FG, States To Borrow N2trn From Pension Fund

 National Pension Commission

From the over N9 trillion in the custody of the National Pension Commission (PenCom), the federal and state governments plan to borrow N2 trillion from the money to develop infrastructure across the country.

The decision was unveiled in Abuja, yesterday, by Kebbi State governor, Alhaji Atiku Bagudu, at the end of the last meeting for 2019 of the National Economic Council (NEC).

The council, which is presided over by Vice President Yemi Osinbajo, comprises of top officials of the federal and 36 states of the federation.

Bagudu told State House correspondents that countries such as South Africa, Saudi Arabia, and others had been using their pension funds and sovereign wealth authorities’ investment processes to create platforms for development.

He said that “you will recall that at the 99th NEC meeting, the council set up a sub-committee to see how pension funds can be used for infrastructure development as provided for by the Pensions Reform Act. Up to 20 per cent of the pensions funds under the current law can be used for infrastructure.

“At the last NEC meeting, there was a review of the performance of the Nigerian Sovereign Investment Authority (NSIA) and we were all impressed about the experience they had gained in the last few years and their performance.

READ  Buhari Approves The Appointment Of Captain Rabiu Hamisu Yadudu As FAAN MD

“And it was decided that a committee be set up to how we can leverage on that performance to create a platform where pension funds can be used for infrastructure development in a safe manner, so that they will earn long-term returns for the pension funds while also helping to build Nigeria’s infrastructure.

“So, today, the sub-committee presented an interim report where they advised on some of the issues that came up during the deliberation. Of particular note was that other countries have been using the same mechanism – South Africa, Saudi Arabia and others  – have been using their pension funds and sovereign wealth authorities’ investment processes to create platforms for development.

“So, the committee has identified potential road infrastructure, infrastructure in the power, the rail sector that can be funded through this mechanism.

“They noted that this year’s budget for example has N169 billion for roads across the federation and is grossly inadequate but with this mechanism maybe up to N2 trillion can be accessed and leverage upon,” he said.

The Kebbi governor said that NEC commended the committee for the interim report and the sub-committee promised that early next year there will be a final report for the council to consider.

READ  Osinbajo, Soyinka urge action against fake news

He also disclosed that the council received the interim report of the sub-committee to consider the ownership structure of electricity distribution companies as far as state ownership is concerned.

Bagudu recalled that at the 99th NEC meeting, the council observed that since under the privatisation of electricity distribution companies the 40 per cent meant for the state and federal governments had not been so distributed, a committee should be set up to review the status/ownership of those shares that had not been distributed and report back to NEC.

He added that the committee was chaired by the governor of Kaduna State, Nasir el-Rufai with six other governors, ministers, and some agencies.

“They presented an interim report that they are meeting soon to review the various information provided by the affected agencies, then they will brief the council further.

“There was a presentation by the Niger Delta Power Holding Company, titled: ‘Evaluation options going forward’. You may recall that 10 years ago, the Niger Delta Power Holding Company was created and it’s owned by federal, state and local governments. They have 10 completed generating plants and two others that are in the process of being completed with about 4,500 megawatts.

READ  Invite Chadian Army To Join The Fight Against Boko Haram’ — Zulum Begs President Buhari

“The board of the Niger Delta Power Holding Company and shareholders, who are state governors and local government chairmen, reviewed the options going forward because in the design of this company, the assets were supposed to be privatised.

“Today, the options were discussed and members of the NEC were advised to study the presentation so that at more opportune time, NEC can review it and take necessary steps,“ he stated .

During her briefing, the minister of Finance, Budget and National Planning, Zainab Ahmed, gave an update on the repayment process for the budget support facilities that was granted to the states by the federal government.

According to her, deductions were ongoing and remittances on the facilities were being made to the Central Bank of Nigeria (CBN).

She said: “Today, the Ministry of Finance, Budget and National Planning reported to NEC on the balances of some key accounts. For the Excess Crude Account (ECA), as at 19th November, 2019, we have a balance of $324.967 million. In the Stabilisation Account, as at 17th December, 2019, we have a balance of N30.479 billion. In the Natural Resource Fund, still at the same date, 17th December, 2019, we have a balance of N88.283billion.”

Recommended For You

Leave a Reply