FORMER Vice President Atiku Abubakar has raised concerns over the federal government’s planned withdrawal of N20 trillion from the pension fund for infrastructural development.
The presidential candidate of the Peoples Democratic Party (PDP) in the 2023 election, described the move as “another attempt to perpetrate illegality by the federal government.”
He accused the government of not providing details of how the funds would be deployed and the total percentage of funds to be withdrawn from the pension fund.
His reaction followed the disclosure by the coordinating minister for the economy and minister of finance, Wale Edun, on Tuesday, May 14, at the end of the Federal Executive Council (FEC) meeting, chaired by President Bola Tinubu, that the government was set to draw the fund,
Edun, was, however, silent on the specific projects for which the N20 trillion would be expended.
He, however, said there was a strategic plan that would support the effective implementation of the project.
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Despite the concerns about rising borrowing in the country, Edun said the government was focused on tapping into domestic financial resources, particularly pension and life insurance funds, to leverage local funds for national growth.
In his reaction, Atiku said, “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 (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 five per cent of total pension funds’ assets in infrastructure investments, “he further said.
He warned that there was no free pension fund for Tinubu’s government to fiddle with.
Similarly, a development economist, Celestine Okeke, said the development was risky considering how much Nigeria paid on debt servicing.
“The country spends over 90 per cent of its revenue in debt servicing. How can these funds be accounted for, amidst dwindling revenue resources and rising borrowing on the part of the government? This is people’s lifeline and we must be circumspect over our decisions,” he said.
Meanwhile, Edun said the government would channel the over N20 trillion into vital sectors such as housing and long-term mortgage provision.
The minister said the move was part of the government’s efforts to bridge Nigeria’s estimated 20 million housing deficits and to provide massive housing and mortgage loans at 12 per cent interest rates, with 25-year repayment plans.
“And the fact is that even before we start looking to foreign investors, we start looking to foreign funding, there is available in Nigeria, long term funds to fund infrastructure projects, and it’s within the pension, the life insurance and investment fund industry generally,” he said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.