•Says govs don’t believe in savings
Stories by Adetutu Folasade-Koyi
Former President, Olusegun Obasanjo said, yesterday, that the pension contribution scheme in Nigeria, which his administration midwifed in 2006 now has assets worth N6 trillion with seven million employees.
Obasanjo also disclosed at the World Pension Summit in Abuja, yesterday, how, when he was president, he urged governors to save for the rainy day but was rebuffed.
He also urged pension fund operators to deploy the huge funds at their disposal to infrastructure development rather than allow them lie idle.
The former president also asked them to woo self-employed Nigerians which he said would help the country currently in recession.
“One of the things that makes me very happy about the pension scheme is that in the last five years, when almost anything goes about public fund, now, pension fund remains sacrosanct. I believe that is something we must preserve.
“I am, particularly, happy that what we put in place about 10 years ago has now become so successful that we have well over seven million employees, captured from both the public and private sector. And, we have almost N6 trillion in pension assets.
“I understand that salary earners that are captured are 11 million people; who are estimated to be on salary and are part of the innovation. The issue I will be discussing in the next two days is, how do we capture more of the salary earners within the pension scheme?
“How do we capture the self-unemployed? We will continue to have more of them now, especially with the recession. There will be more people that will go into self-employment. We must be able to capture them. They must be able to save for the rainy day. I remember when I was in government and I spoke to the state governors to save for the rainy days, they said no, no, no the rains have come. But, there was no rain that time! Now that the rain has surely come, there’s nothing that can cushion us! We have a very strong regulation for the pension fund, don’t dilute the fund. We must also find a way to use the funds for development of our infrastructure.
The former president opened up on how Nigeria’s pension process was reformed.
“Not to do anything about it will be really heartless. Then, one day, on my table, I got a letter from one of the university professors that I used to know even when I was in school, Professor Oyenuga. He wrote me and said for three months, he had not got his pension. Then, of course, our man who was then in charge of privatisation, wrote me a memo giving me the status of a man in public parastatals and that man was Nasir El-Rufai, now governor of Kaduna State.
Now, I had to think hard, what do we do?
“Then, we formed a committee and Fola Adeola led the committee and we ordered them to go round the world to give us a solution and that was why I said, if the World Pension Summit had been in existence, maybe, we would have just gone to them and they would have given us a blueprint. But, our committee went round the world and came up with what we have now put in place…”
“Finally, on innovation, it should be with precaution, and when people have to work all the days of their lives when they are strong and they made contributions for their future. Now, we cannot be too adventurous with the so-called innovation because when they need the money, the money must be there.
“I am, particularly, delighted at the collaboration between the National Pensions Commission and the World Pension Summit in Netherlands, which began in 2014 and has resulted in the convergence of great minds to discuss and explore ways of making the pension and social security system in Africa more efficient and more effective.
“Many countries in Africa , like other regions of the world, are making efforts to reform their pension system so as to entrench accountability and sustainability.
It is apparent that competing demands for resources to address important issues such as education, housing, environmental degradation, and appalling security situation, to mention but a few, have put a lot of strain on government finances across Africa, with the obvious fallout being inadequate budgetary provision and, in some cases, untimely release of budgetary allocation to pay pensioners and related employee entitlements.
“The pension landscape in Africa has, indeed, been further undermined by weak , inefficient, less transparent and cumbersome structures on which defined benefit schemes have historically been administered. Poor coverage and none inclusion of the private sector, particularly the self employed and the informal segment which is increasingly becoming an important pillar of Africa economy, are also issues which African countries are grappling with.
“Without a doubt, establishment of a viable pension structure for the informal sector is essential, giving that it constitutes 61 percent of the share of urban employment in the continent and is expected to rise due to population growth fuelled by a projected decline in infant mortality.
“There is also rise of urban population growth that is projected to reach 60 percent by 2015. These are sufficient incentives to push African governments and relevant agencies to make the drive for a universal coverage of pension and social security benefits, particularly the self employed, and then informal sector employees a major priorities and their greatest social policy concerns…”
Additionally, the sub Saharan African countries need to show more commitment in this regard and giving that a proportion of their citizens in remunerable employment have attained an alarming 85 percent and 70 percent of women and men respectively.
As the consequence, therefore, pension and social security programs must be reformed with a view to addressing these challenges and emerging trends towards a new balance in the roles and objectives…”