By Rukayat Adeyemi
Lagos, Feb. 12, 2021 Mr Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria, says the government needs to do more in creating an enabling environment for insurance penetration in the country.
He spoke with Naija247news in Lagos on Friday, against the backdrop of the poor penetration of insurance in the country.
Naija247news reports that insurance penetration is measured as a percentage of premiums to Gross Domestic Product (GDP).
A report by PwC estimated insurance penetration in Nigeria to be about 0.7 per cent.
Okezie said that both the government and operators in the insurance sectors had roles to play in deepening insurance penetration in the country.
The operationability of the fund is anchored on the 2020 Finance Act (Amendment) Bill signed on December 31, 2020, by President Muhammadu Buhari which provides that the Debt Management Office (DMO) shall supervise the operations of the fund.
The act, which has the commencement date of January 1, 2021, introduced significant changes to some tax and regulatory laws in Nigeria, including the introduction of COVID-19 incentives, alongside other changes.
The Finance Act 2020 Part XV, states that: “Subject to Section 44 (1) (h) of the Constitution of the Federal Republic of Nigeria, 1999, there is established by the trust, as a sub-fund of the Crisis Intervention Fund, an unclaimed Funds Trust Fund.”
“There would be as much as N850 billion. We have to get the exact report from the CBN and then Company’s Registrar to ascertain that so it could be realised into this special trust fund for unclaimed dividends and dormant accounts,” she said.
The loan, the government said, would be used to fund the 2021 budget.
Policy Will Dampen Investors’ Confidence – Analyst
However, some industry watchers say the policy will dampen investors’ confidence and create uncertainty in the sector.
A onetime Security and Exchange Commission commissioner, Charles Udora, raised some underlying issues on the policy.
“Are the dormant account balances limited to any specific amount or will the borrowing take everything in all dormant accounts in all deposit money banks?
•Investors task govt on incentives to enhance industry growth
The nearly one-year devastating effect of the COVID-19 crisis has continued to take huge toll on the hospitality sector, as the bottom-line of listed firms in the sector has remained vulnerable to the challenges of restrictions.
The most hit is the share price of these companies on the Nigerian Stock Exchange (NSE), which has remained stagnated at nominal value year to date following negative sentiments that have enveloped the demand of the stocks.
Apparently irked by the unprecedented loss incurred by the firms in the sector, especially in the current financial year, stock market investors at the weekend, stressed the need for government to support listed firms under the sector with incentives in form of tax holiday and other palliatives throughout the period of the pandemic.
TODAY
January 7, 2021
Despite opposition from stakeholders, the federal government has perfected ways to borrow funds from unclaimed dividends and dormant bank account balances unattended to for at least six years, thanks to the 2020 Finance Act.
With the coming into force of the law, which empowers the federal government to borrow from the two sources, proceeds from the two sources will stand as special credit to the federal government through the Unclaimed Funds Trust Fund contained in the Finance Act 2020, recently signed into law by President Muhammadu Buhari.
Part of the law provides that, “Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank, which has remained unclaimed or unutilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account, shall be transferred immedi