On Thursday, the Federal Government refuted claims that it planned to borrow the N20 trillion pension fund for infrastructure projects. In a statement from Abuja, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, clarified that the government would adhere to the regulations governing the management of the pension fund.
Edun addressed journalists following a two-day Federal Executive Council meeting at the Presidential Villa on Tuesday, mentioning that the government intended to unveil a plan to utilize domestic funds, including the pension fund, for infrastructure development. However, he emphasized in his Thursday statement that the pension industry, like other financial sectors, is governed by strict legal frameworks.
“The pension industry, like most financial sectors, is heavily regulated with strict rules governing what pension funds can and cannot be invested in,” Edun stated. “The Federal Government has no intention of exceeding these limitations or violating these safeguards designed to protect workers’ pensions.”
Edun explained that an ongoing initiative involves major stakeholders in the long-term savings industry. This initiative aims to explore ways to maximize the use of these funds for investment in key growth areas, all within the existing regulations and laws.
He further emphasized that the government does not plan to increase the risk associated with pension funds or compromise their security.
Earlier on Thursday, the Nigeria Labour Congress (NLC) and the Trade Union Congress of Nigeria (TUC) urged the Federal Government to avoid using the pension fund for infrastructure projects. In a joint statement, NLC President Joe Ajaero and TUC Deputy President Tommy Okon warned against risking workers’ future by borrowing from these funds, stressing the importance of retirement security and criticizing the lack of transparency in past government borrowing practices. They stated, “Nigerian workers have entrusted their hard-earned savings for retirement security, not as a means for government projects. It is imperative to halt any further plans to tap into these funds, especially given the lack of transparency and accountability in past government borrowing practices.”
The unions demanded assurances from the government that workers’ retirement funds “would not be subjected to further borrowing by the Federal Government, especially since the PENCOM Board has not been constituted as required by law.” They argued that any plan to borrow these funds lacks backing from the Pension Act.
Labour expressed regret that, despite government assurances of extensive consultation with major stakeholders in the pension industry, the NLC and TUC—representing the pension fund contributors—had neither been consulted nor informed of the government’s intentions.
The unions stated that the lack of transparency undermined the integrity of pension funds, which should be treated with the utmost respect and protection.
Similarly, the Head of Information for the Nigerian Union of Pensioners, Bunmi Ogunkolade, urged the government to find alternative funding sources for its infrastructure projects, noting that the pension fund belongs to workers, not pensioners.
He said, “Simply put, we do not support this. We have advised the government to seek alternative funding sources for their infrastructure projects.”
The Nigeria Union of Pensioners in Kaduna State also advised against using the pension funds for infrastructure. The state secretary, Mallam Alhassan Balarabe Musa, mentioned in an interview with The PUNCH that a similar attempt was made by the Federal Government under former President Muhammadu Buhari, but it failed.
“We are not pleased with this development. Our national headquarters are doing everything possible to ensure the fund remains inaccessible,” stated a representative. “Currently, many retirees under the contributory pension scheme cannot receive their gratuities. So, why would the Federal Government consider taking such a large amount? This move would be both unfortunate and unacceptable.”
Similarly, the NUP Pensioners, Ogun State Council, issued a warning. The union’s Secretary, Dr. Bola Lawal, said, “I’m confident that if you ask any pensioner, none would support this government initiative. What guarantee is there that the money will be repaid promptly?”
Osun State pensioners echoed this sentiment. The Coordinator of Osun State Contributory Pensioners, Mr. Toyin Ayinde, cautioned the government against using retirees’ contributions. “The government must not touch our money. What is their problem? We don’t want anyone to touch our funds under any guise. We are not interested in any proposals from them,” he stated.
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