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The Federal Government has concluded plan to borrow N2 trillion from the current N10 trillion pension funds to finance the development of infrastructure. The disclosure was made at the National Economic Council (NEC) meeting presided over by the Vice President, Yemi Osinbajo, on Thursday in Abuja.
Briefing newsmen at the end of the NEC meeting in Abuja, Kaduna State Governor, Mallam Nasir el-Rufai, stated that the decision of the Federal Government to pull N2 trillion out of the pension funds was reached by a NEC sub-committee.
Bridging Infrastructural Deficit: According to el-Rufai, the country will never be able to address its road infrastructure deficit with the current budgetary allocation for road construction and maintenance. He explained that with the N200 billion in the 2019 budget and N169 billion in 2020 budget, roads cannot be properly fixed.
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“In 2019 budget, N200 billion was budgeted for construction and maintenance of federal highways. In 2020, the budget is N169 billion. If we continue this way, we will never be able to fund highway infrastructure. We need to unlock funds to construct and maintain highways.
“We will never be able to construct and maintain highways with N200 billion every year. Highway infrastructure and maintenance can only be done with long term funds.”
[READ MORE: Nigeria spends $1.31 billion to service external debt in 2019)
Speaking on the rationale to borrow from the N10 trillion pension fund, El-Rufai stated that the decision followed an interim report earlier presented to the council, and the decision to borrow N2 trillion from the pension fund was in compliance with the Pension Reform Act 2004, which empowers the government to borrow 20% of the fund to address national issues.
According to him, various countries of the world such as Chile and South Africa funded their infrastructure growth by borrowing money from workers’ pension funds. El-Rufai also stated that with Nigeria’s pension funds largely dominated by youths in their 30s, who still have several years ahead of retirement, utilising the funds for infrastructure would not generate any problem.
Other infrastructures mentioned by the El-Rufai included rail and power projects. According to him, the committee had identified three areas (rail, road and power) where the pension funds would be invested, He added that the borrowing would be done through bonds with private companies investing in road and rail infrastructure and paying within a period of 20 years.
While lamenting on the moribund state of infrastructures in the country, El-Rufai stated that in the last three years, the Federal Government had invested N1.7 trillion in the power sector, without any meaningful effect. According to him, the committee has thrown open consultations on how to fix the endemic crises plaguing the power sector, by inviting memoranda from the general public.
What it means: The latest move by the government shows revenue crisis in Nigeria continues to linger. In spite of Nigeria’s burgeoning debt profile, which currently stands at over N26.2 trillion, the figure is expected to hit a new height in 2020.
[READ ALSO: Debt profile: Bankruptcy looms, Obasanjo warns FG)
Speaking recently at the World Economic Forum (WEF) in Switzerland, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed reaffirmed that Nigeria does not have a debt problem but the challenge of under-performing revenues, which makes debt service obligation a struggle for the country.
Ahmed has consistently insisted that the nation faces no debt problem.
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This a recipe for a major disaster waiting to happen. Never have we experienced this tremendous amount of borrowing from an administration
Why using pension money for another project when you have refused to pay those who have suffered the nation for 35merterious years thereby keeping them & their children in hunger and untold hardship the federal Govt need a change of heart E
A scheme to loot and scam Nigerian pensioners!
Borrow and borrow government. This is a dangerous precedent. Nigerian pensioners are at risk of losing their pension payment because this government is running on a deficit. Meaning, they are not generating enough revenues to meet their expenses. They won’t be able to replenish the money they borrowed from the Pension Fund.
These people are borrowing money to be shared among themselves like they shared the $321 million they received from Abacha’s loots and several billion dollars they received through assets and looted funds recovery.
It is time Nigerian media, legislators, senators, press, social media and public hold this government accountable and demand that they give account details of all the revenues and looted money received since taking office.
The only thing this government knows how to is how to borrow money. They don’t know how to create revenue generating opportunities. They don’t know how to create jobs for Nigerians and they don’t know how to create alternative sources of revenues for the government.
Nigerians are being scammed and it is time to put a stop to it.
This is unfair ooo because pensioners are really suffering even we the son
I pity for Nigeria workers.
If this clueless government is allowed to borrow 20% of pensioners money, without stating clearly how to or when to repay back, then I foresee more crises for pensioners in the future.
Remember, these monies borrowed by these lazy, unreasonable thinking politicians will never affect their own pension when the time for it comes.
They remain in the elite and get their entitlements before the hardworking career civil servants that put more effort into building a vibrant system for the country. Remember how much the politicians earn and how poorly these civil servants earn. Making them to actually retire with no savings at all.
Will Nigeria youths ever wake up against these evil happening in the land or are they expecting God to come down and do it for them?
Will they ever stop for once thinking across ethnic and religious lines and think about the future of this country and the need to relegate these brainless men from politics?
If they want to borrow hundred trillions let them do, since I was young and now I am old I have been hearing government to borrow, every year I have not hard government paid, and no one has come and collect Nigeria for refuses to pay depths, so this depth of a thing is not real to me it may be politician way of making the people not to expect much, from government,
And where are the NLC in all of this.they will not voice out at all.as if pensioneers are not once workers.
And where are the NLC on this.they will never voice out against this at all.as if the pensioneers were not once workers.
I think it may be a bad idea to borrow from the pension fund. This is what workers would fall back on. There is a major crisis looming.
Past funds have not been fully accounted for, the recovered loots and so on.
This is a scary move that all should be concerned about.
If after retirement , to get you cash and someone comes to tell you stories.
What is the repayment plan, it should be transparent and visible for followup and accountability.
All we see from this finance minister woman is just to borrow and borrow, dragging our presidents administration constantly into public worries and talks.
We all know we cannt solve the problems all at once hence a need for gradual process, taking each sections at a time and seeing the wins before going into another.
The amount of money is Too much and again, from the pensions that should have been independent of the government.
God help us.
If 1.7 trillion spent in three years has not yield any meaningful result, what is the basis for assuming that taking 2 trillion at once from pension funds will do the magic????
What is the repayment plan over the twenty years? At what rate of interest?? Or is supposed to be free because its the government???
FG concludes plan to borrow N2 trillion from Pension Fund but what’s the economic importance to the Pensioners.
Hmm ?