Business Top Stories

Why N6bn pension funds can’t be spent on infrastructure – PenCom

Why N6bn pension funds can’t be spent on infrastructure – PenCom

The National Pension Commission (PenCom) has said the ongoing clamour for deployment of the N6 billion consolidated contributory savings for pensioners on other aspects of the economy was not in consonant with the Act establishing the Commission.

Many analysts have been canvassing borrowing the funds, which they describe as “ idle funds” for purpose of lifting the 2016, suffering performance due to its $2.2 billion deficit, from the ground.

But the organised labour, speaking through the Nigerian Labour Congress (NLC), said it will resist any move aimed at using the money for any other purpose other than what it is meant for.

Some financial analysts said inflation, which has been on rising trend in Nigeria, especially since the recession, will reduce the actual values of the money as it lies with the CBN.

According to Mrs. Grace Adebayo, executive director, AII Insurance Brokers, there is nothing wrong in borrowing funds from any source, locally and internationally, so long as some elements of discipline is allowed to guide the undertaking.

“The question is, can it be guaranteed that government will make the fund available whenever it is needed for the purpose it is meant?

“Most foreign loans we talk about today were funds that the institutions managing them were not in a hurry to utilise, and leaving them lying idle in bank vaults will not add any value to such money, so the best is to turn them into loans facilities, with terms of borrowing strictly put out for willing countries or companies,” she said.

Read also:  Experts preach against govt’s plan to spend $2bn on refineries’ maintenance

Speaking further on this, PenCom’s Head of Investment Supervision Department, Mr. Ehimeme Ohioma, said without needed guarantee for the safety of the products that the funds were being tagged on, financing them from pension assets may not be to the best interest of the system.

He said though pension assets were a potential source of private financing to help fund infrastructure in the country, the funds could only be invested indirectly in infrastructure through structured instruments, such as bonds and funds for now.

But sources said officials of the Ministry of Finance and those of Budget and Planning are yet to arrive at any conclusion on the availability of the PenCom funds for the purpose of implementing the budget.

 

By Emma Eke….

RipplesNigeria …without borders, without fears

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

Join the conversation

Opinions

About the author

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

Do NOT follow this link or you will be banned from the site!