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FG concludes plan to borrow N2 trillion from Pension Fund  

FG has concluded plan to borrow N2 trillion from the current N10 trillion pension funds to finance the development of infrastructure.

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NDDC, Cash transfer, President Buhari, non-oil Exports, oil revenue, export revenue, FG Waives import duties for medical supplies, Orders Customs to expedite clearing, Presidency faults report on Kyari as Buhari didn’t cancel memos, appointments approved by him

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.

El-Rufai: How Vodafone recorded its ‘biggest’ investment mistake in Nigeria, FG concludes plan to borrow N2 trillion from Pension Fund  

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.

“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.

Sigma Pensions

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.

FG uses VAIDS to raise N70 billion from Nigerians 

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.

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[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.

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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      Business

      FG to commence construction of 4 new rail projects across the country

      The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.

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      Rotimi Amaechi, Minister of Transport, Nigerian railway contract with CCECC and CRRC, China Civil Engineering Construction Corporation, Chinese Railway Rolling stock Corporation

      The Minister of Transportation, Rotimi Amaechi, has said that the Federal Government is about to commence 4 new rail line projects in various parts of the country.

      The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.

      This disclosure was made by Amaechi while speaking at the annual ministerial press briefing on programmes, projects and activities of the Federal Ministry of Transportation and its agencies on Friday in Abuja.

      READ: FG to fully launch E-ticketing platform for NRC next week

      What the Minister of Transportation is saying

      Although the Minister announced that the Federal Government was about to start the rail lines project, he was not specific on the exact dates the projects would start.

      Amaechi, in his statement, said, “We have awarded the following contracts and we are about to start and we have even tried to solve the financial problems. This is because we have the problem of having to hire consulting engineers.

      READ: $2 billion Kano-Maradi rail would be completed in 36 months – FG

      “The ones we are about to start include Ibadan to Kano, we are waiting for funds from China. We are about to start Port Harcourt to Maiduguri, we are waiting for the cabinet to approve consulting shares. We are also to start the Kano-Maradi and Lagos to Calabar.

      Sigma Pensions

      “But one thing that is unique about these contracts is that the president early enough directed that all rail lines must stagnate at the seaports.

      “That is why there may be a bit of adjustment in the pricing of Kano-Maradi because we have to adjust it to link up to Kano-Lagos so that it can terminate at Lagos seaport.’’

      The Minister pointed out that the 185.5km Lagos-Ibadan double standard gauge line with extension to Apapa seaport was nearing completion, while the 186km Abuja-Kaduna and 302km Warri-Itakpe standard gauge lines had been completed and were functional.

      READ: FG urges contractors to complete Ebute Meta–Apapa seaports railway extension by January 2021

      What this means

      • The various rail line projects are part of the ambitious plan by the Federal Government to create a nationwide rail network that is intended to help in the country’s diversification efforts, away from crude oil.
      • Some of these rail projects will also help to decongest the Apapa ports in Lagos and serve as a route for the import and export of goods in the West African sub-region.

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      Business

      Customs Tin-Can Island Command generates N112.7 billion in Q1 2021

      This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.

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      The Nigerian Customs Service revealed that its Tin-Can Island Command has a first-quarter revenue of N112.7 billion in 2021. This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.

      This was disclosed by Mr Mba Musa, Customs Area Controller, in a statement on Friday.

      “The comparative analysis of quarter one revenue collection from 2018 to 2021 are as follows: in 2018, N76,789,721,107.42; in 2019, N78,857,106,168.27; and in 2020, N91,635,998,490.73,” the customs boss said.

      READ: Customs revenue rises by N200 billion to hit N1.5 trillion in 2020

      “This improvement is despite the twin threat to lives and livelihood posed by the COVID-19 pandemic. The command has inspired their officers to continue to work hard while observing all the safety measures to achieve the best of performance.

      “We kept our lines of communication open and concerted effort was made to ensure that the supply chain is not disrupted,” he added.

      READ MORE: Customs officers must declare their assets annually – Customs boss

      What you should know: The Nigeria Customs Service (NCS) generated a revenue of N1.5 trillion for the year 2020, a rise compared to N1.3 trillion in 2019.

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