Kenneth Udeh, Abuja
Vice Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions and Chief Whip of the 9th Senate, Senator Orji Uzor Kalu has tasked the nation’s financial and insurance institutions on service delivery.
Kalu, who co-chaired the Senate committee’s meetings led by Senator Uba Sani (Kaduna Central), held intensive interactive sessions with the country’s monetary, insurance and other related institutions which including the Nigerian Security Printing and Minting Company Limited (NSPMC), National Insurance Commission (NAICOM) , Asset Management Corporation of Nigeria (AMCON), Bank of Agriculture (BOA), Nigeria Deposit Insurance Corporation (NDIC), Nigerian Export-Import Bank (NEXIM), Central Bank of Nigeria (CBN) and the Development Bank of Nigeria (DBN).
A larger chunk of the interactions of the concerned institutions centred on briefing the Senate committee on their activities, challenges and responses on pertinent national issues bothering on economic growth , finance and insurance.
Kalu, in his remarks called for proper auditing of the institutions. He made the call as Abbas Umar Masanawa, Managing Director of the Nigerian Security Printing and Minting company (NSPMC) appeared before the Senate Committee.
The Abia North senator also charged the NSPMC to see itself not as a government parastatal but a company in order to align its business orientation towards diversification and profit making.
“You need to realise that you are a company not just a parastatal. You must therefore see yourself as a company with dual identity. The NSPMC must see itself as a full private company to in order to make improved profits. From what you have told us, we would like to know if you made profit last year? We are also interested in knowing if you were audited by KPMG, PWC, Deloite or any other reputable firm or you just assumed with your internal accountants that the N14.6 billion you informed us about is all profit?” Kalu inquired.
In his response, Abbas Umar told the committee that the NSPMC made a profit of N14.6 b in 2018 while its turnover grew from N17.8 b in 2014 and N61.4b in 2018.
The state of the nation’s airline industry came into discuss as Senator Kalu lamented the high cost of airline operation in the country; he expressed concern over the long list of agencies and their financial demands from airline operators.
He made this assertion during the briefing of the Managing Director of Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru before the Senate committee.
He said: “You can’t cut corners, because airline operation is denominated in dollars. If an aircraft for example is due for a ‘B’ check (aircraft maintenance) there is no other option than going for the check, whether the operator is making profit or not . When it comes to airline operation, it is difficult to maintain because various regulators come up with different requirements and all these requirements attract costs. The denomination of charges within the local airports is not commensurate with the pricing of the airline.
“The most important is the pricing; if you want to pay the right price the airline industry will boom but because you are not paying the right price everything is denominated in dollars.
“Years ago in this county, an airline had 14 aircraft on the ground there were 737/400 and someone woke up one morning and cancelled and withdrew the license of the airline just because one aircraft is purported to have committed an offence, this is why people are afraid of going into airline transportation business.
“The major problem,” Kalu continued “is the cost of operation and it is very high. There is NEMA, NCIA, FAAN, etc and all these agencies demand money from the operators. So, how would they survive? It’s not going to be possible and it’s not going to be easy. We cannot operate that way. Every six weeks, an airline operator is mandated to check the aircraft for maintenance and they must pay because they can’t play with people’s lives and the captain is a human being too. If the aircraft is in bad condition, they will refuse to fly, including the co-pilot and attendants.
So the major problem of the industry is cost and not even the operators.
“An airline like Air Peace is not finding it easy to manage its business. Another major issue is the transparency among the entire industry, there is no transparency.”
Kuru in his response said the National Assembly must reform the aviation sector by reducing the different layers of charges by different agencies, which makes it extremely difficult for airlines to survive in the country.
He pointed out that Arik Airline had enough aircraft and facilities that can be used to set up a new airline.
The insurance sector was not left out as the chief whip questioned the efforts of the National Insurance Commission (NAICOM), at regulating and sanctioning insurance companies that renegade in paying it’s holders involved in accidents and other unfortunate incidents.
Kalu said: “People that engage in insurance of vehicles, houses and so on don’t get compensated by some of these big insurance companies when they have damages. How are you as a regulatory body, protecting the concern of these people? I have seen people who after they had accidents the insurance companies were not able to do anything. They were totally jettisoned despite the fact that they paid premiums. When you have an insurance, and you are involved in fire or water accidents or otherwise, they are not interested in coming to your aid. People end up paying premium without getting anything during unfortunate incidents. How is your organisation protecting the over 200 million Nigerians most of who after using their hard-earned money in paying premiums get nothing when they have problems?”
Acting Managing Director of NAICOM Mr Thomas Sunday, who had appeared before the Senate committee, spoke of the challenges faced by the insurance regulator, saying that limited powers in existing laws were responsible for “arm twisting” the commission from carrying out its enforcement and distress management duties of defaulting insurance companies.
He appealed to the 9th Assembly through the committee to pass a pending insurance executive bill into law in order to support the performance of the industry.
Godwin Emiefile, governor of the nation’s apex monetary institution was not left out of the report rendering session as Dr. Kalu commended the economic intervention efforts of the Central Bank of Nigeria (CBN) boss. Senator Kalu urged Emefiele not to relent in fine tuning and introducing policies aimed at boosting the nation’s economy.
Earlier in his opening remark Emefiele described the 9th Senate as partners in progress, in what he described as a shared and joined responsibility to work together towards the development of the banking and insurance system in Nigeria.
He said: “We are very clear in saying that we are partners in progress – partners in the sense that we have the shared and joint responsibility to work together towards the development of the banking and insurance system in Nigeria and indeed the financial system in Nigeria.”
Other directors who presented themselves before the Senate committee included
Kabiru Mohammed, Managing Director Bank of Agriculture (BOA); Umaru Ibrahim, Nigeria Deposit Insurance Corporation (NDIC); Abba Bello, Managing Director Nigerian Export-Import Bank (NEXIM); Adekunle AbdulRazaq Oyinloye, Managing Director The Infrastructure Bank PLC and Tony Okpanachi, Development Bank of Nigeria (DBN).
Also present at the meeting were other members of the committee which include Senators Betty Apiafi (Rivers West), Muhammad Adamu Aliero (Kebbi Central) , Oyelola Yisa Ashiru (Kwara South), Onyewuchi Francis Ezenwa (Imo East) , Opeyemi Bamidele (Ekiti Central ) and others.