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MTEF 2023 – 2025: Contributory Pension Hit N14trn in 2022 – DG PENCOM

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By Gloria Ikibah

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The National Pension Commission (PENCOM) has said that the Contributory pension has hit N14.5 trillion.

The Director General of PENCOM, Aisha Dahiru-Umar, disclosed this during the interactive session on the 2021/2022 budget defence and presentation of the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the House Committee on Finance.

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She said: “By the provisions of the Establishment Act, all income earned from investment earned from the Retirement Savings Account are credited back to the RSA of the contributors. Nobody takes a single kobo from it. However, the Commission and the Pension operators are allowed to charge fees on the fund under management and that is what we survive on.

“For example, the total asset under management is now N14.5 trillion made up of three funds. One is the Retirement Savings Account Fund, the other is the Closed Pension Fund Asset and the Assets in Existing Scheme.

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“Out of the N14.5 trillion, the RSA fund is about N11 trillion, the CPFA has N1.5 trillion and the AES has about N1.4 trillion. These monies is in the account of contributors. It is not been kept by PENCOM, it is not been kept by the PFAs. It is not anywhere but the account of the contributors, just like the commercial banks.

“We charge fees as follows. PENCOM charges on the RSA fund 0.2 percent, while the PFAs charge 1.2 percent and the PSCs charge 0.25 percent. Those percentages are charged on a daily basis and then divided by 365 days because if you wait to do that the end of the year, it is going to be higher and the RSA account holders will be cheated.

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Dahiru-Umar further explained that the commission is mandated by the Pension Reforms Act to charge these fees to enable it generate enough revenue to meet its personnel and operational cost and also to rid the government of the burden of funding the commission.

“We also charge fine which we collect from the operators when they break certain rules. We use what we called a sanction regime to guide us on what they should pay when they break the rules. There are also one-off charges like licensing fees which N500,000. All these monies are paid into CBN account”, she added.

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However, the lawmakers queried the Commission’s accounts and demanded for details of total sum of N14.594 billion spent on personnel cost for 500 staff as well as N2.3 billion end of the year benefits, out of which the sum of N12.02 billion is for staff salary and N2.5 billion for other staff costs.

According to the document seen by Naijablitznews.com, the Commission’s personnel cost went from N12 billion in 2021, to N17 billion in 2022 and projected N21.5 billion in the 2023 budget proposal submitted to the Budget Office.

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The lawmakers who demanded for the Commission’s audited accounts also questioned the N1.715 billion on administrative expenses.

They expressed displeasure over the sum of N1.1 billion remitted out of the N4 billion operating surplus declared by the Commission, while the sum of N20.8 billion was generated in 2021.

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The committee accused the Commission of breaching extant financial regulations and the provisions of the 1999 Constitution (as amended), argued that as a fully funded agency, the Commission is under obligation to render its accounts to Accountant General of the Federation, Auditor General of the Federation as well as Fiscal Responsibility Commission in line with extant laws.

Speaking earlier, Dahiru-Umar disclosed that the Commission incurred expenditure worth N16.31 billion in 2021 and recorded N4.45 million as operating surplus.

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The Committee therefore issued a seven day ultimatum to the Commission to submit relevant documents for further legislative scrutiny, also directed Fiscal Responsibility to submit the report on the reconciliation with various ministries, Departments and Agencies within one week.

It all started when Hon. Aminu Suleiman alleged that each staff earns an average N2.4 million per annum.

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But the PENCOM Boss in a swift response to his submission, disagreed with the calculation of the lawmaker and stated that the item highlighted encompasses all allowances, including training.

“Personnel cost is not restricted to salaries, we have about 14 items here. The salaries, the allowances—both the training, allowances and others come under this. Nobody earns a million in PENCOM from the DG downward. Maybe we are doing it wrongly. However, we categorize everything as personnel cost,” she said.

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However, the 2021 Appropriation record revealed that from the total sum of N16.310 billion earmarked for personnel cost, the sum of N10.151 billion was for staff salaries, N1.980 billion was for other staff costs.

Also, out of a total sum of N5.481 billion earmarked for overhead cost, the sum of N235 million was spent on capacity building, N244.445 million spent on premises expenses, N501.175 million was for miscellaneous expenses, N1.678 billion was spent on Admin expenses, while the sum of N1.105 billion was spent on operational, monitoring and supervisory expenses.

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For the half year of 2022, the Commission has so far spent the sums of N507.157 million on capacity building, N189.070 million spent on premises expenses, N498.171 million out of N1.715 billion proposed as for Admin expenses; spent N240.926 million out of N499.143 million as miscellaneous expenses, while the sum of N1.961 billion spent so far on operational, monitoring and supervisory expenses, out of N2.157 billion captured in this year’s Appropriation Act.

Unsatisfied with her explanation, Hon. Suleiman said: “Everyone knows what constitutes personnel cost. This is a personal emolument to personnel. You cannot bring other components of your expenses here. I will ask that she supply the details of the per head of all the staff”.

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Speaking further Hon. Saidu Abdullahi who presided over the session, warned the Commission not to reflect some of the subheads captured in the 2022 Appropriation Act such as procurement of computers, furniture and software, among others.

Hon. Abdullahi who expressed worries over the inability of the country to generate adequate revenue to fund its budget over the years, stressed on the need to block leakages and reduce cost, and sighted that South Africa has been able to generate N40 trillion against Nigeria’s N6 trillion revenue, hence .

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Nigeria Air begins recruitment ahead of launch

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The Nigeria Air Limited has commenced the recruitment of qualified crew members for its operation that is expected to be launched shortly.

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The aviation ministry disclosed this in a memo posted on its official Twitter handle on Friday.

“Nigeria Air is now recruiting qualified crew for the following positions: Experienced, and current B737 Captains; Experienced, and Current B737 First Officers; Experienced, and Current B737 Senior Cabin Crew and Cabin Crew Experienced, and Current B737 Engineers (B1/B2 preferred),” the memo noted.

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It said the positions are based in Abuja or Lagos and that competitive salaries are offered.

The ministry said an application portal for other open positions will be available shortly on the website; www.nigeriaair.world.

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Qualified candidates are required to forward their Curriculum Vitae (CVs) to recruitment@nigeriaair.world

“However, due to the immediate recruitment requirements for the above operational positions only, we ask that CVs be sent to the following email address: recruitment@nigeriaair.world,” the memo read.

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It said, “Your application will be carefully assessed, and suitable candidates will be invited for an interview,”

“We will not reply to applications that do not meet the above criteria,” the memo noted.

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Nigeria Air is the nation’s proposed national carrier which was unveiled at the Farnborough Air Show in England on July 18, 2018.

The project was suspended two months after it was announced after critics raised concerns over its relevance and sustainability. The proposed airline was expected to gulp $8.8 million preliminary cost and $300 million as takeoff cost.

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Nigeria’s defunct carrier, Nigeria Airways, collapsed due to corruption and poor management.

But the Nigerian government dismissed all concerns raised, saying the airline would begin operation before the end of 2018, following President Muhammadu Buhari’s promise to establish a national airline during his 2015 electioneering campaign.

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The new airline will be owned by a private Nigerian consortium, Ethiopian Airlines and the federal government.

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Naira falls to N707/$1 at black market, as forex scarcity persists

Naira, CBN
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The Nigerian naira, on Wednesday, weakened to N707 a dollar at the parallel section of the foreign exchange market.

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The figure represents N42 or 7.45 per cent depreciation compared to the N658 it traded last week — further losing value against the dollar.

Street traders said the free fall resulted from the lingering foreign exchange (FX) supply constraints.

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With a profit margin of N17, the traders put the buying price at N690 and the selling price at N707.

This is even as the Central Bank of Nigeria (CBN) has often maintained that the parallel market is not the true reflection of the naira.

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The difficulties getting dollars from the official market, make the option of the black market an important source to access forex.

Meanwhile, at the official market, FMDQ securities reports that Naira closed Wednesday trading at N436.50 to a dollar reversing the 0.10 per cent gain recorded on Tuesday.

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The depreciation of the local currency comes as forex supply to the investors and importers window dropped to $65.95 million from $83.71million recorded on Monday.

The latest exchange rates imply that the disparity between the black and official markets now stands at N270.5.

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FG’s total debts, other liabilities to hit N60.9 trillion in 2023

Buhari
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By Francesca Iwambe
As the President Muhammadu Buhari-led government scrambles for available funds to survive the current financial squeeze before its expiration in May, next year, a new report has revealed that the government’s total debts and contingent liabilities have hit N60.9 trillion.
The report preempt that the figure is likely to rise to N65 trillion before the end of the year,
According to the report, the figure does not include undocumented contingent liabilities to university lecturers, public school teachers and other public employees to whom the government is indebted. It also excludes other pending financial liabilities to non-lending bilateral and multilateral institutions.
The Federal Government’s debt obligation stood at N35.7 trillion as of June. The amount does not include the Central Bank’s lingering overdrafts estimated at N20.6 trillion at the last count. Besides, the government’s “contingent liabilities” to different institutions and projects stood at N4.6 trillion at the close of last year. The figure is projected to reach N4.98 trillion at the end of the year and jump by as much as 50 per cent to N7.52 trillion next year when the current administration will leave office.
Items and organisations on the contingent liability list are Nigeria Mortgage Refinance Company Plc, Nigeria Ports Authority – Lekki Deep Seaport, pension arrears, NNPC – AKK Gas Pipeline Project among others.

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