A Former Vice President of Nigeria, Atiku Abubakar, has criticized the federal government’s proposal to use N20 trillion from pension funds for infrastructure projects, labeling the plan as illegal.
In a statement on Wednesday, the ex vice president said on his X account the that the law only required that 5% of the fund to be used for infrastructural projects.
Abubakar expressed concerns over the proposal by Wale Edun, the Minister of Finance, to “unlock” pension funds for national projects.
He argued that such a move could have severe repercussions for the country’s workforce.
According the him, diverting these funds, which consist of the savings of diligent workers relying on their pensions in retirement, could disastrously affect the lives of countless Nigerians who have retired after years of 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.
“This 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.
“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.
“It is another attempt to perpetrate illegality by the Federal Government. 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 5% of total pension funds’ assets in infrastructure investments,” Atiku said.
FG to introduce reforms to attract investment for Infrastructure
Meanwhile, the PDP former presidential candidate called on the federal government to seek alternative reforms to address the infrastructural deficits in the country.
He said Edun must restore the confidence investors to drive key investments, rather than relying on the pension of hard-earned working Nigerians.
“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 thst is more than 5% of the total value of the nation’s pension fund for Mr. Edun to fiddle with.
“There are no easy ways for Mr. Edun to address the challenges of funding infrastructure development in Nigeria. He can’t cut corners.
“He must introduce the necessary reforms to restore investor confidence in the Nigerian economy and to leverage private resources, skills, and technology,” Atiku added.
Backstory
Earlier on Tuesday, The federal government unveiled plan to harness the N20 trillion pension fund and other locally available resources for infrastructure development in Nigeria.
- Wale Edun, coordinating minister for the economy and minister of finance, disclosed this at the end of the federal executive council (FEC) meeting chaired by President Bola Tinubu.
- Edun said the government is focused on tapping into domestic financial resources, particularly pension and life insurance funds, to leverage local funds for national growth.
- He added that it was a significant step towards driving economic progress and addressing critical infrastructure needs.
- According to Edun, with over N20 trillion available funds within the country, there is a clear opportunity to channel these resources into vital sectors such as housing and long-term mortgage provision.