Atiku Fires Back At FG Over Plans To Use N20trn Pension Funds To Build Infrastructure
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Reactions have trailed the proposed plan by the federal government to explore pension funds in bridging the infrastructure deficit in the country.
Pension funds, according to data from the National Pension Commission, stood at N19.66 trillion at the end of March 2024.
Former Vice President, Atiku Abubakar, has criticised the Nigerian government’s plans to use N20 trillion from pension funds to finance infrastructure projects. Watch related video:
At the end of the federal executive council (FEC) meeting on Tuesday, the coordinating minister for the economy and minister of finance, Wale Edun, said the government has a strategic plan to harness the N20 trillion pension fund and other locally available resources for infrastructure development in Nigeria. He said the government is focused on tapping into domestic financial resources, particularly pension and life insurance funds, to leverage local funds for national growth.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun after the Federal Executive Council meeting on Tuesday hinted at plans to tap into pension funds as part of efforts to bridge the housing deficit. However, checks by Daily Trust showed that guidelines from the National Pension Commission on investible instruments for pension. funds do not make provision for the federal government to take pension funds, however, they can only invest it in approved securities.
The instruments/asset classes that qualify for investment by pension funds included quoted ordinary shares of publicly listed companies, FGN/State/LG Debt Securities approved by SEC.
Others are money market instruments, which include fixed deposits, tenured placements and bankers’ acceptances issued by financial institutions and commercial papers issued by corporate entities, open/closed-end and hybrid funds including real estate investment trusts and exchange- traded funds) which are specialist/managed investment funds that invest in securities.
Reacting to the development, Mr. Abubakar took to his verified X handle on Wednesday to criticise the plan, describing it as illegal and saying it could have disastrous consequences. for pensioners. He cited the Pension Reform Act of 2014 and regulations by the National Pension Commission (PenCom) which limits pension fund investment in infrastructure to five percent of total assets. He said: “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 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
“The government must be cautioned to act strictly within the provisions of the Pension Reform Act of 2014 (PRA2014), along with the revised regulation on investment of pension assets issued by PenCorn.
“The government must not act contrary to the provisions of the extant regulation on investment limits to wit: Pension funds can invest. no more than five per cent of total pension funds assets in infrastructure investments. As of December 2023, total pension funds assets were approximately N18 trillion, of which 75 per cent of these are investments in FGN securities. There is no free pension fund that is more than 5 per cent 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.”
Expectant Wife In Hospital, Uses Money Raised For Her CS To Buy Phone & Dog. Now Stranded After Delivery, Woman Cries For Help He must introduce the necessary reforms to restore investor confidence in the Nigerian economy and to leverage private resources, skills, and technology.”
