‘Blowing’ pension fund on infrastructure projects is a misguided initiative with disastrous consequences for Nigerian workers

Thursday, 16 May 2024 04:48

‘Blowing’ pension fund on infrastructure projects is a misguided initiative with disastrous consequences for Nigerian workers - Atiku

font size decrease font size increase font size
Print
Email

Rate this item

(0 votes)

‘Blowing’ pension fund on infrastructure projects is a misguided initiative with disastrous consequences for Nigerian workers - Atiku

Former Vice President Atiku Abubakar has raised concerns over the announcement by the federal government regarding the use of pension funds for infrastructure development. Speaking out against the initiative, Abubakar warned that tapping into the N20 trillion pension fund could breach the Pension Reform Act of 2014.

The controversy arose following a statement by Wale Edun, the Finance Minister and Coordinating Minister of the Economy, after a Federal Executive Council (FEC) meeting on May 14. Edun disclosed the government’s plan to unlock pension funds and other domestic resources to finance critical infrastructure projects across Nigeria. He emphasized the focus on domestic savings, though he mentioned the potential for attracting foreign investment in the future.

Abubakar criticized the lack of specifics in Edun's disclosure, particularly the absence of details on the percentage of pension funds to be allocated for these projects. He argued that such a move is not only misguided but could have severe consequences for retirees who rely on their pension savings.

“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,” Abubakar stated.

He urged the government to adhere strictly to the Pension Reform Act and the revised Regulation on Investment of Pension Assets issued by the National Pension Commission (PenCom). According to these regulations, pension funds can invest no more than 5% of their total assets in infrastructure projects. With total pension fund assets around N18 trillion as of December 2023, Abubakar noted that a significant portion is already invested in federal government securities.

“There is NO free Pension Funds that is more than 5% of the total value of the nation's pension fund for Edun to fiddle with,” he emphasized.

Abubakar concluded by calling on Edun to find alternative solutions for funding infrastructure without compromising pension funds. He stressed the need for economic reforms to restore investor confidence and leverage private resources, skills, and technology for sustainable development.

Abubakar served as Vice President of Nigeria from 1999 to 2007 and was the presidential candidate for the Peoples Democratic Party in 2023.