The effort of the federal government at containing massive corruption embedded in the pension fund scheme in the past may have achieved results but not enough to allow the N5.2trillion lie fallow, Mr. Babatunde Fashola minister of power, works and housing, has said. At the Nigerian Pension Industry Strategy Implementation Road Map Retreat organised by the National Pension Commission (PenCom), Fashola advocated proper use of pension fund to build the required infrastructures for a rapid development for the country.
The minister said he could see a future for Africa, where Nigeria is leading in the use of resources to build a future that includes the people. In a key note speech at the event held in Abuja, Fashola said, “I see a future for Africa led by Nigeria, using the resources of the People to build a future that includes the people”
He said in Nigeria alone, “they have $289 million in Dangote Cement , $98million approved but yet to be drawn for Notore Fertilizer, $230million in MTN Nigeria, $270million in Erin Energy (formerly CAMAC) and $150million 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? If as I have shown, 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.” The minister however, said such investment should be channeled towards building of roads, hospitals, educational facilities, railways, inland water ways 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 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.
Speaking on the topic, “Overcoming the challenge and managing the risks and constraints that inhibit the investment of private capital and Funds in Nigeria’s Infrastructure Landscape in order to make a visible Economic Impact,” the minister stated that “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) had over $150 billion assets under management.”
Fashola said that he believed the pension funds could better be used for the construction of federal highways, federal hospitals, railways, ports, and other important infrastructures across the country, even as he 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.
The minister, who said it was time to invest in the real sector, added that the biggest opportunity presented itself for the nation to act towards diversification rather than sloganeering it. Fashola, who lamented infrastructure deficit in Africa, said: “This is the time to show that our nation and our national economy is bigger than the challenges posed by dwindling oil prices. This is the time to diversify and change the face of our economy. But the risks that stand in the way of investing the fund are caused by us and they must be changed by us.
“Perhaps, the appropriate starting point will be to acknowledge that pension reforms are just beginning to gain a foothold across most of Africa in jurisdictions as Nigeria, Ghana, Botswana, Kenya and Uganda, to mention a few.
“Perhaps the biggest and most advanced of the pension funds, especially in sub-Saharan Africa is the South African Pension Fund. But while the sizes of these funds are happily growing, and the number of contributors increasing, the impact in the quality of life on the continent is not yet anywhere near minimum globally acceptable standards.”
The minister advocated the adoption of a collective national attitude to make it possible to invest the over N5 trillion fund constituting the contributions of the nation’s working class into real sectors as a means of diversifying the nation’s economy and achieving inclusive growth.
He noted that the attitude that once mired pension funds management in scandals and lack of transparency, had led to stringent legislative interventions that limited the scope of activities that pension funds could participate.
Fashola acknowledged the amendments being made to address the situation noting that the Nigerian Pension law has been invigorated with the amendments of 2014, leading to accumulation of huge funds through the contributions of employees and employers, Fashola said the funds could be invested in a litany of profitable ventures to the benefit of pensioners, other citizenry and the country.
He said: ‘’Those investible vehicles exist. They are in roads that can be tolled, like housing, the 4th Mainland Bridge, the Coastal Road linking several coastal states from Lagos to Bayelsa; the new seaport in Lekki and Badagry, the refinery by Dangote, Ajaokuta Steel, a petrochemical plant in the Niger Delta; the broken textile mills in the North and South of Nigeria that require new equipments and disciplined fiscal, technical and organizational management; prison in each of the six geopolitical zones of Nigeria that can help strengthen our justice system and decongest the colonial prisons we have kept as relics of our own sense of justice; they are in hostels for students in Nigerian universities, embedded power plants in the universities, most of which have teaching hospitals and provide an opportunity to power education and healthcare and the list is endless. ‘
’It is as long as we can imagine. The time for it is now. This is the biggest opportunity to act towards diversification rather than sloganize about it. This is the time to show that our Nation and our National economy is bigger than the challenges posed by the dwindling oil prices. This is the time to diversify and change the face of our economy once and for all.”
’The new pension fund has shown what can happen if people resolve to contribute and pay their way. Health insurance is another area that can open up access to top class health service for even the poor, if people are ready to contribute and save for their well being. Insurance will give them a choice and access to the best medical service when they need it. “It will give them a second highway away from public health service, which even with its best intentions cannot provide every service free.”
Earlier, PenCom’s Director-General, Mrs Chinelo Anohu-Amazu, said the commission continues to open its gates to as many workers who are ready to contribute to the scheme from the public and private sectors.
