Atiku Abubakar, former vice-president, has kicked against the federal government’s plan to borrow Nigeria’s pension fund to finance infrastructure projects.
In a post on X on Wednesday, Abubakar said it is a misguided initiative that must be stopped immediately.
On May 14, Wale Edun, the finance minister and coordinating minister of the economy, 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.
Edun said it was a significant step towards driving economic progress and addressing critical infrastructure needs.
However, Abubakar warned the decision could have devastating effects on the lives of Nigerians who have worked hard, saved money, and now rely on their pensions after retiring from service.
“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,” Abubakar said.
“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.”
Abubakar said 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 Funds 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 which Pension Funds can invest no more than 5% of total pension funds’ assets in infrastructure investments,” Abubakar said
“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 that is more than 5% of the total value of the nation’s pension fund for Mr. Edun to fiddle with.”
He said there are no easy ways to address the challenges of funding infrastructure development in Nigeria.
Abubakar added that the minister needs to implement the necessary reforms to regain investor confidence in the Nigerian economy and to leverage private resources, skills, and technology.
