Former Vice President of Nigeria, Atiku Abubakar, has strongly criticised the federal government’s proposal to utilise N20 trillion from pension funds for infrastructure projects, labelling the plan as illegal.
In a statement on Wednesday via his X account, Abubakar pointed out that the law only permits the use of 5% of pension funds for infrastructural projects.
This critique comes in response to Wale Edun, the coordinating minister for the economy and minister of finance, who recently announced the government’s intention to harness the N20 trillion pension fund and other local resources for infrastructure development in Nigeria.
Edun highlighted the potential of these funds to support vital sectors such as housing and long-term mortgage provision.
Abubakar expressed deep concerns over this proposal, arguing that diverting pension funds could have severe repercussions for the country’s workforce.
He emphasised that these funds represent the savings of diligent workers who rely on their pensions for retirement and that reallocating these resources could disastrously impact the lives of countless Nigerians who have retired after years of service.
“My attention is drawn to a disturbing disclosure by the Finance Minister and Coordinating Minister of the Economy, Wale Edun, as he addressed State House correspondents after the Federal Executive Council (FEC) meeting at the Presidential Villa on Tuesday, 14 May.
“This is, according to the Minister, a move by the Federal Government to rev up economic growth by unlocking N20 trillion from the nation’s pension funds and other funds to finance critical infrastructure projects across the country.
“It is a misguided initiative that could lead to disastrous consequences on the lives of Nigeria’s hardworking men and women who toiled and saved and who now survive on their pensions having retired from service.
“It is another attempt to perpetrate illegality by the Federal Government. The government must be cautioned to act strictly within the provisions of the Pension Reform Act of 2014 (PRA 2014), along with the revised Regulation on Investment of Pension Assets issued by the National Pension Commission (PenCom).
“In particular, the Federal Government must not act contrary to the provisions of the extant Regulation on investment limits to wit: Pension Funds can invest no more than 5% of total pension funds’ assets in infrastructure investments,”
“I note that as of December 2023, total pension funds assets were approximately N18 Trillion, of which 75% of these are investments in FGN Securities.
“There is NO free Pension Funds thst is more than 5% of the total value of the nation’s pension fund for Mr. Edun to fiddle with.
“There are no easy ways for Mr. Edun to address the challenges of funding infrastructure development in Nigeria. He can’t cut corners.
“He must introduce the necessary reforms to restore investor confidence in the Nigerian economy and to leverage private resources, skills, and technology,” Atiku added.
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