NLNG Aquires 5 Ships as Finance Minister task Insurance Firms

Nigeria Liquefied Natural Gas Company (NLNG) Limited is said to have taken delivery of 5 out of 6 ships it ordered to help boost maritime trade.

According to a report by The Nation, the ships, bought for $1.6 billion, have  increased NLNG’s fleet to 23, the highest by any company in the country.

The transport ministry through one of its officials stated that the acquisition of the ships was imperative to the realisation of the objective of the Local Content Act.

According to the official, it was lamentable that Nigeria was not participating in the exploration, development, production and shipment of its energy products despite being the largest producer of crude oil in Africa with a capacity to produce 2.5 million barrels per day.

Meanwhile, minister of finance, Mrs Kemi Adeosun on Monday hinted at a pending recapitalisation exercise for all insurance companies in Nigeria.

According to Vanguard, the minister made the disclosure at the opening ceremony of the National Insurance Conference organised by the sector’s Insurance Industry Consultative Council (IICC) with the theme ‘Expanding National Resources and Infrastructure in Challenging Times’ held in Abuja.

Stressing that the recapitalisation exercise was inevitable, Adeosun noted that “the first top three banks in the country have over N30 billion capital base each while the top three insurance companies’ capital base is between N20 and 25 million each.”

Vanguard reports that insurance companies in Nigeria in 2007 increased their capital base of Life, non-life and composite firms from the initial base of N150m, N200m and N350m to N2billion, N3billion, and N5billion, respectively, and that four reinsurance firms were asked to recapitalise from N350million to N10billion during the exercise.

Adeosun said “the principal objective of the reform is to have emergence of bigger and stronger players with enhanced capacity, restoration of confidence of the public, enhance the international competitiveness of local operators.”

The minister argued that the industry was underperforming, compared to its pension and banking counterparts, identifying low awareness as one of the factors responsible for the under-performance.

Adeosun said if current efforts to address the sector’s underperformance yielded a 0. 33 per cent increase in insurance penetration, it could result to a growth of 0.5 per cent in GDP and was capable of creating over 70,000 jobs annually.