Former Vice President, Atiku Abubakar, has criticised the Nigerian government’s plans to use N20 trillion from pension funds to finance infrastructure projects.
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 unveiled 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.
Reacting to the development, the presidential candidate of the Peoples Democratic Party (PDP)
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 5% of total assets and urged the government to implement reforms to attract private investment for infrastructure development.
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 (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.
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There is no free pension fund that 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.”
