he founded Silverbird with a N20,000 loan from his father in 1980, an evidence that one needs not steal to prosper in Nigeria. He asked his accusers to provide evidence to back their allegations that he enriched himself from NTA coffers while he was DG, insisting that it was under his tenure that NTA moved from 6-hour daily broadcast to 24-hour daily broadcast.

Veteran broadcaster, Mr Oyinlola Ademola joins voice with Bruce in his suggestion that NTA be disbanded. In a phone interview, Ademola said the enabling law setting up NTA set it up as a monopoly and not to compete with other stations.

“NTA was set up to propagate the programmes and policies of the government of Nigeria. They cannot function outside this. They cannot do critical reporting of stories especially when it goes against the government of the day,” he averred.

Ademola, who worked with the NTA for about a decade before resigning some 30 years ago to go into the private sector media, recalls that the station has good talents but they are mostly constrained from performing the ‘watchdog’ role of the media due to the ownership factor.

Could NTA be having a problem of human capacity?

Another possibility is that the quality of NTA’s output is a reflection of its staff quality. However, this is not a position that many agree with. Being over four decades old, NTA has produced several veterans who are making impacts across other stations.

John Momoh, before founding Channels Television, worked as a news anchor, senior reporter and senior producer for Federal Radio Corporation of Nigeria (FRCN) and the Nigerian Television Authority (NTA). Several other journalists from NTA have left over the years and are heading privately owned channels in different capacities.

About capacity, Ademola said; “Staff of NTA barely had enough room to practice professional journalism, in fact there are several story ideas you see your contemporaries in private media doing, but you dared not suggest it at the editorial board meeting.

“Even now, if I am given NTA to head on a platter, I will not take it because the structure will not allow one function professionally”.

He adds that unless the politics is separated from the business, NTA will not be able to compete with any of the private stations. The current structure is one that places professionals in charge as figurehead leaders, even though they still have to do the bidding of the political heads who have appointed them.

Since the channel depends solely on the government for funding, they cannot say certain truths about the government of the day, however obvious it may be. Critical news stories that unearth ills may also be overlooked, especially if the government of the day is fingered in any of such findings. For instance, even when other media tried to report the wrongs of the Abacha-led administration, NTA continued to report the government in a positive light.

Findings in recent years have now shown how biased those reports were, as the present government has repatriated billions of naira allegedly siphoned by the Abacha administration.

Why is no one watching NTA?

At the helm is the Director General (CEO) and his EDs, as well as the seven-member board headed by a part-time Chairman, all directly or indirectly appointed by the government.

On the other hand, most of the NTA’s competitors are privately run, and this means that they are very conscious of the competition and do everything to stay ahead of the game. NTA on its part relies on the government for yearly budget allocations and are not as profit-driven.

A survey conducted to know some reasons why Nigerians do not like watching NTA, fingered the lack of transparency as a key factor. Nigerians know for a fact that watching NTA means that they will only be hearing what the government wants them to hear as the piper cannot play against the dictates of its paymaster.

In a phone chat, Augustine Atabor, 37 years old says while growing up, “NTA was all we had so we had to watch it even though we knew that their reports could not be objective”. However, the deregulation of the broadcast industry has brought independent and privately-owned media players into the space which viewers have come to prefer, because they know they can expect a more objective report.

“The feeling for me is that the government has not earned my trust so I don’t watch their news channels because I know they will not tell the truth,” he said.

At a time like this when people watch television channels on a paid-subscription basis, it is very unlikely that people would want to spend money and time watching reports that only project the government in a good light, even when the reality says otherwise.

Bok, another respondent in her 40s says she has long stopped watching the channel due to poor content, poor quality, and seeing the same faces. Cyril Stober, for instance, had spent over 30 years as a broadcaster on the station anchoring the news at 9 pm on NTA network and NTA prime time news. Even after retiring in 2019, she noted, he still anchors regular NTA network programmes, an indication that they either lack new hands or simply choose to recycle the same old hands. The video and audio quality of their productions is also way behind the times.

“Times are changing, and people want to watch something different,” she explained.

An NTA staff who preferred to be unnamed stated that it will be practically impossible to separate government influence on the reports and programmes, in any government-owned media in the world.

“Irrespective of the person heading the authority at any time, there is already a tradition in place and nothing perceived to be anti-government can even make it past the newsroom,” she explained.

British public service broadcaster,  British Broadcasting Corporation (BBC) despite being owned by the government, still produces standard content, with the audio and visual quality matching that of CNN and any other privately-owned media. How balanced their reports are, however, is totally a matter of perspective as there are still hundreds of reviews online suggesting that the station is biased and unbalanced in its reportage.

Final BBC market impact assessment conducted and published by Oliver & Ohlbaum Associates Ltd and Oxera Consulting LLP in February 2016, showed how a shift in BBC’s mainstream services could impact the commercial market and net market impact. According to the report, a change in the positioning of the BBC’s popular music and news/sport radio services to emphasise music, hard news and lower profile audience, could reduce BBC’s share of measured radio audiences to below 50 per cent, while at the same time having a positive net market impact and increasing commercial ad-funded income by £22m to £38m annually.

Similarly, the report estimated that a shift from softer news stories towards more in-depth analysis and explanation would both increase news page views and increase commercial revenue anywhere between £3.2 million to £8.2 million annually

“A more differentiated BBC strategy could also bolster pay income across TV and online news and information and possibly music and speech audio on-demand,” the report read.

TV ratings carried out during the lockdown shows that several channels under the South African Broadcasting Corporation (SABC), gathered viewers in excess of 4 million both in news, presidential address and other entertainment content.

While nothing is said about balance or objectivity in its content, it is clear that the viewers enjoyed something about the channels and programmes, hence the spike in viewing.

The South African Broadcasting Corporation [SOC] Ltd (SABC) Corporation plan 2020-23 shows that, just like every other public broadcaster, is facing challenges in its service delivery. The ubiquity of OTT platforms that allow people access content when, where and how they want has made the competition even tougher.

Despite the presence of the OTT options, about 96 percent of South Africans still watch television with adults watching about four hours of television daily, while people under 34 watch about three and half hours of television daily.

The implication of the growing multichannel and multi-content options is that viewers no longer have the patience for repeat broadcasts which seem to be characteristic with public broadcasters, hence SABC’s declining share of television ratings.

In spite of these, a survey conducted on viewers of NTA Calabar and NTA Benin city shows minimal complaints about the quality of content output and quality.

The lack of competitiveness and innovation are also other issues raised which NTA seems far from addressing. Shuaibu Augustine, another respondent in the FCT Abuja, says that he found better and more reliable sources of current news and programmes.

Till date, viewers could tune in to NTA and experience poor audio quality (echoing voices or no sound at all), and it could go on for long minutes without any correction.

The video quality, a reflection of the camera and video equipment used cannot compare with rival channels, even though it is better than the heydays. This, according to Ademola, is a reflection of the government factor where contracts are awarded to friends of the government without close monitoring.

In a recent tweet, Jason Njoku, founder of IrokoTV stated after watching NTA for the first time in years, that the station is in need of a bailout. “Nigerians, NTA needs us. She needs a bailout. These graphics look bad in 1970,” he stressed, volunteering N500,000 for a rebranding of the station and its graphics.

In an era where viewers have hundreds of alternatives to tune into, with some of them being free-to-air, this is definitely a terrible oversight showing a lack of professionalism or absence of any monitoring body.

The National Broadcasting Commission is a parastatal established to regulate and control the broadcast industry by ensuring ethical compliance. This is carried out through occasional sanctions and fines. Interestingly, there is no record of NTA being sanctioned by this body. Almost every other channel has at some point or the other been penalised or at least received a letter of warning over some misconduct or the other.

Efforts to reach the Director-General, NTA, Yakubu Muhammed, for reactions to the allegations above and plans to rebrand the network were abortive. Enquiries made were not responded to.

Could it be that in spite of all its shortcomings, NTA is playing by the industry standards, or playing by government rules? Perhaps, it is time someone called the attention of the NBC to more important tasks like fixing the loops in NTA, and giving Nigerians a national channel worth watching, rather than the recent witch-hunting activities the commission favours against the likes of Rok, DSTV, NETFLIX and other platforms that are actually providing premium and quality content.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Columnists

Tasks before the AfCFTA dispute settlement body

The success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement.

Published

on

The Dispute Settlement Body (DSB) of the African Continental Free Trade Area (AfCFTA) held its inaugural meeting on 26 April 2021 at the AfCFTA Secretariat in Accra Ghana. The DSB is composed of the representatives of the State Parties and shall have the power to establish Dispute Settlement Panels and an Appellate Body responsible for settlement of disputes between the member States.

The mandate of the DSB also extends to adopting the reports of the Panels and Appeal Body as well as monitoring and ensuring the implementation of the ensuing decisions. In carrying out its mandates, the DSB will work with the AfCFTA Secretariat while maintaining its independence in the area of dispute settlement.

The inaugural meeting signals the readiness of the AfCFTA dispute settlement infrastructure to take up any disputes that may arise in the course of trading amongst the member States. Disputes are inevitable in any free trade area and when any such disputes arise under the AfCFTA, the resolution is to be in line with the Protocol on Rules and Procedures on the Settlement of Disputes which forms part of Phase I Negotiation.

Recognizing its importance to the success of the trade deal itself, the Protocol proclaims that “the dispute settlement mechanism of the AfCFTA is a central element in providing security and predictability of the system” and “shall preserve the rights and obligations of State Parties under the Agreement and clarify the existing provisions of the Agreement in accordance with customary rules of interpretation of public international law.”

Though inspired by the World Trade Organization (WTO)’s dispute settlement architecture, the AfCFTA framework is meant to address some of the lapses in the WTO. In an exclusive opinion piece for “The Africa Report”, Mr Wamkele Mene, Secretary-General of the AfCFTA, explained how the AfCFTA will work in order to avoid the pitfalls of other trading blocs. As noted in the report:

The WTO’s tribunal of final instance for global trade disputes, the Appellate Body, has been reduced to irrelevance over disagreements on its composition. The paralysis of both the WTO’s negotiating and dispute settlement arms means that trade disputes between China and the United States, two of the WTO’s largest members, have flared into open hostility.”

Drawing from the WTO experience, the African States in negotiating the free trade treaty cherry-picked the aspects of the WTO’s dispute settlement system that have worked and jettisoned the problematic parts.

At the Virtual Press Conference held on 04 May 2021 to update the public on the status of the implementation of the AfCFTA and the progress made so far, the AfCFTA Secretary-General re-echoed the importance of the dispute settlement mechanism to the success of the AfCFTA while answering questions from journalists across Africa. Commenting on the milestone achievement recorded with the inaugural meeting of the DSB, he noted that:

Hotflex

“The dispute settlement is really the mechanism and is at the heart of the African Continental Free Trade Area. And it is at the heart of what we mean by a rule-based trading system. And at the heart of what we mean by market certainty and predictability. For the first time on the African continent, there is a dispute settlement body that will have oversight over all the disputes that arise under the agreement whether there are investments related, trade in goods, trade in services, market access related disputes. This body will have oversight over all of that.”

All eyes are now on the AfCFTA DSB as it shoulders the task of ensuring that disputes between member States are resolved in an efficient, transparent, fair and impartial manner. The starting point is to ensure that persons appointed to be members of the Dispute Settlement Panels and Appellate Body have the expertise and experience in the subject matter of the dispute and are chosen strictly on the basis of objectivity.

There is an even more important corresponding duty on the State Parties when nominating persons to be included on the indicative list or roster of individuals to serve as Panelists to ensure that nomination is based on merit and proven expertise on the subject matter. The member States should eschew any nepotistic or tribal considerations in nominating State representatives. The Nigerian government should resist the temptation to premise its nominations on Federal Character or other ethnic or religious considerations as we’ve seen in recent appointments.

Recent events such as the reported discriminatory measures against Nigerian traders in Ghana, the closure of the Nigerian border with Benin Republic, the Xenophobic attacks in South Africa on African businesses and the retaliatory attack on South African-owned businesses present examples of the kind of disputes that may come up before the AfCFTA DSB assuming that similar issues arise in the future. Others may include disputes over conflicting public policies, tariffs and non-tariff barriers, rules of origin, dumping, regulatory excessiveness, standardization, trans-shipment, taxation, market access, and consumer protection etc.

The AfCFTA dispute settlement mechanism is restricted to State-to-State disputes. The treaty is silent on the mechanism for the resolution of disputes between private individuals. Notwithstanding this limitation, the private sector participants such as the SMEs and other business entities will be able to petition their governments to implement the rights and obligations set out in the agreement establishing the AfCFTA. That way, the rights of the private sector can be enforced using the State instrument.

For instance, in a situation where citizens of a member State are being subjected to discriminatory measures in another AfCFTA member country, the affected country may decide to refer the case to the DSB on behalf of its citizens, after exhausting the amicable settlement options such as Good Offices, Consultations, Conciliation and Mediation. It is not yet clear what yardstick will guide such referrals or to what extent such anti-free-trade measures will impact on the citizens of the member state before it decides to challenge the infractions at the DSB. Whatever the case, where a member state fails to protect the rights of its citizens, the affected traders may seek other legal remedies available under the national laws or within any bilateral and multilateral instruments applicable to the disputes.

In relation to investment disputes, the ongoing negotiation of the AfCFTA Protocol on Investment is meant to clarify the uncertainty around the framework for resolving investor-state disputes. The member states in choosing to resolve their disputes within the AfCFTA framework should be aware of the fork-in-road provision under article 3(4) of the Protocol, which precludes a State Party who has invoked the dispute settlement procedure under the Protocol with regards to a specific matter from invoking another forum for dispute settlement on the same matter.  Another area of interest is the enforcement of decisions reached under the AfCFTA dispute settlement process.

Jaiz bank

The effectiveness of a dispute resolution mechanism is often measured with the 3 E’s which are efficiency, expertise, and enforceability. Challenges will likely arise in relation to compliance with decisions under the AfCFTA as we have seen under the WTO and other regional trade treaties.  It is hoped that the desire to enhance investors’ confidence and the spirit of amity will spur the AfCFTA members to comply with decisions made by the dispute settlement bodies. In the end, the success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement and to eschew any form of self-help when they perceive any breach of the trade deal.

Continue Reading

Columnists

Insurance Recapitalization: The quest for efficiency

To tap into this, however, would require players to come up with innovative products.

Published

on

Recapitalisation: 26 firms get NAICOM's approval

As the phase II deadline for the recapitalization of the Nigerian Insurance Industry draws nearer, cracks are beginning to emerge from the wall. The most recent being the National Insurance Commission’s (NAICOM) revocation of UNIC Insurance Plc’s license with effect from the 25 March 2020. Consequently, the firm was handed over to a receiver/ liquidator to ensure a seamless liquidation process.

According to Mr. Sunday Thomas, the Insurance Commissioner, the company currently manifests every symptom of a business that would not survive the recent wave, and all efforts to resuscitate it are being frustrated by its owner.

Over the years, especially since the last recapitalization in 2007, the industry has been engulfed in a brawl between the laggards and the high-fliers. While the underperforming entities constantly have issues of delay in claims payment, which has created distrust for the general insurance proposition in Nigeria, the “high-fliers” have continued to battle that narrative through increasing levels of efficiency.

READ: Insurance companies to report over N100 billion in claims in 2020

NAICOM has also been coming up with policies to ensure seamless insurance delivery. Recall that in 2019, NAICOM instituted measures to ensure that players in the industry make prompt claims and benefits settlement a priority as part of its quest to restore the eroding public trust for Insurance in Nigeria.

Since the policy of recapitalization was proposed by the regulator, activities have intensified in the industry as players seek to meet the stated deadlines. For instance, we saw a flurry of bonus issuance of shares in December 2020, as firms sought to meet the Phase I deadline by converting retained earnings to paid-up capital as directed by NAICOM. This followed in the track of the series of takeovers that were announced in late 2019 and early 2020. We note that beyond improving underwriting capacity in the industry, the recapitalization exercise would eliminate operationally weak firms that have been a spanner in the wheel of the industry over time.

READ: Econet founder Strive Masiyiwa secures $100m investment in Nigeria data center

In our view, there is enormous potential for the players in the insurance industry in Nigeria given its untapped potentials as insurance penetration remains significantly low. To tap into this, however, would require players to come up with innovative products.

Hotflex

One of such innovative ideas in our view is developing products targeted at millennials and Gen Z, who are currently excluded from the insurance net in Nigeria; despite constituting a sizeable number of Nigeria’s population. Opportunities in the insurance industry are widely unexplored and a combination of favourable policies from NAICOM and efficient delivery by surviving players can help open more untapped areas.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

Continue Reading

  





Nairametrics | Company Earnings

Access our Live Feed portal for the latest company earnings as they drop.