Former Vice President Atiku Abubakar has sounded the alarm over the federal government’s controversial plan to dip into Nigeria’s pension fund to finance infrastructure projects, sparking concerns about the financial security of the country’s retirees.
In a post yesterday, May 15, 2024, on X, Atiku, who described the move as misguided, added that the initiative must be stopped immediately.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on Tuesday, May 14, said the government had 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.
Atiku however warned that the decision could have devastating effects on the lives of Nigerians, who had worked hard, saved money, and now relied 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.
“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 now survive on their pensions after retiring from service. It is another attempt to perpetrate illegality by the federal government,” he said.
Atiku explained that 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.
“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 were no easy ways to address the challenges of funding infrastructure development in Nigeria, but added that Edun needed to implement the necessary reforms to regain investor confidence in the Nigerian economy and leverage private resources, skills, and technology.
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