Daily Watch – Mastercard buys into Jumia, Innoson rows with GTB

1st April 2019

Operators have raised pension funds investment in infrastructure to ₦18.5 billion as of the end of 2018 from ₦6.8 billion in 2017 under the Contributory Pension Scheme. Pencom’s figures showed that the total assets under the CPS stood at ₦8.63 trillion at the end of 2018. Under the Pension Reform Act 2014, the Pension Fund Administrators invest the accumulating funds in different investment portfolios, which are in the custody of the Pension Fund Custodians. Parts of the assets under the multi-fund structure were invested in infrastructure. Pencom commenced the implementation of the multi-fund structure for Retirement Savings Account funds in July, 2018. Since the inception of the CPS, all active contributors’ funds were being invested solely in the RSA active fund, irrespective of their age profiles. The multi-fund investment structure was conceived by Pencom to align the contributors’ risk appetite at each stage of their active and retirement lifecycles.

There is concern over transactions on e-payment platforms, including ATMs, POS Terminals, and Electronic Money Transfers in Nigeria as millions of transactions failures; POS debit errors, cards’ rejection, and POS network glitches, are recorded by users. Recent data from NIBSS shows the failure rate of the transactions on POS stood at 15.68 percent. NIBSS has had to apologise to banks and their clients, and says that it would step up and upgrade its system as the banks suggest that the challenge is more of system overload because the e-payment system has been widely accepted and used, which infrastructure may not have been projected adequately. NIBSS spokesperson, Lilian Phido, said, “It is an industry system glitch, which involves several stakeholders- banks, payment service providers and even the central bank of Nigeria,” as stated in a Nairametrics’ report. The NIBBS data shows that 53,941 transactions have been made on POS for the past two months in 2019. In January 2019, the volume of POS transactions stood at 28,162, indicating a decline in the volume of POS transactions by 8 percent between January and February 2019. When compared to the 31,926 volume recorded in December 2018, it shows a decline in the volume of POS transaction in early 2019. Meanwhile, the number of registered POS terminals inch up by 2 percent between January and February 2019. While in January, the number of POS terminals stood at 266,418, it increased to 272,272 in February 2019, according to NIBSS report. Data has shown that there was a decline in the volume and value of POS transaction so far in 2019. Nigerians spent the sum of ₦416 billion on POS transactions in between January and February 2019. ₦222.921 billion, according to the NIBSS data, was spent in January 2019, while ₦193 billion was spent in February. This represents ₦29 billion fall in value of POS transactions for February, indicating a 13 percent decline when compared to the transaction for the previous month.

Mastercard has expressed its intention to become a shareholder in Jumia. In a statement announcing the partnership on Friday, the companies said the investment was subject to certain conditions, which were not stated. Jumia and Mastercard first partnered in 2016 with the successful launch of Mastercard Payment Gateway Solutions in several markets and launch of JumiaPay, the payment service of the Jumia platform that facilitates transactions for consumers and sellers. Under the new agreement, the two companies said they would look to build on Mastercard’s presence across Africa, bringing its deep knowledge and expertise in payment solutions and technologies to spark new innovations and spur development in new customer segments. As part of the deal, the companies said they had also agreed to build on their current efforts to accelerate the adoption of electronic payment platforms among consumers and merchants. This is coming a few weeks after Jumia filed for an Initial Public Offering at the New York Stock Exchange. The IPO would value Jumia at about $1.5 billion and it would trade under JMIA on the NYSE. The largest shareholder in Jumia, MTN Group, also plans to sell its shares in the company to raise about $600 million to pay down debt.

A car manufacturing company, Innoson, says it has obtained a court order to take control of one of the commercial banks in the country, Guaranty Trust Bank, after obtaining a writ of Writ of Fieri Facias from the Federal High Court in Awka, Anambra State, against the bank to effect the judgment given by the Federal High Court in Ibadan and upheld by the Supreme Court of Nigeria. The firm’s head of corporate communication of Innoson, Cornel Osigwe, said that the Federal High in Ibadan, in 2014, had ordered GTB by way of Garnishee order absolute to pay ₦2.4 billion to Innoson with a 22 percent interest, per annum, on the judgment sum until the final liquidation of the judgment debt. However, GTB appealed this decision at the appeal up to the Supreme Court, which according to Innosson, the Court on February 27, 2019, dismissed GTB’s appeal and upheld the decision of both Federal High Court and the Appeal Court. The motor company and GTB had been in a long legal battle over alleged indiscriminate charges on Innoson’s account with the bank. GTB later claimed that Innoson fraudulently import vehicle parts with forged documents. However, the motor company denied this allegation, saying the allegation was an effort of defect from the real issue of ineptness against him. “We have taken over GTBank in Awka and Nnewi,” Osigwe subsequently announced, adding that “other branches are coming soon”.