The Minister of Finance and Coordinating Minister of Economy, Wale Edun, has responded to recent speculations regarding the utilisation of pension funds for infrastructure projects, clarifying the government’s stance and objectives.
Edun, in a video message posted on the ministry’s social media handle, stated that the Federal Government has no intention of improperly accessing workers’ pension savings.
“It has come to my notice that there are stories making the round that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth. The pension industry, like most of the financial industry, is highly regulated. There are rules, there are limitations about what pension money can be invested in and what it cannot be invested in.
“The Federal Government has no intention whatsoever to go beyond those limits and go outside those bounds which are there to safeguard the pensions of workers. Now what was announced to the Federal Executive Council, merely for noting, merely for information, no approval was sought for any action whatsoever, was that there was an ongoing initiative drawing in all the major stakeholders in the long-term savings industry, those that handle funds that are available over a long period.
“To see how within the rules, within the regulations and the laws, these funds could be used maximally, most effectively, to drive investment in key growth areas, infrastructure, housing, and of course, to find a way to provide Nigerians with affordable mortgages,” he stated.
Stressing the strict regulatory framework governing the pension industry, he assured that the government is committed to compliance to safeguard workers’ pensions.
Edun stated that the government has not attempted to increase the risk of the pension funds or to allow their investments to be less safe.
“Within this context, there’s no attempt or consideration to provide less safe investments for pension funds, or even insurance funds, or any investment funds that are made available.
“No attempt whatsoever to increase the risk, no attempt whatsoever to lower the returns that would otherwise be earned, and we must remember that the federal government possesses the ability to provide guarantees where such are needed to unlock funding that would lead to growth, creation of jobs, and alleviation of poverty.
“It is an ongoing conversation, a challenge, a test, for the best and the brightest in the financial industry to come up with solutions that, whilst safeguarding the long-term savings, do provide an avenue that can help to boost growth in the economy,” Edun said.
Following the announcement by the Federal Executive Council regarding plans to utilise pension funds for infrastructure projects, FG faced substantial criticism.
On Tuesday, Edun emphasised that the initiative to deploy the pension funds was aimed at stabilising the economy amidst elevated inflation and interest rates.
He said, “Generally, there is an offer of N20tn available, or much of it is in short-term funding that doesn’t need to be quite sure money is long term. People save over their lifetime for their pension.
“And so in conversation, in consultation, collaboration and cooperation with the private sector, we are now able to announce and with the full knowledge and support of all parties, that there will be an initiative to fund growth through investment in infrastructure, including housing provision of mortgages, long term mortgages, 25-year mortgages at relatively low interest rates.”
Many voiced apprehensions that the associated risks could potentially pose severe repercussions for workers’ financial security in retirement.
The 2023 presidential candidate of the Peoples Democratic Party, Atiku Abubakar, expressed concern that the Federal Government’s decision to utilise pension funds for infrastructure development could have disastrous consequences for Nigerians.