The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said the time has come for Nigeria to look into how it can harness the money in its contributory pension funds given the falling oil prices and dwindling revenue.
He said it was regrettable that given the growing size of the funds from the contribution, much of the money had largely been invested in government purse when there are places where it could be more impactful.
In his speech at the Nigerian Pension Industry Strategy Implementation Roadmap Retreat, held between January 21 and 23, a copy of which was made available to Saturday PUNCH by his Special Adviser on Communications, Hakeem Bello, on Friday, Fashola said given the visible infrastructure deficit, it had become necessary to use the pension funds for profitable projects.
He said, “Today’s reality is that we are in another cycle of burst. Oil prices have crashed from over $100 per barrel and are now hovering around $30 per barrel and there is a real chance that it will go lower. Put very simply, our main source of revenue has taken a big blow. This household has lost its bread winner.
“However, it is not without options. It has assets, it can raise money, it has savings such as the private money belonging to pensioners, but it cannot be used like oil money.”
The minister said the country had not actualised the diversification it had always advocated because of the boom and the surplus revenue from oil, but that instead, the country had gone into a spending spree. He said it was difficult to get private capital into critical sectors of the economy like infrastructure with such attitude.
He said it was equally noteworthy that the pension funds contain contributions of the working class that do not, as yet, penetrate enough into giving value to the lives of the contributors.
He said, “Private capital and fund managers were not going to invest funds entrusted to them in infrastructure if we wanted to use them for free because politicians do promise free health, education, and so on. After three decades of prevaricating about diversification, diversification has walked into the front door of the Nigerian household.
“The pension funds, which are under the management of pension funds administrators will not go into roads, rail, housing, hospitals or universities unless we change our attitude. These are places where pension funds can be impactful.”
