Atiku Abubakar, the former Vice President, has criticized the federal government for proposing to use Nigeria’s N20 trillion pension funds for building important infrastructure.
The Finance Minister and Coordinating Minister of the Economy, Wale Edun, announced on May 14 that the government intends to use the large pension fund and other local resources to finance infrastructure projects in Nigeria.
Edun explained that the government’s strategy is to utilize domestic financial resources, such as pension and life insurance funds, to support national development and foster local economic growth.
In response, Atiku rebuked the idea. In a post on X on Wednesday, May 15, Abubakar said it is a misguided initiative that must be stopped immediately.
My attention is drawn to a disturbing disclosure by the Finance Minister and Coordinating Minister of the Economy, Wale Edun, as he addressed State House correspondents after the Federal Executive Council (FEC) meeting at the Presidential Villa on Tuesday, 14 May.
There is, according to the Minister, a move by the Federal Government to rev up economic growth by unlocking N20 trillion from the nation’s pension funds and other funds to finance critical infrastructure projects across the country. The Minister has indicated that although “the initiative is expected to attract foreign investment interest over time”, domestic savings are his ‘immediate focus’ for now.
He provided no useful details, such as the percentage of the funds to be mopped up from the Pension Funds, for example. Even at that, this move must be halted immediately! It is a misguided initiative that could lead to disastrous consequences on the lives of Nigeria’s hardworking men and women who toiled and saved and who now survive on their pensions having retired from service.
It is another attempt to perpetrate illegality by the Federal Government. The government must be cautioned to act strictly within the provisions of the Pension Reform Act of 2014 (PRA 2014), along with the revised Regulation on Investment of Pension Assets issued by the National Pension Commission (PenCom). In particular, the Federal Government must not act contrary to the provisions of the extant Regulation on investment limits to wit: Pension Funds can invest no more than 5% of total pension funds’ assets in infrastructure investments. I note that as of December 2023, total pension funds assets were approximately N18 Trillion, of which 75% of these are investments in FGN Securities.
There is NO free Pension Funds thst is more than 5% of the total value of the nation’s pension fund for Mr. Edun to fiddle with.
There are no easy ways for Mr. Edun to address the challenges of funding infrastructure development in Nigeria. He can’t cut corners. He must introduce the necessary reforms to restore investor confidence in the Nigerian economy and to leverage private resources, skills, and technology. -AA
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