The Nigeria Deposit Insurance Corporation (NDIC) said it had embarked on collaboration and cooperation with other deposit insurance agencies globally to address the challenges facing the insurance industry. The NDIC Managing Director/Chief Executive, Bello Hassan, said this at a retreat organised by the Corporation for members of the House of Representatives Committee on Insurance and Actuarial Matters, on Thursday in Lagos. The News Agency of Nigeria (NAN) reports that the aim of the workshop, with theme, “Deposit Insurance in Nigeria: Restrategising for Tomorrow,” was to help lawmakers know the corporation’s problems towards amending the NDIC Act.

“Our world as we know, is rapidly changing. Innovations and threats to existing models of business, regulation and supervision are manifesting in our operations Regulators in financial systems across the globe are also brainstorming on fresh ideas to ensure that the financial system remains resilient, sound and stable so as to continue to play its supportive role in the economy. The NDIC is, therefore, not left out in restrategising to enhance its operations,” said Hassan. According to him, the Corporation has enhanced collaboration with relevant stakeholders like National Assembly, Federal Ministry of Finance, Budget & National Planning, the Judiciary and the CBN on almost all relevant activities. We are also active on the global scene, and have, therefore, embarked on robust collaboration and cooperation with deposit insurance agencies and global bodies, particularly in the area of knowledge and information sharing.

“The aim of these efforts is to effectively address the technological, legal, regulatory, and supervisory challenges facing the deposit insurance system,” he said. He encouraged financial institutions to effectively manage the risks arising from these new technologies and other innovations to ensure continued safety and soundness of the monetary system. The Chairman, House of Representatives Committee on Insurance and Actuarial Matters, Darlington Nwokocha, said, “the aim of the retreat is to make laws to help NDIC boost the confidence of the people that their monies are safe.

“And if they don’t have that confidence, we can’t achieve a very stable economy because the banking sector will be disstabilised as well as the economy. So we need them, they need us at this point where we look at the laws; considering again the dynamics in the society. Like now, there are few things that we have found in the present NDIC Act that we need to amend so as to give them more power to achieve their mandate more effectively,” he said.

Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) has said that “The largest allocation of Special Drawing Rights (SDRs) in history—about $650 billion—comes into effect today. The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis. The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

“SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about US$275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 billion – equivalent to as much as 6 percent of GDP in some cases. SDRs are a precious resource and the decision on how best to use them rests with our member countries. For SDRs to be deployed for the maximum benefit of member countries and the global economy, those decisions should be prudent and well-informed. To support countries, and help ensure transparency and accountability, the IMF is providing a framework for assessing the macroeconomic implications of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability. The IMF will also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years’ time.

“To magnify the benefits of this allocation, the IMF is encouraging voluntary channeling of some SDRs from countries with strong external positions to countries most in need. Over the past 16 months, some members have already pledged to lend US$24bn, including US$15 billion from their existing SDRs, to the IMF’s Poverty Reduction and Growth Trust, which provides concessional loans to low-income countries. This is just a start, and the IMF will continue to work with our members to build on this effort.

(Link to more information on SDRs: Special Drawing Rights (imf.org))

“The IMF is also engaging with its member countries on the possibility of a new Resilience and Sustainability Trust, which could use channeled SDRs to help the most vulnerable countries with structural transformation, including confronting climate-related challenges. Another possibility could be to channel SDRs to support lending by multilateral development banks. This SDR allocation is a critical component of the IMF’s broader effort to support countries through the pandemic, which includes: US$117 billion in new financing for 85 countries; debt service relief for 29 low-income countries; and policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery.”