The Managing Director/Chief Executive Officer of Sigma Pensions Limited, Mr. Dave Uduanu, yesterday said the successes story in the Nigerian pensions industry can be replicated to other struggling sectors to achieve a broader economic growth.
He said reforms that brought about the success in the pension industry that should be replicated include adequate capitalisation, good corporate governance, the right policies, and a renewed interest in enhancing domestic investments.
Uduanu, who spoke at the digital dialogue organised by BusinessDay, noted that one sector that has continued to struggle is the power sector which he said needs adequate capitalisation.
He added: “On the power sector, I think one of the things we have seen is that we have players who are not well capitalised and therefore overleveraged so they are struggling.
“One of the things regulators must do beyond the technical assessment is also the commercial assessment. But more importantly is to encourage players and companies who are already successful to either come into this sector or to back entrepreneurs coming to this sector with capital.
“I think well capitalised operators would be very important and we have seen that happen in banking and in pension.”
Speaking further, he said: “We need to encourage our companies to achieve scale and it is important because we have a lot of fragmentation in some of these industries and we have companies that have achieved scale and they can become national and regional leaders. “We can see what Dangote is doing in the area of cement and also what Nigerian banks are doing. We can also have Nigerian insurance and pension companies dominate the local environment and then go regional.
“So, it is important to encourage domestic investors. We always talk about foreign investors and we don’t give incentives for domestic investors to come in.”
Furthermore he said: “The last point is again on boards with strong corporate governance standards.”
“What is needed is a combination of well capitalised operators, domestic operators who are building businesses of scale and also, we need to encourage companies to build strong corporate governance standards.”
Also speaking on the success recorded in the pension industry, he said: “Today, we have about $30 billion of pension assets and with 8.5 million contributors and more importantly, we have about 256,000 retirees who receive their pensions regularly and I can say unfailingly before the 24th of every month.”