An investigative panel set up by the Federal Government to audit existing financial activities around the controversial Power Holding Company of Nigeria, PHCN, Superannuation Pension Fund has uncovered about £2,204,814.18 million company's total pension sum stashed away in a bank in the United Kingdom (UK).
The money which has been lodged in the UK's Barclays Bank for close to 21 years was said to have accumulated from pension deposits for expatriate workers of the utility by its officials long before it metamorphosed into PHCN.
Chairman of the eight-man government audit panel on PHCN pension, Mr. Joseph Ajiboye who is also a former Auditor General of the Federation, AuGF, said however that the panel could not ascertain if officials of PHCN had continued to remit pension and gratuity deductions to the said foreign account considering that the last expatriate pensioner of the utility is reported to be late.
Presenting the report of the investigation yesterday to the Minister of State for Power, Mr. Darius Ishaku, Ajiboye explained that its consideration of various financial audit activities of the in-house pension scheme of the company showed that its failure to fund the scheme was based on an excuse that it has perpetually operated at commercial loss, especially within these periods.
He noted that financial audits of the scheme from 1990 to 2010 which it studied in a bid to ascertain transactional trends in the account showed that from 1990 to 1999, a total of N1, 787,919 billion was paid out as pension and gratuities to workers while N51, 279,940,138 was paid out in the years 2000 to 2010.
The panel's report also indicates that PHCN has in the past 21 years failed to fund its in-house pension scheme, thus putting the future of its retiring workers in jeopardy. The report disclosed that currently the electricity behemoth has no money to fund the pension scheme.
It also discovered that some of PHCN assets which were assigned to fund the pension scheme had been purportedly sold off.
According to Ajiboye, the financial documents studied by the committee showed that a total of N5,367,859,138 was paid out as pensions and gratuities to PHCN workers within these periods, adding that an actuarial sum of N107 billion was equally set aside by the utility as contingent sum.
The immediate past Minister of Power, Prof. Barth Nnaji set up the panel with a 30-day lifespan to investigate the status of pension in the power sector vis-à-vis the pension laws, identify officers involved in any act of misconduct in the management of pension as well as review pension matters in the Agari committee report.
This was following allegations of illegal operation of and deductions from an in-house pension scheme that runs contrary to extant pension laws in the country,
The panel was also expected to recommend measures to guard against occurrence of similar incidents in the future as well as sanctions against culprits.
The report said PHCN has for years operated an in-house defined pension scheme codenamed "the superannuation pension fund", with only the management and leaders of its trade unions as its trustees; this arrangement however runs contrary to provisions in the Pension Reform Act (PRA) 2004 which came into operation in 2007, and has however been frowned at by the Federal Government.
According to Ajiboye, "When we looked at all the financial statements that had been audited as far back as 1990, we found out that between 1990 and 1999, the total pension and gratuity paid under the superannuation fund was N1,787,919 billion, both gratuity and pension were less than N2 billion paid and it is understandable because of the low level of salaries and wages paid in the 90's.
"From 2000 to 2010, the total pension and gratuity paid was N51, 279,940,138 and so for the 21 years running, the total gratuity and pension paid under the superannuation fund to all pensioners was N5,367, 859,138, that is all that has been paid since 2010 and these accounts had been audited and confirmed as real and applicable figures."
He further noted that, "We had an issue of N107 billion which was an actuarial valuation and was a contingent liability; it is not as if any money was paid out of that.
"We also spoke with the National Union of Pensioners who gave us a historical background of the scheme which they traced to the ECN and the Niger Dam Authority and how the issue of 25 percent arose; we have a paper from them that shows that there was no deduction of the percentage from the salaries of any worker up till April this year, they also showed evidence that when the ECN and Niger Dam were collapsed into one, they all decided to maintain one scheme but it was not contributory.
The panel further observed that "certain properties were given to the superannuation fund to bring income in addition to whatever PHCN would contribute but unfortunately we found out that one of the properties in Kado Abuja was purportedly sold and we didn't find out if there was any money remitted from such sale.
"Another one is a storey building in Lagos that was ceded to the Federal Inland Revenue Services by PHCN because it was owing taxes that it could not pay. The recurrent expenditure of PHCN is not provided by the government but its capital expenditure.
"We found out that a total of £2,204,814.18 million of PHCN pension money is still in London laying idle as accumulated monies from pension deposits for expatriate workers of the former ECN and Niger Dam Authority; we understand that there have been efforts to retrieve the money that is lying idle in the Barclays Bank," Ajiboye stated.
The panel however recommended amongst other things that a full audit of accounts of PHCN successor companies be carried out to ascertain their levels of accountability with funds given to them by the Market Operator.
Ishaku in his remarks, expressed gratitude to the panel which he noted had done a thorough job that will quicken outstanding negotiations with PHCN unions on the privatisation exercise.
Vanguard
Tuesday, September 11, 2012
Monday, September 10, 2012
Video - Sacked Air Nigeria staff protest
Former staff at Air Nigeria say they've been unfairly sacked.
The airline announced it was shutting down operations on Wednesday, and fired nearly 1,000 people.
Nigeria third best amongst African nations in 2012 Paralympics
As the 2012 Paralympic Games rounded off in London on Sunday, no fewer than 10 African countries made the medals table, winning a total of 112 medals over the 11 days of the Games, Aug. 29 to Sept . 9.
African nations' performance at the Games represented a marginal improvement over their performance at the last Paralympic Games in Beijing, China, in 2008, where only eight nations made the medals table.
The 10 African countries notched up 112 medals, made up of 38 gold, 36 silver and 38 bronze medals.
Nigeria, which led Africa's medals table from the beginning of the games, was beaten to the third place by Tunisia.
Tunisia, now Africa's number one at the end of the Paralympic Games, won 19 medals - nine gold, five silver and five bronze, to beat South Africa, which had 25 medals - eight gold, 12 silver and seven bronze medals - to the second position.
Nigeria, which placed third with 13 medals over all, had six gold, five silver and two bronze.
Nigeria, however, ended up the Games' overall number one winners of the Power lifting event, from where it won 12 of its 13 medals.
Algeria placed fourth with a total of 19 medals - (4-6-9), Egypt had 15 (4-4-7), Morocco (3-0-3), Kenya (2-2-2),
Others are: Namibia (1-1-0), Angola (1-0-1) and Ethiopia (0-1-0). (NAN)
African nations' performance at the Games represented a marginal improvement over their performance at the last Paralympic Games in Beijing, China, in 2008, where only eight nations made the medals table.
The 10 African countries notched up 112 medals, made up of 38 gold, 36 silver and 38 bronze medals.
Nigeria, which led Africa's medals table from the beginning of the games, was beaten to the third place by Tunisia.
Tunisia, now Africa's number one at the end of the Paralympic Games, won 19 medals - nine gold, five silver and five bronze, to beat South Africa, which had 25 medals - eight gold, 12 silver and seven bronze medals - to the second position.
Nigeria, which placed third with 13 medals over all, had six gold, five silver and two bronze.
Nigeria, however, ended up the Games' overall number one winners of the Power lifting event, from where it won 12 of its 13 medals.
Algeria placed fourth with a total of 19 medals - (4-6-9), Egypt had 15 (4-4-7), Morocco (3-0-3), Kenya (2-2-2),
Others are: Namibia (1-1-0), Angola (1-0-1) and Ethiopia (0-1-0). (NAN)
Related story: Nigeria wins gold and sets new world record in paralympics
Central Bank says 5,000 Naira note will reduce inflation
The Central Bank of Nigeria and its agents have been very active, as should be expected, in promoting the merits of the proposed N5000 note. To this end, the apex bank also set out to dispel what it alleges to be disinformation regarding the proposed exercise.
In its widely published one-page advertorial titled, False Rumours on Currency Restructuring, CBN refutes the reported vote of N40bn set aside for this exercise. It is not clear why the CBN waited so long before it refuted the widely quoted value of N40bn in the media; regrettably, however, the apex bank still failed to reveal the estimated cost projection for the project, so that its cost/benefit can be appropriately publicly evaluated.
Central Bank was also eager in its advertorial to confirm that the contract for the proposed currency restructuring has not been awarded. In reality, the issue of contract award is neither here nor there, since CBN appears to have made up its mind, in spite of public opinion.
In earlier press releases, CBN indicated that the concept and designs were completed locally at minimal cost. CBN's cause might probably have been better served, if it had also transparently declared the originating cost as well as the expected savings on the cost of currency management in the country.
Nonetheless, it will be hard to fault the public's lack of confidence on any promise of benefits from such cost savings; for example, the adoption of the cashless programme was touted to reduce banks' operation cost by over 30 per cent, so that ultimately, the banks could support the real sector with single-digit borrowing cost. Inexplicably, this expectation has remained unfulfilled!
Incidentally, in the advertorial under reference, CBN recognises that our currency management costs are influenced by frequency of usage and poor handling. However, CBN's belief that a promo campaign would, on its own, lead to greater respect for the naira and better currency handling, is however, patently unfounded. In truth, adoption and respect for currencies everywhere is based on the recognition of the purchasing value of the currency unit.
In a situation, for example, where N50, the least note denomination, under the proposed restructuring, cannot even purchase one finger of plantain, it is most likely that the funds spent in the production and promotion of the new N20, N10, N5, N2 and N1 coins would be money down the drain!
It is also surprising that CBN identifies the possibility of more precise rounding up as an advantage of the proposed new coin profile; this is, undoubtedly a tongue in the cheek claim, as the new profile has already inherently rounded up primary kobo denominations!!
Nigerians who can remember clearly recognise that coins fell out of favour because they lost any meaningful purchasing value, and it was no surprise when they ultimately found favour with metal brokers. Besides, it is clear that the initial cost of production and destruction of the existing currency profile has not been consciously captured as added cost to the projected expenditure on the new currency structure.
Furthermore, the apex bank's advertorial maintains that "currency restructuring does not cause inflation in any form whatsoever, as it will not increase money supply." This observation, of course, is unassailable, if all things remain equal; in other words, so long as the velocity or the speed of spending money remains the same, there will be no increase in money supply.
If on the other hand, the N5000 note, for example, is speedily offloaded on receipt in order to unbundle the value, there is no doubt that the velocity of currency in circulation would increase and create the same impact as increase in money supply; so, CBN's claims that the N5000 note will not induce inflation needs to be qualified!
Inexplicably, the CBN advertorial further stretches the argument on inflation, when it suggests that "currency restructuring may actually help in tackling inflation"! If indeed reduced inflation rates coincided with the introduction of higher denomination notes in the past, the apex bank has not provided evidence that the drop was the direct result of higher denominations introduced.
Indeed, any insistence of a causative relationship will be an outright contradiction of CBN's open admission that inflation is the product of increase in money supply, as the converse of that is that lower inflation rate is the product of reduction in money supply.
In other words, if higher denominations do not increase money supply, CBN cannot also prove that higher denominations will reduce money supply and lower the inflation rate, especially when it is incontestable that the proposed higher denomination, in conjunction with the cashless programme and coin profile, will ultimately increase the velocity of money in circulation with the same result as increasing money supply.
In its widely published one-page advertorial titled, False Rumours on Currency Restructuring, CBN refutes the reported vote of N40bn set aside for this exercise. It is not clear why the CBN waited so long before it refuted the widely quoted value of N40bn in the media; regrettably, however, the apex bank still failed to reveal the estimated cost projection for the project, so that its cost/benefit can be appropriately publicly evaluated.
Central Bank was also eager in its advertorial to confirm that the contract for the proposed currency restructuring has not been awarded. In reality, the issue of contract award is neither here nor there, since CBN appears to have made up its mind, in spite of public opinion.
In earlier press releases, CBN indicated that the concept and designs were completed locally at minimal cost. CBN's cause might probably have been better served, if it had also transparently declared the originating cost as well as the expected savings on the cost of currency management in the country.
Nonetheless, it will be hard to fault the public's lack of confidence on any promise of benefits from such cost savings; for example, the adoption of the cashless programme was touted to reduce banks' operation cost by over 30 per cent, so that ultimately, the banks could support the real sector with single-digit borrowing cost. Inexplicably, this expectation has remained unfulfilled!
Incidentally, in the advertorial under reference, CBN recognises that our currency management costs are influenced by frequency of usage and poor handling. However, CBN's belief that a promo campaign would, on its own, lead to greater respect for the naira and better currency handling, is however, patently unfounded. In truth, adoption and respect for currencies everywhere is based on the recognition of the purchasing value of the currency unit.
In a situation, for example, where N50, the least note denomination, under the proposed restructuring, cannot even purchase one finger of plantain, it is most likely that the funds spent in the production and promotion of the new N20, N10, N5, N2 and N1 coins would be money down the drain!
It is also surprising that CBN identifies the possibility of more precise rounding up as an advantage of the proposed new coin profile; this is, undoubtedly a tongue in the cheek claim, as the new profile has already inherently rounded up primary kobo denominations!!
Nigerians who can remember clearly recognise that coins fell out of favour because they lost any meaningful purchasing value, and it was no surprise when they ultimately found favour with metal brokers. Besides, it is clear that the initial cost of production and destruction of the existing currency profile has not been consciously captured as added cost to the projected expenditure on the new currency structure.
Furthermore, the apex bank's advertorial maintains that "currency restructuring does not cause inflation in any form whatsoever, as it will not increase money supply." This observation, of course, is unassailable, if all things remain equal; in other words, so long as the velocity or the speed of spending money remains the same, there will be no increase in money supply.
If on the other hand, the N5000 note, for example, is speedily offloaded on receipt in order to unbundle the value, there is no doubt that the velocity of currency in circulation would increase and create the same impact as increase in money supply; so, CBN's claims that the N5000 note will not induce inflation needs to be qualified!
Inexplicably, the CBN advertorial further stretches the argument on inflation, when it suggests that "currency restructuring may actually help in tackling inflation"! If indeed reduced inflation rates coincided with the introduction of higher denomination notes in the past, the apex bank has not provided evidence that the drop was the direct result of higher denominations introduced.
Indeed, any insistence of a causative relationship will be an outright contradiction of CBN's open admission that inflation is the product of increase in money supply, as the converse of that is that lower inflation rate is the product of reduction in money supply.
In other words, if higher denominations do not increase money supply, CBN cannot also prove that higher denominations will reduce money supply and lower the inflation rate, especially when it is incontestable that the proposed higher denomination, in conjunction with the cashless programme and coin profile, will ultimately increase the velocity of money in circulation with the same result as increasing money supply.
Related story: Video - Nigeria introduces new 5,000 Naira bank note
Nigeria draw with Liberia in Nations Cup qualifier
The Super Eagles Saturday night played a 2-2 draw with the Lone Star of Liberia in the first leg of the 2013 Africa Cup of Nations qualifying match in Monrovia.
After the hosts shot into an early lead in the 5th minute through Tonia Tinsdel, the AFCON ticket seeking Eagles responded with brilliant exchanges between the forward line marshalled by the trio of Ikechukwu Uche, Victor Moses and Emmanuel Emenike.
That soon paid off in the 15th minute as Nosa Igiebor cashed on a loose rebound ball from Emenike's effort to equalise for Nigeria.
The Eagles then seized the moment, temporarily putting the Liberians under intense heat.
Twice Uche had the chance to score but missed. Chelsea new boy, Moses was however hacked down in the box in the heat of pressure that ensued in a goal mouth melee. Uche effortlessly put the resultant penalty kick into the wrong side of Nathaniel Shirman in goal for the Liberians
What would have given the Eagles a clear advantage in the dying minutes of the first half was blown by Uche. After rounding the Liberian keeper and having only an empty net to tap the ball into, shot wide.
On resumption for the second half, the pep talk by Coach Stephen Keshi did not appear to do any magic.
The Liberian forward trio of Tisdell, Sekou Jabateh Oliseh and Zah Kranger ceaselessly piled pressure on the Eagles.
A pile driver fired by Kranger beat Vincent Enyeama but hit the upright and rebounded for the Nigerian keeper to grab. Another effort scored by the Liberian was adjudged to have been fired from an off-side position.
Deep into the game, Oliseh who had turned Juwon Oshaniwa and Godfrey Oboabona into his toys, walking through them with relative ease, grabbed an equaliser that sent the entire 40,000 capacity crowd at the Samuel Kanyon Doe Stadium into frenzied celebration.
He tapped a lob from the right flank beyond a badly positioned Enyeama. The hosts then began to push deep into the Nigerian half to keep every Nigerian present at the stadium on edge.
The decisive return leg that would determine whether will again miss another AFCON is slated to hold in the weekend of October 8 or 9 in Calabar.
After the hosts shot into an early lead in the 5th minute through Tonia Tinsdel, the AFCON ticket seeking Eagles responded with brilliant exchanges between the forward line marshalled by the trio of Ikechukwu Uche, Victor Moses and Emmanuel Emenike.
That soon paid off in the 15th minute as Nosa Igiebor cashed on a loose rebound ball from Emenike's effort to equalise for Nigeria.
The Eagles then seized the moment, temporarily putting the Liberians under intense heat.
Twice Uche had the chance to score but missed. Chelsea new boy, Moses was however hacked down in the box in the heat of pressure that ensued in a goal mouth melee. Uche effortlessly put the resultant penalty kick into the wrong side of Nathaniel Shirman in goal for the Liberians
What would have given the Eagles a clear advantage in the dying minutes of the first half was blown by Uche. After rounding the Liberian keeper and having only an empty net to tap the ball into, shot wide.
On resumption for the second half, the pep talk by Coach Stephen Keshi did not appear to do any magic.
The Liberian forward trio of Tisdell, Sekou Jabateh Oliseh and Zah Kranger ceaselessly piled pressure on the Eagles.
A pile driver fired by Kranger beat Vincent Enyeama but hit the upright and rebounded for the Nigerian keeper to grab. Another effort scored by the Liberian was adjudged to have been fired from an off-side position.
Deep into the game, Oliseh who had turned Juwon Oshaniwa and Godfrey Oboabona into his toys, walking through them with relative ease, grabbed an equaliser that sent the entire 40,000 capacity crowd at the Samuel Kanyon Doe Stadium into frenzied celebration.
He tapped a lob from the right flank beyond a badly positioned Enyeama. The hosts then began to push deep into the Nigerian half to keep every Nigerian present at the stadium on edge.
The decisive return leg that would determine whether will again miss another AFCON is slated to hold in the weekend of October 8 or 9 in Calabar.
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