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Home Abuja Metro

Abuja residents reject proposed fund deployment to infrastructure

22nd March 2016
in Abuja Metro
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Abuja residents reject proposed fund deployment  to infrastructure
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By ISAAC ANUMIHE, Abuja

Ever since the Federal Government mooted the idea of investing part of the pension funds in infrastructural development, Nigerians have become skeptical about the safety of their money in the hands of government.

Those who had bitter experience with the failed National Providence Fund (NPF) have expressed strong feelings over the idea, describing it as another government abracadabra to rip them off.

Speaking in Abuja recently at the Nigerian Pension Industry Strategy Implementation Roadmap retreat organized by National Pension Commission (PenCom), the Minister of Power, Works and Housing,  Mr Babatunde Fashola, (SAN) had  indicated that N5.2 trillion  pension funds may be deployed into infrastructure development, even though he cautioned that the fund  must be properly deployed to avoid project failure.

He said: “I see a future for Africa led by Nigeria, using the resources of the people to build a future that include the people”, adding:  “In contrast to the mismanagement that used to be the story of our own pension funds, the most prolific of the pension funds in Africa, which is the South African Public Investment Corporation (PIC) has over $150 billion assets under management. In Nigeria alone, they have $289 million in Dangote Cement; $98million has been approved but yet to be drawn for Notore Fertilizer; $230 million in MTN Nigeria;  $270 million in Erin Energy (formerly CAMAC) and $150 million in Mainstream Energy Solutions (in the power sector of Nigeria). By contrast, the question to ask is what is the ‘home based’ pension fund doing?  The “visiting” pension fund from South Africa has a total of $897million in our economy.

“The answer is obvious. That is why we are here, that is why my host in their invitation spoke of ‘suitable investible vehicles with low risk profiles and sufficient comfort’ as the reason that ‘continues to hamper the drive to make visible economic impact’ in the letter to me’’, he said.

The minister however, said such investment should be channeled towards the building of roads, hospitals, educational facilities, railways, inland waterways with the aim of generating employment for the people, creating wealth for the country and improving the standard of living for all and sundry.

On education, he had said: ‘’Our ‘Adopt a School Initiative’ where we opened a structured platform for private individuals and corporations to enter into schools, which were hitherto the investment preserve of government and religious missions (Christians and Muslims), is another area of our successful use of private capital coupled with government funding like the World Bank- supported Eko Project. The ‘Adopt a School Initiative’ was so flexible that it allowed individuals and corporations to intervene according to their resources in a classroom or an entire school. Nothing was too small. You could give cash or material or you could rebuild, refurbish or donate a school facility, once we reached an agreement with you.”.

The minister had noted that pension funds could better be used for the construction of federal highways across the country and  to build federal hospitals, railways, ports and other important infrastructure.

He, however, warned that the nation’s current obsolete laws must be amended to ensure that the funds put in these  infrastructure are not held up by litigations and suspension of contracts executions.

Earlier, the Director-General, National Pension Commission, Mrs. Chinelo Anohu—Amazu  had explained why the pension scheme became necessary saying that during the privatization of some enterprises under the former Director general of Bureau of Public Enterprises(BPE), Mallam Nasir El-Rufai, workers’ pension posed a serious issue to the extent that most of the enterprises had serious pension deficit.

But in spite of government’s assurance that people’s funds would be properly accounted for when it is invested, Nigerians, having passed through a discredited NPF would not want a repeat of such experience. Most of the workers in the Federal Capital Territory (FCT) that spoke to Abuja Metro were uncomfortable with the government’s intention.

Benjamin Okaro, a civil servant said: Government has come again in a different way to take our money. The ones the politicians have stolen are not enough for them. They want to go for the common man’s money again? Nigeria Labour Congress (NLC)should not allow them.”

Blessing Erimma, a secretary, spoke in the same vein: “The government has emptied the treasury and there is no other place to get money except the people’s money. This is the money they forced us to save. Most workers were reluctant to save this money but they forced us because of their evil intentions. May God judge them.”

A retiree, Madam Alice also voiced her frustrations and fear. Her words: “Since I retired in 2014, I have been pursuing my money and they have been tossing me up and down. They told me to meet my Pension Fund Administrator (PFA)and after I had filled all the necessary forms and submitted, they started demanding one document or the other.”

A foremost economy analyst, Tope Fasue, was apparently not also impressed by the government’s reasoning. He said: “My opinion is that they (government) should not overstretch the pension fund because there is too much focus on it and I think there is this natural tendency, when politicians look left and right for where the money is, they take. Already, a lot of the money that they raised, especially at the state level, has been mismanaged. “I think fundamentally, something is wrong. We are always looking for so-called infrastructure. Infrastructure deficit is over hyped. We might  have maintenance deficit.”

I may actually write a budget based on maintenance for the next 10 years in this country to maintain the level of infrastructure that we have and focus on value for money instead of this idea of looking for money everywhere. So, I am not in support of the idea of encumbering the pension fund for so-called infrastructure. As it is now we do not get more than 30 per cent value for money. So, I do not want them to use the pension fund. The Pension Act is clear as to where pension fund can be invested and all the pension funds we have are already either in property or bond market. A lot of that went into bond market as well. In fact, as I speak, more than 50 per cent of the fund has been invested. It is an over kill.”

But Odilim Enwebara, a development economist, has a contrary view. He said: “It is a welcome development because there is no way such a huge fund should be left idle while government is starved of funds to invest in growing the economy.”

Corroborating Enwebara’s view, former deputy governor of Central Bank of Nigeria (CBN), Mr Obadiah Mailafia, said: “The margin should be 50. We cannot afford to make any loss of people’s fund. It could be invested in FGN bond. It will be invested in something that, in 50 years, will continue to yield returns.

Normally, pension contribution is a huge of long capital. There is hardly a secondary market. PenCom and Stock Exchange should work out modalities for investment; maybe use PPP to build a fast rail from Lagos to Abuja. It will pay its way back. It can only fail when people go into corruption.”

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