President Goodluck Jonathan, on Monday assured that the protection of pension assets and the payment of retirement benefits as at when due would always be the paramount objective of the Federal Government.
He said this in Abuja at the opening session of the World Pension Summit for Africa, where he noted that from a deficit of about N2tn ($12.9bn) in 2004, the National Pension Commission had been able to accumulate total pension assets of over N4.21tn ($27.2bn) by March 2014.
“In 2004, the Pension Reform Act was enacted by the Olusegun Obasanjo’s administration to address the recurring challenges experienced in the administration of pension and enhance efficiency in the system.
“This reform initiative established a contributory pension scheme for the public and private sectors. In 10 years, a sustained policy innovation and meticulous management has facilitated confidence and credibility in our pension system and administration.
“It also strengthened our pension institutions as we transit from a deficit of about N2tn ($12.9bn) in 2004 to accumulate pension assets of over N4.21tn, which is about $27.2bn, by March 2014.
“You can see that within 10 years, if we could move from a deficit of about N2tn to a positive of N4.21tn, which is about $27.2bn; that means that we agree with the Coordinating Minister of the Economy that in another two decades, we should get up to $100bn,” he said.
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, who also spoke at the event, said since sustainable economic development in any country required huge long-term investment in infrastructure, agriculture, housing, education, technology and health care; there was a need to take advantage of pension assets.
She said with a global asset value of over $70tn by 2013, institutional investors like pension funds now had the muscle to invest in real assets and to drive growth.
“In Nigeria, we have grown from about $4bn in 2007 to $25bn now, and about 9.7 per cent of our old GDP and five per cent of our new GDP. We are positioned to do more and with the emerging drive, we will be able to contribute significantly.
“We expect that two decades from now, Nigerians should be able to move its pension fund assets exceeding $100bn,” she said.
Okonjo-Iweala, who lamented that the contribution of the sector in Africa was too low compared to other regions, noted that there was a need to capture significant proportion of the workforce, especially those in the informal sector.
“We need to encourage countries to the contributory pension scheme. We have yet to harness the potential of pension as an instrument for development, especially in infrastructure where the finance gaps are huge.
“The trend in government budget means that we have to look into pension funds for this kind of investible tools,” the minister stated.