Not more than 2 percent of the total number of account holders in banks control about 90 percent of the deposits in the banks, the Nigeria Deposit Insurance Corporation (NDIC) has said.
Speaking yesterday at the Business Day Annual Capital Market Conference, in Abuja, the Director, Research and International Affairs of the corporation, Mohammed Umar, said the remaining 98 percent of the depositors were those that had savings of N500,000 and below at a given time.
He said there was a wide gap in income inequality among Nigerians, looking at the depositors’ data.
As at 2014, the total volume of deposits in the insured banks was N18.02 trillion.
Umar said there was lack of awareness of the mandate of NDIC even among the operators in the financial sector which, he noted, was a big setback to woo the confidence of many consumers of financial services in the country.
He urged the regulators, such as the Securities and Exchange Commission, the Pension Commission and the Nigerian Stock Exchange, to increase the level of the collaboration with the NDIC to ensure confidence in the financial sector by Nigerians.
In his address at the conference, Director General of the SEC, Mounir Gwarzo, said he was particularly pleased about the focus of this year’s edition which was ‘Deepening Nigeria’s Capital Market through Maximum Utilization of Pension Funds’.
He said that was a conversation our country must continue to have in order to ensure that the impressive pool of savings we were able to mobilise over the last decade was put to productive use for inclusive economic growth.
Gwarzo said the March 2016 data from PenCom showed that Nigerian PFAs invested only 8.16% of their assets in the domestically listed equities market and 1.24% of their assets in foreign equities.
“This translates to less than 10% of the total assets invested in equities.
“At 9.4% allocation to equities, Nigeria has the lowest allocation to equities by pension funds among peer markets. In contrast, South African pension fund invests 73% of total assets in equities; Botswana (70%), Namibia (66%) and Swaziland (57%) which have much smaller and shallower stock markets than Nigeria but allocate far more of total assets to equities.
“The world average for allocation by PFAs to equities is 42% which is more than fourfold the level in Nigeria.
“In my opinion, this current macroeconomic environment presents all stakeholders in the pension industry an opportunity to reevaluate their current asset allocation and aim to improve it. This makes sense for asset safety and for ensuring PFAs beat inflation consistently.
“Our PFAs can certainly not afford to continue allocating over two-thirds of contributors’ assets to FGN securities with the array of available investible products, especially in an increasingly inflationary environment,” he said.
In her remark, the Director General , Pension Commission, Mrs Chinelo Anohu-Amazu, said efforts were on by the commission to allow transfer windows for pensioners to move from one pension administrator to another in order to allow room for choices and promote greater competition in managing pension assets.
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